KARACHI, June 27: Pakistan businessmen gave a cautious welcome on Friday to a trade agreement signed by Pakistan and the United States this week, dismissing any significant potential returns for the country’s exporters.

Pakistan’s Finance Minister Shaukat Aziz and US Trade Representative Robert Zoellick in Washington on Wednesday signed the much-vaunted Trade and Investment Framework Agreement (TIFA), which aims at improving the US market access for Pakistani traders.

Zoellick called the signing, carried out in front of visiting President Pervez Musharraf, “an important moment in the US trade and investment relationship with Pakistan.”

But local businesses were unmoved.

“The agreement may hardly bring any meaningful benefit to Pakistani exports to the US,” vice-president of the Federation of Pakistan Chambers of Commerce and Industries M.A. Jabbar said.

“It’s merely an institutionalization of consultation between the ministries of commerce of the two governments.”

The agreement provides a “forum ... to examine ways to expand bilateral trade and investment,” Mr Zoellick’s office said.

Commerce Minister Humayun Akhtar, who laid the groundwork for the agreement in the United States in early June, had said TIFA’s signing would lead to a free trade agreement between Pakistan and the United States.

But his optimism was challenged by Mr Jabbar, citing the impending World Trade Agreement that calls for global free trade.

“TIFA would work out modalities of free trade between the two countries, which takes time. By the time it is implemented the WTO would be in effect, thus it would offset any benefits,” Mr Jabbar said.

Under the WTO agreement, which is due to be implemented in phases from 2004, all countries will open their trade boundaries for foreign goods with limited import tariffs in certain sectors.

“Who knows whether TIFA would lead to free trade or not,” Khadim Ali Shah Bukhari Securities’ chief analyst Arshad Arif said.

Mr Arif speculated that the United States might not allow free trade in textiles, Pakistan’s key export commodity, as the powerful American textile lobby was likely to resist such a move.

“Even if the US ultimately decides for free trade with Pakistan it would not open up its textile markets, especially to Pakistani knitwear and blended fabrics which have good potential to capture the US market,” Mr Arif said.—AFP