Dear Congress: Your tax on Pakistani shirts and pants is hurting America

Posted By Blake Hounshell Friday, November 12, 2010 - 9:56 AM Share

Of all the many foolish, self-defeating, and downright stupid U.S. policies -- from the Cuba embargo to agricultural subsidies to the prohibition on talking to Iranian diplomats -- tariffs on Pakistani textiles probably rank among the dumbest.

That's the conclusion I drew from the Council on Foreign Relations' thoughtful new report on Afghanistan and Pakistan, which was just released this morning.

The 112-page report, whose lead author was the council's Daniel Markey, a former top State Department official for South Asia, offers a mild-mannered, but unmistakable rebuke to the recent optimistic rumblings coming from U.S. military leaders in Afghanistan.

The bipartisan task force behind the report -- headed by former State Department No. 2 Richard Armitage and Clinton-era national security advisor Sandy Berger -- lends "conditional" support to the Obama administration's current strategy in Afghanistan and Pakistan, but recommends the U.S. downgrade its presence in Afghanistan if Obama's upcoming policy review finds that the current approach is failing. (Note: a number of task force members dissented from that conclusion.)

"We are mindful of the real threat we face," the report reads. "But we are also aware of the costs of the present strategy. We cannot accept these costs unless the strategy begins to show real signs of progress." 

The group makes a number of other recommendations -- including a vague call for the U.S. to do something about Lashkar-e-Taiba -- but to me, the textile tariffs stand out.

"The textile sector industry accounts for 38 percent of Pakistan's industrial employment, this agreement could provide employment opportunities for millions of young Pakistanis, discouraging them from paths leading to militancy," the report argues.

Given that additional aid to help Pakistan recover from the horrific floods that devastated the country this summer will probably be a tough sell on Capitol Hill, and the likelihood that China and other low-cost producers, not the remnants of the U.S. textile industry, would probably be hurt by lifting the tariffs, this strikes me as a no-brainer.

Unfortunately, as the Wall Street Journal reported in August that there's little appetite in Washington (or Brussels) to help the struggling Pakistani textile industry, which is getting creamed by Chinese competition.

The link between unemployment and militancy is controversial, but it doesn't get any more direct than in Faisalabad, the hard-scrabble town that was home to one of the Mumbai attackers:

The textile crisis has hit Faisalabad-a grimy city of three million named in the 1970s for the late King Faisal of Saudi Arabia-harder than anywhere in Pakistan. Scores of factories have closed recently here, in the heartland of Punjab province's textile industry.

Umer Apparel Ltd., a Faisalabad company that exports $15 million in goods to the U.S. annually, including brands like American Eagle and Aeropostale, has laid off almost a fifth of its work force of 1,500 and is running at only three-quarters of capacity, says its chief executive, Rana Hassan Sajjad.

Faisalabad officials are concerned about links between unemployment and a wave of Islamic extremism in the city. A number of suicide bombings by the Pakistan Taliban on government and civilian targets in Pakistan this year, including many in Lahore, the capital of Punjab, have been planned from Faisalabad, city police say."There's a valid link between joblessness and militancy," says Tahir Hussain, the chief federal government official in Faisalabad. "Wherever the militants are getting manpower, that's where the joblessness is."

About half a million Pakistani textile workers have lost their jobs, mainly due to Chinese competition, according to the Pakistani government. The United States charges a 17 percent tariff on Pakistani-made cotton shirts and pants -- lifting it entirely would net Pakistan as much as $4 billion a year, the government estimates. (Compare that to the paltry $150 million the U.S. offered after the floods, or the $7.5 billion Kerry-Lugar aid bill, which is spread over five years.)

Getting rid of the tariffs would not be without its complications. India would likely protest the move as unfair preferential treatment toward Pakistan, as would China. That isn't the real problem, though: U.S. textile producers would fiercely lobby Congress against the move, though American garment manufacturers and the U.S. Chamber of Commerce would mildly support it. And with a number of existing trade deals looking dead in the water, it's not clear such legislation would go anywhere.

Last year's experience is instructive: Congress tried to pass a bill establishing special trading zones in Pakistan to get around the tariffs, but Senate Republicans spiked it in a dispute over the law's labor provisions. In any case, as the New York Times noted in an editorial back in August, "The trade legislation that finally emerged from the House last year was so hemmed in with protectionist limits that it was almost worthless."

I hope this new report changes some minds, but betting on Congress to do the smart thing is never a good investment strategy.

AFP/Getty Images

EXPLORE:PAKISTAN, TRADE, U.S. CONGRESS
 

CEOUNICOM

11:54 AM ET

November 12, 2010

I'm a 'free marketer'...

