KARACHI: Joe Biden’s presidency is poised for a major shift in US foreign policy, but the new administration is unlikely to change its stance on economic relations with Pakistan.
With Biden’s inauguration, experts did not notice any significant change in US policy towards Pakistan. Pakistan to AFPAC (an acronym referring to the Obama administration’s Afghanistan-Pakistan strategy), the lens of the Indo-Pak and China-Pakistan Economic Corridor (CPEC), which, according to the nature of US policy, The transaction is engaged, viewed from the United States.
Ehsan A. Malik, CEO of the Pakistan Business Council (PBC), said Pakistan was not independent of the role it could play (or could play) in advancing US interests in the region. He said that at present the US priority was to counter China’s growing influence and for this the US was partnering with India within the Indo-Pacific Alliance.
“It simply came to our notice then. Depending on US policy on troop withdrawals from Afghanistan, some benefits can be reaped for Pakistan. If the Biden administration works to restore the JCPOA [The Joint Comprehensive Plan of Action] With Iran, Pakistan may have an opportunity to trade.
The PBC CEO also said that when Chinese investment is primarily led by its public sector, “the United States leaves it to the private sector to choose where to invest.” Does “. Malik said government guarantees could facilitate investment but these are the basic principles of Pakistan’s investment that will influence the decision.
He believes that the implementation of intellectual property rights, such as ease of doing business and cost, are important commitments (and barriers) to investment decisions that Pakistan needs to address.
“A country that is unable to attract local investment (other than guaranteed returns or safe havens) cannot realistically expect to attract foreign investment in the immediate and high-paying consumer goods sector. This is another reason why there is hardly any investment in the Chinese private sector here.
He said that like other aspiring countries, a more preferential trade agreement with the United States and Pakistan would likely meet a number of demanding objectives. “These include labor and human rights, child labor, religious freedom, combating bribery and corruption, climate change, taxation and transparency in the movement of currency,” Malik said.
“Not every particularly high US priority is likely in trade deals. President Biden believes that before making further trade deals, the United States needs to improve its competitiveness.” There is talk of creating millions of new domestic jobs, “said the head of the PBC.
He said the United States is Pakistan’s largest export destination and 80 percent of its exports were textile products. “Nevertheless, we are in seventh place, accounting for a modest 2.8 percent of total US textile imports, while the United States “In the US Textile Import League, most of the countries ahead of Pakistan have not had access to a more favorable market than Pakistan,” he said, adding that Pakistan imports less than 1% of man-made fibers.
Thus, instead of relying on access to a more liberal market, Pakistan needs to address production capacity and expand its product range. Of course, a limited preferential trade agreement covering textiles and rice from Pakistan in exchange for cotton and soybeans from the United States will help close the competition gap created by low productivity, but it will also improve it. Will increase Due to the weak sector of agriculture, a comprehensive free trade agreement is not in Pakistan’s interest.
“Recognizing the need for the Basin administration to return to the Paris Agreement, to control widespread diseases and to revive its economy, the whole community, especially the WHO, has been reunited,” he said. It will have a positive effect on the world. ” Benefit from recovery in retail demand. Malik said that especially on vaccines, since no one was safe until everyone was safe, the Biden government is likely to step up its share of vaccines developed by US companies.
Former Central Bank Governor Yasin Anwar also does not see any material shift towards Pakistan economically or politically, which is contrary to the approach of the transaction as a sign of softening of rhetoric and some continuity.
“Instead of using economic weapons on the part of Pakistan to thwart the CPEC, I am confident that the United States will provide some assistance to counter China’s macroeconomic program under the CPEC,” he said. Will Adopting this approach could weaken US influence against the backdrop of negative statements over the past four years that did not yield positive results. I see some stability in this way but there is no material change in the policy as the main feature opposes the CPEC, ”Anwar said.
He said the IMF program was currently suspended and should be resumed under the agreement. I do not see any change in program conditions with the new US administration.