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USA & Pakistan Industrial Supply Marketplace

US-Pakistan Trade Relations: Fostering Ties Through Economy and Security
How The Strong Ties Started

Pakistan is strategically situated in South Asia between several other countries like China on its north, India on its east, and Afghanistan and Iran on its west and northwest. It formed part of British India until 1947 thus its economy was integrated with that of India. Partition truncated regional economic systems, cut across road, rail and irrigation systems and left most of the subcontinent's manufacturing industries in India. It began recovering in 1955 though the economy grew slower than how its population boomed.

Around 80% of the cultivated land was dependent on irrigation systems. During the 1960's, Pakistan raised yields of wheat which is considered as the major food grain in the country. Some other relevant outputs of agriculture are sugarcane, rice and cotton. One-third of the total farm income came from meat, wool, skins, hides and dairy products.

Since its disconnection with British India in 1947, manufacturing grew rapidly. The most predominant industries include cotton textile manufacturing and agricultural product processing. Forming part of its heavy industries are fertilizers, chemicals, pharmaceuticals, tools, machinery and steel.

As Pakistan achieved independence from British rule, its diplomatic relations with the United States started. Back in 1947, the US provided both economic and military assistance to the nation. Pakistan valued the strength given by the Americans, thus, in return, it offered partnership with the US in the Baghdad pact. The start of the friendship was not too favorable as there were issues that needed to be settled. The US did not provide any support to Pakistan during its war with India in 1965. Because of this, the latter concluded that the US may not really be a strong ally to the Pakistan government. Some restrictions were also seen especially on nuclear weapon concerns. However, with the willingness of both nations to foster peace and security, they gave their union another try in 1981. By then, both have helped each other establish a name in world trade while working more on security issues.

Major Exports and Imports between Pakistan and US

Pakistan's primary export commodities to the rest of the members of international business include textiles such as garments, bed linen, yarn, cloth and cotton. Other products transported to other nations are rice, leather and sport goods, carpets and rugs, manufactures and chemicals. The products it imports from other countries are petroleum and petroleum products, plastics, transportation equipment, machinery, iron and steel, paper and paperboards and edible oil. Its export activities are very strong with nations such as US, United Arab Emirates, Afghanistan, United Kingdom and Germany while its major suppliers are Saudi Arabia, UAE, China, Japan, US, Kuwait and Germany.

The US Census Bureau recorded exports from US to Pakistan at $1.76 billion for the period commencing January 2008 to October 2008. The imports of the former from the latter amounted to $3.0 billion for the said period. For the year 2007, the following statistics were available as to the trade relations of these two nations:

  • Pakistani Exports to US. The aforementioned US agency recorded exports from Pakistan to US at $3.58 billion for the entire 2007. Leading the list of the products were apparel and household goods from cotton which had total earnings amounting to $2.68 billion equivalent to 74.86%. Other noteworthy commodities on the charts were: cotton cloth and fabrics, thread and cordage; apparel and household goods from other textiles; rugs and other textile floor coverings; nontextile apparel and household goods; sporting and camping apparel, footwear and gear; other scientific, medical and hospital equipment; toys, shooting and sporting goods and bicycles; synthetic cloth and fabrics, thread and cordage; and cookware, cutlery, house and garden wares and tools. The last products made it to the top because of sales amounting to $22.51 million which is 63% of the year's total.
  • Pakistani Imports from US. While products from Pakistan made good earnings for 2007 on US grounds, those coming from the latter to the former had a remarkable stint in the market as well. The total amounting to approximately $2.04 billion was led by civilian aircraft. The said product made sales up to $452.03 million which is 22.21% of the year's total. Other goods on the list were: raw cotton; generators and accessories; telecommunications equipment; parts for military-type goods; steelmaking materials; tanks, artillery, rockets, guns and ammunitions; other industrial machines; drilling and oilfield equipment; and medicinal equipment. Medicinal equipment made a total of $42.89 million which is 2.11% of 2007's total under this category.
  • Fastest-Growing US Exports to Pakistan. Of all the products coming from US to Pakistan, oilseeds and food oils made a very large turn from the earnings it made in 2007 compared to 2006. The total sales for these goods went up to $1.7 million which is 2,492.65% higher than how it faired in the market for 2006. Other goods along this line were: complete military aircraft; copper; musical instrument; and nonmetallic minerals. Nonmetallic minerals were sold for 2007 at $630 thousand which is higher by 446.81% than what it made in 2006.
  • Fastest-Growing US Imports from Pakistan. The imports coming from Pakistan to US were remarkable as well. Along this line, other chemicals such as photo chemicals, print inks and paint topped the list with a total increase of 4,433% from 2006 with the total sales amounting to $133 thousands. Under this category, outstanding commodities were: raw hides, skins and fur skins; plastic materials; synthetic rubbers, wood, cork, gums and resins; and food and tobacco processing machinery. The last listed product increased its sales to $1.16 million which is 37.355% higher than what it made in 2006.
Pakistan Friendship and Commerce Treaty

