ISLAMABAD, Sept 16: Pakistan and the United States are likely to sign a Free Trade Agreement (FTA) soon to provide more concessions to each other’s businessmen.

Official sources said here on Monday that the FTA came under discussion between President Bush and President Gen. Pervez Musharraf in New York.

The US president told President Musharraf that since his government was extending all out support to America against terrorism Pakistan will be provided increased economic assistance including more market access to its products.

The sources said that President Musharraf asked his American counterpart that Pakistan did not want to seek unilateral economic assistance but it wanted some better arrangements like signing of the FTA for improving its economy through more market access and adequate tariffs.

The Pakistani delegation was also told that the US government had decided in principle to write off $1 billion debt, out of total of $3.2 billion Pakistan owes to the US. The issue has been notified in the US budget for 2003 and will be formalised after the approval by the US Congress.

The sources said that Pakistan had been assured that its present level of $300 million annual assistance would be increased to $500 million. The US government assured Gen. Musharraf that more resources will be lined up specially for Pakistan’s health and education sectors.

Both sides have agreed to work closely to enhance their trade and economic relations and the issue will now be figured during Finance Minister Shaukat Aziz’s visit to Washington later this month. He was going there to attend the annual meeting of the World Bank and the IMF.

During his visit, the sources said, he would have separate meetings with the senior US officials including the US Secretary of Treasury for expanding economic cooperation between the two countries.

Earlier, Minister for Commerce Abdul Razak Dawood had visited the United States and discussed with the senior officials of the Bush Administration measures to enhance bilateral cooperation specially the issue of market access.

Dawood has been saying openly that he was not satisfied with the present market access given to Pakistan by the United States. However, he expressed the hopes last week that bilateral cooperation would increase between the two sides and that US government would open new markets for Pakistani goods.