FinMin Aurangzeb Holds ‘Productive’ Trade Talks in Washington for Tariff Relief

Finance Minister Muhammad Aurangzeb has concluded a round of high-level discussions with US officials in Washington, focusing on tariff relief and enhanced trade ties between Pakistan and the United States.

According to official sources, the meetings were described as “productive,” with both sides expressing satisfaction over the progress made so far. The talks took place on Friday, July 18, where the finance minister met with US Secretary of Commerce Howard Lutnick and US Trade Representative Ambassador Jamieson Greer.

The visit follows the recent US trip by Chief of Army Staff Field Marshal Asim Munir, signaling continued efforts by Islamabad to deepen economic diplomacy alongside strategic ties.

Officials revealed that Pakistan and the US are exploring two options to formalize trade terms — either a Preferential Trade Agreement (PTA) or a Bilateral Trade Treaty (BTT). Traditionally, the US signs BTTs with nations where it has large trade deficits. However, Pakistan currently enjoys a $3.1 billion trade surplus, exporting $5.1 billion worth of goods while importing $2.1 billion from the US.

Discussions have focused on WTO-compliant reciprocal incentives. The US is considering reduced tariffs (around 10%) on Pakistani textiles, in exchange for incentivized tariffs on American cotton and soybean exports to Pakistan. Under Pakistan’s National Tariff Policy (2025–26), these imports may be further rationalized.

Officials estimate that the tariff concessions could benefit Pakistan’s textile sector by $2–3 billion annually. Pakistan is currently the second-largest importer of US cotton in South Asia, after China.

With 970 US R&D centers established in India, Pakistani negotiators are under pressure to secure favorable terms and avoid repeating past failures like the Reconstruction Opportunity Zones (ROZs) proposed after 9/11, which never materialized despite Pakistan’s significant sacrifices.

Sources said a detailed list of US demands has been shared with Pakistani negotiators, including requests to remove tariff and non-tariff barriers and fulfill other preconditions necessary for a formal agreement.

Aurangzeb stressed that the United States is Pakistan’s largest export market, and emphasized the need to expand cooperation in IT, minerals, and agriculture. The finance ministry confirmed both sides were optimistic about reaching a mutually beneficial outcome.

The government initially hoped to conclude talks by early July, but progress has been slower than expected. However, recent meetings suggest that a framework deal may be close, potentially reshaping Pakistan’s trade dynamics in the coming years.