- The Washington Times - Thursday, August 26, 2010

Supporters of a stalled Pakistan trade bill say deadly floods in the struggling nation should inject a new sense of urgency into the proposal, which has languished as labor unions, businesses and the textile industry fight over details.

Both a pending Senate measure and bill passed by the House last year seek to promote economic development in Pakistan and Afghanistan by identifying “reconstruction opportunity zones” (ROZ) in the two countries where covered exports would benefit from duty-free access to U.S. markets.

Notably, the proposals exclude items such as cotton shirts and trousers, which together comprise more than 65 percent of Pakistan’s apparel exports to the United States. Currently, those imports are subject to duties averaging about 17 percent.

In a letter to top U.S. government officials Wednesday, the head of the U.S. Chamber of Commerce said the current legislation would be more effective in helping the teetering countries if the product coverage were broader.

“Adding [cotton trousers and shirts] would not have a negative impact on U.S. textile producers as U.S. imports from Pakistan account for a mere 3.7 percent of total U.S. imports of these products,” Thomas Donohue, the Chamber’s chief executive officer, wrote in a letter to Secretary of State Hillary Rodham Clinton and U.S. Trade Representative Ron Kirk. “Including these products would increase incentives for companies to invest in these troubled areas.”

A spokeswoman for Mr. Kirk said the office did not immediately have a comment on the letter, in which Mr. Donohue also argued that the ROZ program should not be limited to “extremely remote areas” that are less likely to attract investment.

The U.S. textile industry is strongly opposed to any expansion of product coverage, which it says would result in significant job loss.

U.S. imports of cotton trousers and shirts from Pakistan are already 14.3 percent higher than the same time last year,” said Sarah Pierce, a senior vice president at the National Council of Textile Organizations. “These benefits are unnecessary to make Pakistan globally competitive, Pakistan is already a competitor in the U.S. market.”

In March 2009, President Obama called on Congress to approve the ROZ legislation as part of the U.S. effort to combat extremism by helping the country economically, but the effort stalled in the Senate after the House passed a version with stringent labor-monitoring requirements that business groups decry as unworkable.

The floods ravaging Pakistan reportedly have killed about 1,500 people and caused damage that will take at least three years to fix, according to President Asif Ali Zardari.

Under a Pakistan aid bill passed last fall, the United States has committed to giving the nation, a key security ally in the region, $7.5 billion over five years.

Prospects for congressional passage of the ROZ bill, either changed or as is, are unclear as Congress returns next month to a packed schedule with lawmakers eager to finish quickly and get back on the campaign trail ahead of November’s elections.



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