Pakistan, US Strike Trade Deal to Secure Exports, Boost Investment

Pakistan and the United States have wrapped up a pivotal round of trade negotiations, reaching a framework agreement to safeguard Pakistan’s key export sectors, according to Dawn News. The deal, finalized just days before the July 9 deadline, averts the reimposition of a 29% U.S. tariff on Pakistani exports, primarily textiles and agricultural products, which was temporarily paused earlier this year.

Led by Commerce Secretary Jawad Paal, the Pakistani delegation in Washington secured a long-term reciprocal tariff agreement during four days of talks. While a formal announcement awaits the U.S. concluding similar negotiations with other trade partners, officials are optimistic about the outcome. The agreement is set to boost Pakistani imports of U.S. goods, particularly crude oil, and attract American investment in Pakistan’s mining, energy, and infrastructure sectors, with the Reko Diq copper-gold mine—a $7 billion project—being a focal point.

The deal also opens avenues for deeper engagement through the U.S. Export-Import Bank, which is reviewing $500 million to $1 billion in financing for Reko Diq. This strategic project, expected to generate $70 billion in free cash flow over its 42-year lifespan, underscores Pakistan’s push to leverage its mineral wealth in trade diplomacy.

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Pakistani officials prioritized an early resolution to eliminate uncertainty for exporters and investors, especially as the U.S. market accounts for a $3 billion trade surplus for Pakistan in 2024. The agreement aims to reset strained bilateral economic ties, impacted by Trump-era tariffs, and ensure continued access to the U.S. market for Pakistan’s textile and agricultural sectors.

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