Aurangzeb holds 'productive' trade talks in Washington

ISLAMABAD: Pakistan’s Finance Minister Muhammad Aurangzeb rushed to Washington and held crucial talks with the Trump administration to negotiate a potential trade deal.

“Hopefully, trade talks will be concluded,” said a top minister of the Shehbaz Sharif-led government when approached for comment on Friday night.

This scribe had sent a query to the finance minister last Wednesday regarding a possible visit to the US for tariff negotiations, but the minister did not respond. However, he proceeded to Washington and met with US Secretary of Commerce Howard Lutnick and United States Trade Representative Ambassador Jamieson Greer on Friday.

Following Chief of Army Staff Field Marshal Asim Munir’s recent visit to the US, both countries are finalising trade discussions. Sources indicate they are considering either a Preferential Trade Agreement (PTA) or a Bilateral Trade Treaty (BTT). Washington has been pursuing BTTs with countries where its annual trade deficit runs into billions.

The US may grant Pakistan favorable textile tariffs (around 10 percent) in exchange for incentivised tariffs on American cotton and soybean exports to Pakistan. Both sides are exploring WTO-compliant incentives, official sources revealed.

Notably, the US has established 970 Research and Development (R&D) centres in India.

At this critical juncture, Pakistani negotiators must leverage this opportunity to secure maximum benefits. Past attempts, such as the Reconstruction Opportunity Zones (ROZs) negotiated during the Musharraf/ Shaukat Aziz era post-9/11, failed despite Pakistan’s heavy sacrifices in lives and economic toll. Currently, Pakistan enjoys a trade surplus with the US, exporting $5.1 billion against imports of $2.1 billion—a $3.1 billion surplus.

While the US typically pursues BTTs with high-deficit partners, it is considering enhanced market access for Pakistan under existing frameworks. For instance, Pakistan’s imports of US cotton and soybean could see tariff rationalisation under the newly enacted National Tariff Policy (2025-26 budget).

In return, the US may incentivise Pakistan’s textile sector by $2–3 billion annually. “Different options are under consideration, and both countries are finalising reciprocal tariff incentives,” said official sources.

A finance ministry statement confirmed that Aurangzeb’s delegation held a productive meeting with US officials, with both sides expressing satisfaction over progress in trade and economic ties.

Finance Minister Aurangzeb highlighted the US as Pakistan’s largest trading partner and stressed expanding cooperation in IT, minerals and agriculture. Both parties expressed optimism that ongoing talks would yield mutually beneficial outcomes.