KARACHI: Pakistan’s government is mulling “very good options” which range from importing crude oil from the United States (US) to abolishing tariffs on American imports, an official privy to the matter said on Wednesday, as Islamabad attempts to offset a trade imbalance that has triggered higher tariffs from Washington.
US President Donald Trump has imposed a 10 percent baseline tariff on all imports to the US and higher duties on dozens of other countries. Pakistan faces a 29 percent tariff due to a trade surplus with the US of about $3.6 billion, although that is subject to the 90-day pause Trump announced last week.
The US is the largest buyer of Pakistan’s textile goods, importing goods worth $5.43 billion last year through June, according to State Bank of Pakistan. In return, cash-strapped Pakistan imported $1.88 billion worth of American goods, resulting in the trade imbalance.
Countries are scrambling to find ways to lower their US tariff burdens, and Pakistan is no different. Pakistan’s Finance Minister Muhammad Aurangzeb said last week Islamabad will send a high-level delegation to Washington to discuss the American tariffs.
“There have been talks of Pakistan potentially importing oil, soya been (oil) and cotton from the US. That’s already it,” an official who spoke to Arab News on condition of anonymity as he was not authorized to speak to media, said.
The finance ministry did not respond to Arab News’ request for a comment till the filing of this report.
The official said the Pakistani delegation will inquire about the expectations of the American government regarding trade, which could include abolishing duties or non-tariff barriers against US products.
“Or they may ask us to buy more cotton from them,” the official said. 
A senior official from Pakistan’s commerce ministry who spoke on condition of anonymity as well, said the discussions were at an “immature stage” and further meetings would be held to finalize them. 
“What decisions are taken, what we offer to them, all options are being examined,” he said. “Everything is on the cards but what is finalized, that cannot be said right now.”
Pakistan spends about $17 billion annually on oil imports, most of which come from the United Arab Emirates and Saudi Arabia. Pakistan is also counted among the largest buyers of cotton, which it uses as raw material for its huge textile industry. Most of Pakistan’s cotton imports come from the US.
As per official data, Pakistan spent more than half a billion dollars ($578 million) last year on the import of 204,890 tons of raw cotton and 119,845 tons of soya bean oil after the local harvest was found to be in poor quality.
In 2023, Pakistan began buying discounted Russian crude oil banned from European markets due to Russia’s war in Ukraine. Muhammad Waqas Ghani, head of research at the Karachi-based JS Global Capital Ltd., said Pakistan faces limitations in diversifying its product slate when it comes to Russian crude oil.
He said this was because Russian crude oil yields a higher output of furnace oil. a less desirable fuel in the country’s evolving energy mix. 
“Importing US crude could offer access to a wider range of crude grades, better aligned with Pakistan’s long-term goal of phasing out furnace oil,” Ghani explained. “This move would also open doors for improved trade terms and potentially pave the way for tariff relief which is our primary objective for now.”
‘OTHER VERY GOOD OPTIONS’
Pakistan’s cotton production has been hit hard by low quality of seeds and climate-induced calamities such as floods caused by excessive rains.
“Apart from that (US oil import) there are other very good options which are being discussed,” the official said. 
However, he confirmed that none of these options had been finalized yet as the delegation would want to meet the American officials and gauge Washington’s expectations.
“Let’s listen to them first,” he said. 
Pakistan’s financial experts and independent think tanks have advised Islamabad to establish trade agreements with emerging economies such as Africa or the Central Asian Republics (CARs) or reinforce existing partnerships with China or the Middle East. 
Financial experts have also called upon the country to use America’s imposition of tariffs as an opportunity and diversity its exports market to other regions to mitigate potential losses.

ISLAMABAD: Iraq’s Consul General Maher Mjhid Jejan has proposed a sea link between Pakistan’s southern port city of Karachi and Basra in a bid to improve logistics and strengthen trade routes, the Karachi Chamber of Commerce and Industry (KCCI) said on Wednesday.
Relations between Pakistan and Iraq have received a boost with a number of ministerial-level exchanges in recent years. The two countries have held discussions on enhancing defense and law enforcement cooperation, focusing on counterterrorism, counternarcotics and intelligence-sharing. Pakistan has attempted to strengthen trade, investment and cooperation in priority sectors with regional allies in recent months as it attempts to attract international investment to achieve sustainable economic growth.
Jejan visited the KCCI’s office on Wednesday during which he met the organization’s leadership. Talks between the two sides focused on strengthening business relations between and encouraging investment.
“He also proposed that a sea link between Basra and Karachi could play a key role in bringing the business communities of both countries closer together,” the KCCI said in a statement. “This connection could improve logistics and strengthen trade routes.”
Jejan said Iraq has introduced new investment laws designed to attract foreign investors, adding that these laws will be shared with the KCCI to help Pakistani businesses understand the opportunities available.
“He recognized the high quality of Pakistani products and expressed hope that Pakistani exporters and investors will explore the Iraqi market more actively,” the statement said.
The Iraqi consul general said his country is witnessing rapid development and offers immense potential for trade and investment. He encouraged Pakistani businessmen to visit Iraq and see first-hand the “peaceful and stable environment” in the country.
KCCI Senior Vice President Zia ul Arfeen told Jejan that Pakistan’s exports to Iraq stood at $54.29 million in FY24 while its imports from Iraq amounted to $145.46 million. 
“He said that this trade volume is far below the actual potential and emphasized the need for both countries to simplify customs procedures, promote ease of doing business, and expand the range of tradable goods and services,” the KCCI said. 
Arfeen said establishing an oil pipeline between Basra and Pakistan’s southwestern coastal city of Gwadar could create an important trade corridor for Iraq to access other Asian markets.