...but I'm still questioning the idea of doing Pakistan *any* favors at this point.

Basically, trade is an extension of broad foreign policy, and given that our relationship has been so one-sided during the last 9 years (we give them money; they fuck us in the ass, pay Osama's rent and laugh about it), I'm not sure the freer-trade concept is so necessarily relevant to them as say... I don't know, West Africa? Myanmar? Any country in the world *except* them?

Sure: lifting trade barriers would help Pakistan, no doubt. But again: for our opening up to them, what do we get in return? A pissed on India and China? And nothing except vague promises of future assistance in the tribal areas which never materializes? You know what? Fuck Pakistan. We may need things from them because of the Afghan war effort, but given their intransigence-cum-incompetence, I'm not sure this is a "friend" we need or want to have. We can be nice to them in the halls at school, but when it comes down to the keg-party, tell the door-guy to kick them back into their shitty car and send them home to mom. Until they grow up and aren't a constant pain in the ass, let them suffer the consequences of their own horrible self-management. We're going to be drawing down in Afghanistan in a few years (2014 being the new target, although I still think its mostly fantasy), and we won't be so needy to beggar their support of our campaign. They'll cry the same lame thing that we did after the Soviet Union abandoned Afghanistan: "We were so good to you, and now you're treating us like shit!" The truth was, we never liked you, we don't trust you, we find dealing with you to be too high maintenance, and every dollar we pour into your shitty country goes down a toilet of military-spending for things like harassing India in Kashmir and funding jihadists to fight in Afghanistan. Cry foul all you want. You made your bed, you sleep in it.

 

CEOUNICOM

11:57 AM ET

November 12, 2010

sorry...

replace "pissed on", with "pissed off India and China"

Although think the sense probably is the same regardless :)

 

AEHSAN

11:40 PM ET

November 12, 2010

Lt me throw one back

Pakistan gets peanuts to fight the Taliban on behalf of the US without any regional security guarantees or major real economic assistance. The 'generous' funds cover just the cost of operations. Explain why Pakistan since 2001 should care if America wins or fails in Afghanistan? The failure of the narrative lies there. Seriously ask this whats been in Pakistan's national interest for it to see the US succeed. I can see the logic for US entanglement and for even US failure but when you see success whats in it for Pakistan? And failure to adequately answer this question is why Pak will not support the US effort whoel heartedly. Would you expect the US to support a Pak effort whole heartedly with cost to itself if there was no long term strategic advantage? If not why should Pakistan be so altruistic?

 

KRADIAC

2:29 AM ET

November 13, 2010

What is so called "Pakistani national interest"

Pakistan has to get used to playing the role of its size.It feels too big for its shoes.
It wants to colonize Afghanistan and India..but have a small doodle.So,it perennially wants some super power like China(against India),Saudi Arabia(against Iran) or US(against Soviet Union) to rent it and play their vassal and fund its oversized army and grand strategic depth delusions.The policy is the same whether it is civilians or military in power.Time to put Pakis in their place.Russians are co-operating and other logistics route are being reactivated..general portends are good.Pakistanis are stewing in their own jihadi soup.Sooner or later it will dawn on pea-sized Generals in GHQ and elite bureaucracy that game is over.

 

SUDKAN

4:40 PM ET

November 13, 2010

nobody owes Pakistan a living

The day pakis realize that (a) nobody owes pakistan a living and (b) at every tuen, (incl. helping US against USSR), Pakistan acted in its self-interest.

Thats logical on behalf of Pahistan. However, it is not logical to constantly bitch about nobody-loving-them-any-more.

Pakis need to realize that if they try to play big boys game, they need to be ready for big boys consequences. Nobody will step in to help them - not even Chinese, who ironically are the real reason for destruction of their textil industry. Why don't they try asking the Chinese to leave the US market to them, as a special favor to their 'strategic partner and all-weather friend?

they will very quickly get a lesson in real-politics - nobody-owes-pakistan-a-living

 

CEOUNICOM

9:31 AM ET

November 14, 2010

re: AEHSAN

""Pakistan gets peanuts to fight the Taliban on behalf of the US without any regional security guarantees or major real economic assistance. The 'generous' funds cover just the cost of operations""

I'm going to ignore this point for the time being, because billions aint 'peanuts' to a piss-poor country, and the 'cost of operations' are kind of questionable given A) the lack of them, and B) the fact that most of the things we'd LIKE Pakistan to be doing are also in their own long-term interests...

which drives to the point = your argument is basically that Pakistan and the US don't share any particular long term interests. Thats questionable, but taken at face value, it does nothing but validate my argument - if this is the way Pakistan views itself, then why should we be babysitting them and trying to get them to play all cooperative? You seem to be arguing the same old thing: "it makes sense that Pakistan isn't in line with us!"; but isn't the logic there (from a US standpoint) to then start treating them as they are, as opposed to what we'd like them to be?

