Pakistan’s Economic Relations with the United States (2015-2023): Challenges, Opportunities and Policy Lessons

Abstract

This article examines the nature of Pakistan’s economic relations with the United States during 2015-2023 to underline the challenges, opportunities, and policy lessons for the country. Pakistan’s longstanding engagement with the US has not resulted in an enduring economic partnership. US aid to Pakistan remains the cornerstone of their economic ties and is often provided as a transactional instrument in pursuit of the former’s geopolitical interests. This pattern is evidenced by the reduction and final termination of the US aid to Pakistan from 2015 to 2023. Regarding bilateral trade ties, the US remains one of the most important destinations for Pakistani exports, which are low in absolute as well as relative terms. In this context, the article identifies challenges and opportunities that correspondingly hinder and enable Pakistan to institute a robust economic relationship with the US. In light of these challenges and opportunities, the article offers policy lessons for Pakistan to prioritize economic interests in relations with the US.