Pakistan is a beneficiary of the U.S. Generalized System of Preferences (GSP) program, which provides duty-free access to the United States for more than 3,500 products. In 2018, Pakistan`s exports to the United States totaled $326.0 million, or only 8.0% of total exports to the United States. Since the GSP regime is not largely due to exports of textiles, leather and clothing, Pakistan has not been able to fully exploit the benefits of the programme. An economy dependent on the textile industry, coupled with a lack of awareness and interest from traders, are factors that have prevented the country from fully exploiting the benefits of the programme. However, recent efforts by the Department of Commerce to include leather products in the GSP system have proven beneficial. NOTE: No commercial data is available for services provided with Pakistan. The report begins with an overview of the current trade patterns of Pakistan and the United States – the markets and key products with which the two countries actively trade, as well as the state of their current bilateral trade relations. A section follows on the likely impact of a possible free trade agreement between the two countries on bilateral trade. The impact of external factors, such as the ongoing trade war between the United States and China, was included in this study to better understand the impact on Pakistan – U.S. trade at a near medium-term level.
The report concludes with a brief analysis of some important sectors/industry in both economies and their likely role in free trade negotiations and their requests for access or protection. Starting in 2018, the United States imported more than $119.3 billion in textile products (HS-50 to HS-63) from the world, of which $102.9 billion was classified under clothing and interior textiles (HS-61 to HS-63). Given that textiles account for 78.2% of Total Pakistani exports to the United States, the signing of a trade agreement could likely open up the textile market to Pakistani producers. The majority of Pakistani textile exports to the United States are cotton-based, where there is potential for increased exports. Therefore, Table 53 was based on the size of the demand for textile imports into the United States and Pakistan`s ability to supply these peak imports.