You seem to think we should - what - spend more? Yet at the same time are arguing we shouldn't *expect* more?

Really, you're in complete agreement with me. Pakistan is never going to discover any shared interests with the US or its neighbors. They are going to play the schizophrenic, "we're important! -but we're victims!" game forever? Its a national delusion and source of most of their disfunction. The reason we throw them money and expect nothing at this point is to prevent any further erosion of their own government and civil institutions. Basically, paying them not to get worse. But its not working. I think they'll get worse either way, so we might as well save our 'peanuts' for those that appreciate them. (is the metaphor there India? .... maybe. I'm pretty unconcerned with the whole India/Pakistan conflict; as some smart commentators have mentioned, most Indians dont worry about Pakistan, whereas Pakistanis worry about India as a national pastime. I see it as nothing other than a generational/cultural psychosis. From the point of view of real, pertinent issues, (e.g. Trade, Security, Terrorism), India is an easy colleague, while Pakistan is a screaming lunatic who demands attention. our policy so far is to try and medicate the lunatic. I'm of the mind we should completely ignore the fucker until he runs out of breath. Pakistan may 'matter' because of some geopolitical realities, (large country in a very important corner of the world), but they don't matter in any other way, really. While most people think a 'collapsed' pakistan is the worst possible outcome (the same way a bankrupt GM or AIG would be 'unthinkable'), I personally think its OK to let them fail. It's the 'free marketer' in me. I've never been a fan of subsidizing failures.

 

CEOUNICOM

9:49 AM ET

November 14, 2010

p.s.

While I'm not at all really that experienced with the India-Pakistan conflict mentality (aside from what i've seen on these boards over the years)... it in some way reminds me of the experience of being a New Yorker living in the South of the US.

In the North, no one has discussions about the rightness or wrongness of the Southern blockade during the Civil War. No one thinks that hard about how cruel Sherman's March was. No one remembers what Picketts' Charge was, or why it even matters.

Whereas in the South, I was regaled frequently by people telling me how, "you yankees look down on us", and "Y'all just think cause you won Gettysburg that you can tell everyone else what to do"... etc. etc. And by the way = this was everyone from young people to older people. Meaning, it was a surprise to me how pervasive the memory of the civil war was to people in Tennessee, South Carolina, and Alabama... whereas the average person in New Jersey wouldn't even know what the hell they were talking about. Basically it was two different worldviews/mindstates. One didn't care; the other was perennially frustrated.

It seems to echo somewhat with the India-Pakistan relationship; one side is still fighting a war that is long, long over, and the other has pretty much moved on and forgotten about it.

I know in reality that is not exactly the case (e.g. Kashmir, cross-border terrorism, etc)... but still, the difference in the public mentality seems to be similar. I've never met Indians in America who bitch about Pakistan; I've never met a Pakistani (aside from a few really rich ones who've been here for generations) who fail to bitch about India.

 

AEHSAN

1:24 AM ET

November 14, 2010

Get Real

If you don't incentivize Pakistan guess what'll happen? Oh wait it already is...After 9 years the US fails in Afghanistan and pulls out under a Saigon/Iraq syle peace. The jihadies get and feel stronger than ever, the liberal few Pakistani's get pushed more to aside as the right wing is emboldened by ANOTHER superpower defeat (Thats the narrative that will be up on all Jihadi websites and mosques) and India will see renewed terrorism. The world community will be too weary to intervene and the gap between Pakistan and India militarily will not be big enough for a decisive strike by any one side. The US will return to isolationism. Is that what victory smells like to you guys? Really thats realism? You can be angry as much as you like with Pakistan and debate the morality of it till the cows come home but at least face the facts. This way everyone suffers.

 

AEHSAN

4:38 AM ET

November 15, 2010

@CEOUNICOM

2 issues here - 1) What should Pakistan do? Which is along debate and really one for and among Pakistanis but with (As is the way nowadays, the Globe trying to influence 1 side vs. another)and 2) What should the US do vis a vis Pak? And the second issue stems from your objectives in Af-Pak and is a US internal debate. Pak-India-US need to try and find a sweet spot if possible whcih I believe is - but you and a few other believe isn't. If you guys are right - then whats the point of further diplomacy? Aren't you already on that path with relevant consequences? The author of the article is firmly in the camp of trying to find a sweet spot because believ it or not, like it or not, thats not been done before - including the so called collaboration years with Musharraf who was a frigging disaster for everyone concerned.

 

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