In order to eliminate the barriers between the trade of US and Pakistan, the government officials found it very necessary to have a treaty. This led to the establishment of the so-called Pakistan Friendship and Commerce Treaty. The trade agreement was signed on November 12, 1959 with several amendments and ratifications made until it became enforced on February 12, 1961.

Just like any friendship and commerce treaty entered into by the US with other member nations of global business, this treaty aims to foster a good working environment with its comrade in Pakistan. Some vital points were stressed in the pact such as the aim to achieve peace and order for both nations. It was also geared on dealing with economic, cultural, social, religious and spiritual concerns to help enable closer and non-faltering ties between Pakistan and the US. The pact is cognizant of the contributions that it will make with regards to mutual and beneficial investments on equal grounds of commercial intercourse, rights and privileges. The pact applies both to locals, nationals as well as companies deemed to do business with the other contracting party.

The Conflicts which Affected the Trade between the Two Nations

More than their willingness to assist each other economically, Pakistan and US were both concerned about each other's security. There were wars which left their relationship a bit marred coupled with issues which in one way or the other affected the trade. Some of the most significant facts in history which led to problems with their trading relations were:

  • US's suspension of military assistance to Pakistan. During the Indo-Pakistan War of 1965, US had to suspend its military assistance not only to Pakistan but to India as well. This was because it did not want to help the other while it sacrifices its relationship with the other party. The suspension was said to affect more of Pakistan than India, hence the former concluded that US is not a good ally after all. To be able to help Pakistan solve the problems created by the war, US agreed on reestablishing its connection with the country thus increasing arms' sales in 1975.
  • US's suspension of economic assistance to Pakistan. Economic assistance was also suspended by US during its dealings with Pakistan. Shortly after reviving the ties militarily, in 1979, the American government cut off all types of assistance except food because of Pakistan's nuclear program. Since Pakistan explained its side about its unintentional construction of the nuclear weapon, the US Congress lifted all restrictions.
  • Other Issues. One of the issues that have destroyed the relationship is the violence on American officials and US mission employees by Pakistanis. Some rumors added to the plot of mob attacks to the US embassy. This resulted to death of six Pakistanis by US police enforcers. One event led to another thus the ties were a bit broken.
Future Trade Opportunities between the Two Nations

The concern on establishing the grounds for security will lead to a better union between Pakistan and US. Deaths and violence here and there have affected the bond but with the former's participation in the US's Global War on Terror as well as in the campaign of eliminating Taliban from Afghanistan marked the start of a promising future. Much more than these things, there are other future trade opportunities that both sides should take advantage of.

With the help of the www.uspakistan.org, the future trade relations of these two nations will surely be seen. Along this line, Pakistan encourages US direct foreign investors to make propositions and establish their own businesses on Asian grounds. The Council also focuses on discussion of key investment and economic plans and issues for the future. The support from both governments is needed in order to realize the dreams that will lead to the future.

A noteworthy start seen is the holding of several exhibitions by the Pakistan government. It involves expos and industry exhibits. A trade fair is a good indication of seeing which among the Pakistan products are worth starting business with. The automation and machine tools exhibit is also commendable. Exploring automobiles and automobile parts and accessories will also pave a way to better trade between US and Pakistan.

US-Pakistan Trade References

Note: Trade statistics, industry links, economic projections and global business resources on this page have been compiled from hundreds of trade related websites, government guides and resources on the Internet. We provide this valuable information for industrial suppliers, manufacturers, exporters and importers seeking to enter or expland business opportunities in Pakistan.

Market Research

Primary Trading Partners

Major Goods Exported

Major Goods Imported

Industrial Outlook

Pakistan's major industries include textiles and apparel, food processing, pharmaceuticals, construction materials, paper products, fertilizer, and fisheries (especially shrimp).

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Government Links

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