United States to delve into joint efforts with Pakistan, focusing on strategic minerals and hydrocarbons.
The United States and Pakistan are strengthening their economic ties, with a recent trade deal expected to lower US tariffs on Pakistani imports and boost bilateral trade. This development is a significant step towards a more stable and mutually beneficial partnership between the two nations.
The trade deal, hailed by both Washington and Islamabad, aims to reduce US tariffs on Pakistani imports from 29% to 19%. This reduction is likely to enhance Pakistani access to the US market, particularly for textiles and agriculture, while encouraging US companies to invest in Pakistan’s industries, creating jobs and stimulating economic development.
The cooperation extends beyond trade to strategic sectors such as hydrocarbons. The two countries have agreed to jointly develop Pakistan's substantial oil reserves, with potential benefits including increased energy production, reduced energy import dependency, and new revenue sources for Pakistan.
The strategic realignment between the US and Pakistan also promises broader multisectoral benefits. US investments have brought advanced technology and managerial expertise to Pakistani manufacturing facilities, particularly in Sindh and Balochistan, enhancing local economies and supporting social programs in education and health.
The southwestern Balochistan province is home to key mining projects, including Reko Diq, run by mining firm Barrick Gold. While specific mention of critical minerals cooperation is not yet prominent, the strategic realignment and increased economic engagement lay a foundation for potential future collaboration in resource sectors beyond hydrocarbons.
The US market could provide a notable competitive edge for Pakistan's exporters. Pakistan's Commerce Minister Jam Kamal has stated that the country will offer US businesses opportunities to invest in mining projects, particularly in Balochistan. However, it's important to note that the US has designated separatist militant group Balochistan Liberation Army as a "foreign terrorist organization."
The cooperation was mentioned in a statement issued by the State Department on Pakistan's Independence Day, and the latest round of counterterrorism talks between the US and Pakistan took place in Islamabad. The US deeply appreciates Pakistan's engagement on counterterrorism, with Michael Kugelman, a Washington-based South Asia analyst, stating that the US-Pakistan counterterrorism dialogue joint statement is one of the most positive and effusive he's seen from these two countries on counterterrorism for quite a few years.
The relationship between Washington and Islamabad cooled in recent years due to various factors, including the US drawing closer to Pakistan's traditional adversary India and countering China's rise. However, under the current administration, there seems to be a renewed focus on strengthening ties with Pakistan, with President Donald Trump taking credit for a ceasefire between India and Pakistan in May 2020.
In summary, the revitalized US-Pakistan economic relationship in 2025 is characterized by a key trade deal, US investment inflows, joint development of oil reserves, and a strategic move toward a balanced partnership that promises mutual economic growth and regional stability.
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