Pakistan Nears Historic Trade Breakthrough with United States

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Pakistan stands on the verge of securing a transformative Free Trade Agreement (FTA) with the United States, with senior officials indicating a deal could be finalized within days rather than weeks. State Minister for Finance Bilal Azhar Kayani hailed the potential agreement as an economic “game changer,” while Foreign Minister Ishaq Dar confirmed advanced-stage negotiations during his Washington visit, signaling a strategic reset in bilateral relations under the Trump administration.

The accelerated trade talks reflect Pakistan’s multi-vector economic diplomacy, balancing ties with the US, China, and Russia while capitalizing on renewed American interest in South Asia. Recent high-level engagements including Army Chief General Asim Munir’s White House meeting and Finance Minister Muhammad Aurangzeb’s commerce discussions demonstrate growing confidence in Islamabad’s economic reforms. The proposed FTA primarily addresses reciprocal tariff adjustments, potentially shielding Pakistan’s textile exports from punitive US duties that currently exceed 15% of $3 billion worth of annual trade.

Market analysts note the timing aligns with Pakistan’s urgent need for export diversification amid China’s economic slowdown. “An FTA with the US could offset declining trade with Beijing by unlocking access to the world’s largest consumer market,” explains Dr. Ayesha Siddiqa of the Institute of Strategic Studies Islamabad. However, the deal faces scrutiny from US manufacturers wary of Pakistani textile imports, with the National Council of Textile Organizations (NCTO) already lobbying for stringent rules of origin requirements.

While the agreement promises to boost Pakistan’s dwindling foreign reserves currently at $9 billion success hinges on sustaining macroeconomic reforms. The International Monetary Fund (IMF) has cautioned that trade benefits could be negated without parallel progress on tax collection and energy sector restructuring. As negotiations enter their final phase, Islamabad must demonstrate it can transition from geopolitical beneficiary to reliable trade partner a test that will determine whether this breakthrough delivers lasting prosperity or becomes another missed opportunity.