Getting Real on Trade with Pakistan: Duty-Free Market Access as Development Policy

Abstract

The combination of relatively high American barriers to trade in textiles and apparel and the importance of the sector to the Pakistani economy make increased market access a potentially powerful tool of U.S. policy. Unfortunately, recent proposals to extend duty-free market access for Pakistani exports restrict the product and geographic coverage so severely that they would be meaningless in practice. Moreover, the analysis in this paper suggests that the concerns about job loss in the U.S. textile industry from broader coverage are exaggerated. A serious trade package for Pakistan would expand the geographic coverage to allow duty-free imports from all of Pakistan, expand the product coverage for clothing, and cover all other Pakistani exports, as well.

Keywords: trade policy, textile industry, Pakistan, economic development