Pakistan’s growing trade relationship with the European Union (EU) proves that its industry can leverage tariff reductions. Since 2014, through the GSP+ program, Pakistani textile and apparel exports have been able to enter the EU duty-free. Pakistani exports to the EU have grown by 25 percent since then. The EU has now supplanted the United States as the top destination for Pakistani apparel exports. In 2008, the United States was the destination for 45 percent of Pakistani apparel exports. In 2016, that figure dropped to 24 percent with the EU-15 now importing 54 percent of Pakistani apparel.

The Bush administration considered reducing tariffs on Pakistani textile and apparel exports after 9/11, but the proposal received resistance from the U.S. textile lobby. Instead, the administration and Congress wasted energy on a proposal to build “reconstruction opportunity zones” along Pakistan’s border with Afghanistan as well as earthquake-afflicted areas of Azad Jammu and Kashmir. The proposed legislation, which was never passed, allowed for textile (but not apparel) products manufactured in these areas to be imported into the United States duty-free. But these regions were distant from industrial centers, ports, and power supplies. And Pakistani territory bordering Afghanistan was home to Al Qaeda and a brewing anti-state insurgency.

Now, after the passage of a decade, Washington ought to revisit the idea of freer trade with Islamabad, focused on Pakistan’s main population centers and exports.

Sen. Lindsay Graham (R-SC) has proposed the idea of an FTA with Pakistan but in exchange for greater Pakistani pressure on the Taliban. Graham’s emphasis on an FTA and floating of it as part of a quid pro quo are misguided. An FTA would face stiff political opposition in Congress. A Pakistan-specific expansion of the GSP—similar to the African Growth and Opportunity Act—focused on textiles and apparel, applicable to the entire country, and untied to the future of Afghanistan, would be more practical and yield tangible benefits for both Pakistan and the United States.

Pakistan ranks among the top three export markets for American cotton and it has begun to import LNG from the United States. The growth of its textiles and apparel industry is likely to fuel greater demand for American cotton and energy. This synergistic approach toward trade could also yield reputational benefits for the United States, which would be able to showcase its trade relationship with Pakistan as truly “win-win.”

Compared to Pakistan’s trade relationship with China, the trade relationship between the United States and Pakistan is far more balanced and has significant room to grow in a mutually beneficial way. Since 1993, Pakistan has maintained a trade surplus with the United States, though it is shrinking. Pakistani exports to the United States have stagnated since 2006, remaining in the $3-4 billion range, while imports from the United States have begun to grow in recent years, rising from $1.8 billion in 2006 to $2.9 billion in 2018.

The revival of Pakistan’s textile and apparel industry could produce hundreds of thousands of jobs—a tangible achievement American could claim some credit for. And while Pakistan’s largest textile companies would be the biggest beneficiaries of a surge in exports to the United States, the benefits could trickle down to small and medium enterprises as well as Pakistan’s agricultural sector.

Expanded trade—with an initial focus on textiles and apparel—would send the message that America stands for a more equitable economic partnership. And it would provide a foundation for a long-term U.S. relationship with constituencies in Pakistan’s urban centers who have been negatively impacted by China’s unfair trade practices but may be courted by Beijing through the next stage of CPEC.

Arif Rafiq (@arifcrafiq) is president of Vizier Consulting, LLC, which provides strategic guidance on political and security issues in the Middle East and South Asia, and a non-resident fellow at the Middle East Institute. He is the author of the report, “The China-Pakistan Economic Corridor: Barriers and Impact,” published by the U.S. Institute of Peace.

Image: Reuters