A colleague here at FPA brought to my attention last week proposed legislation in the US congress regarding Afghanistan-Pakistan duty-free areas that looks like it may have promise. The legislation, spearheaded by Rep. Chris Van Hollen, would open up segments of Afghan-Pakistan territory to be free trade or duty-free zones. In other words, certain products could be made in these respective zones and then be sold to the United States with zero tariffs, hopefully giving them a strategic advantage. The upside to this move for the people and business of those Afghan-Pakistan territories is rather obvious, as this business would hopefully create new jobs and wealth for those involved.
However this legislation may face delay or opposition from US labor unions and must pass the a Democrat-controlled House and Senate. In this regard, Hollen, a Democrat, has received support from some fellow Democrats and Republicans, which have promised to help sponsor the bill and get it through Congress. There is also the logistical aspect of figuring out where the duty-free zones should be chosen and just how big they should be. Having these zones in too conflict ridden territories may curb the expected benefits, but also having them too big may create a backlash from American labor unions. In addition, choosing the acceptable goods to be duty-free, some likely to be textiles, will also be cumbersome and domestically sensitive. Hopefully these Congressmen, with the support of the Obama administration, can work out a deal that can satisfy all sides. Economic struggles are not the only reason for the conflict and pains of Afghanistan and Pakistan, but it certainly is a central aspect.
