WASHINGTON, Nov 2: The White House told lawmakers it wants to slash tariffs on Pakistani products for up to three years as part of an aid package rewarding Islamabad for its help in its war on terrorism, sources close to the issue said on Thursday.

But US textile manufacturers have launched a last-ditch lobbying effort to block the tariff cuts, warning that American textile workers would lose their jobs. Under pressure, sources said the administration could scale back its proposal and include safeguards for US producers.

The trade benefits, subject to congressional approval, would be part of a broader package expected to include $500 million in financial aid, debt rescheduling and Washington’s support for international loans that could be worth billions for Pakistan.

President George W. Bush could announce the $500 million in economic aid in the coming days, sources said.

Under the administration’s trade proposal, Congress would grant Bush the authority to reduce or eliminate tariffs on certain Pakistani goods through 2004.

The administration would also allow Pakistan to increase this year’s shipments of textiles to the United States by using a portion of next year’s quota, sources said.

A senior administration official said the White House wanted Congress to act quickly, but stressed the need to garner broad support. “You really want to do something, I think, where everybody’s behind it. The worst thing to do would be to raise expectations and not be able to meet it,” the official said.

About 85 per cent of Pakistan exports are textile products. The United States imports about $2 billion worth annually.

But international buyers have begun to look elsewhere for goods, fearing war and political instability as Washington bombards neighbouring Afghanistan in response to the Sept 11 attacks on the World Trade Center and the Pentagon.

An administration official said the proposed trade concessions should help “offset whatever disincentives or perceptions there are about the business risk in Pakistan at this point.”

But the US textile industry has stepped up pressure on the administration and Congress to limit the trade benefits extended to Pakistan, warning that a flood of low-priced imports would harm domestic producers and lead to more job losses at cash-strapped US plants.

“We don’t need anything that slows down US production or puts people out of work at this time,” said Carlos Moore, executive vice president of the American Textile Manufacturers Association.

Rep. Michael Collins, a Georgia Republican, has also raised concerns, particularly about changing Pakistan’s quota for textiles. “We don’t see a need,” Collins’ spokesman, Dan Kidder, said.

Kidder said the congressman, who sits on the House Ways and Means Committee with jurisdiction over trade, wanted any legislation aiding Pakistan to include safeguards for US textile manufacturers.

So far, the United States has doled out $100 million in economic assistance and rescheduled $396 million in debt. But Islamabad is seeking more, including new loans from the International Monetary Fund.—Reuters