ISLAMABAD, June 24: The United States is expected to move a bill in the Congress next month to allow duty- and tax-free imports from Pakistan’s tribal region and Azad Kashmir.
Officials said that based on the recent interaction with the US authorities both in Islamabad and in Washington, Pakistan expected the Congress to start discussions on the bill in July.
If approved, the law would allow access to all Pakistani products, including textile and clothing.
Pakistan and the US would, however, need to put under a system aimed at certifying that products reaching the US market originated from the Reconstruction Opportunities Zones (ROZs) in Pakistan’s tribal areas and those affected by the 2005 earthquake.
The sources, however, said the draft law had not been shared with Pakistan despite repeated diplomatic efforts, raising doubts about the overall benefits accruing to Islamabad owing to strict conditions that might come with the law.
The US is Pakistan’s single largest trading partner, with trade volume exceeding $6 billion per annum.
Textile and clothing products account for about 90 per cent of total Pakistani exports to the US.
In some categories, the products are subject to up to 32 per cent duty through trade weighted average tariff.
The US market is generally a low tariff one for manufactured goods attracting just 3.9 per cent tariff but textile and clothing and agriculture are highly protected sectors having up to 9.5 per cent tariff.
Islamabad hopes the legislation would enable Pakistani products gain free market access in the US, since it was aimed at improving the conditions of the depressed and deprived areas of Pakistan to counter poverty and extremism through job creation.
Twenty districts and one tribal agency have been identified for the purpose, and would also include southern and western areas bordering Afghanistan, including but not limited to tribal agencies, besides earthquake-affected areas in Azad Kashmir and the NWFP on the northern side.
The US authorities have been urging Pakistan to chalk out customs rules for ROZs and also to develop high labour standards. This requirement is yet to be met.
