Pakistan, US Aim to Strengthen Economic Ties with New Trade Agreement

Pakistan and the United States have reaffirmed their dedication to enhancing economic collaboration. Both countries have agreed to pursue a novel trade agreement designed to broaden market opportunities, stimulate investment, and foster cooperation across vital industries.

This development occurred during a significant meeting between Natalie Baker, the Chargé d’Affaires of the U.S. Embassy, and Finance Minister Muhammad Aurangzeb on Friday at the Finance Division.

Last month, the U.S. administration implemented a reciprocal tariff of 19% on various Pakistani goods, a notable decrease from the initially suggested 29%, following an executive order by the U.S. President.

Pakistan’s adjusted tariff rate of 19% is lower than those of several economies in the region, including India (50%), Bangladesh (20%), Vietnam (20%), and Sri Lanka (20%).

Discussions During the Meeting

During the meeting on Friday, discussions encompassed topics of shared interest, focusing on ways to improve bilateral trade, commerce, and U.S. investment in Pakistan.

The finance minister mentioned that Pakistan’s economy has “turned a corner,” emphasizing that Moody’s recent upgrade—aligning all major international rating agencies in their evaluation of Pakistan’s economic performance—demonstrates that the government’s essential reforms are producing effective results.

Moody’s has raised Pakistan’s local and foreign currency issuer and senior unsecured debt ratings from Caa2 to Caa1. The agency also upgraded the senior unsecured MTN program rating from (P)Caa2 to (P)Caa1.

Aurangzeb emphasized that Pakistan’s ambitious tariff reforms are geared towards liberalizing trade and guiding the country toward growth driven by exports.

Aurangzeb conveyed his gratitude to the United States for its continuous economic and development support to Pakistan and highlighted his recent visit to Washington, D.C., where he engaged with U.S. Secretary of Commerce Howard Lutnick and United States Trade Representative Ambassador Jamieson Greer to finalize the trade agreement between the two countries.

The finance minister underscored that the agreement would usher in a new phase of economic partnership—especially in sectors like energy, mines and minerals, IT, cryptocurrency—while also expanding market access, drawing in investment, and promoting collaboration in areas of common interest.

He voiced optimism that the agreement would encourage increased U.S. investment in Pakistan’s infrastructure, developmental projects, and the digital and mining sectors.

Natalie Baker stated that the trade agreement offers a substantial opportunity for both Pakistan and the U.S. to increase bilateral trade.

She observed that U.S. companies are displaying significant interest in investment and entrepreneurial possibilities in Pakistan, especially in supply chain, production, project management, energy, critical minerals, mining, and oil exploration, as mentioned in the statement.

The meeting concluded with both parties reaffirming their dedication to collaborate closely to advance these initiatives, guaranteeing mutually advantageous outcomes and reinforcing trade and economic cooperation between the two nations.