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Khurram Abbas // DAWN: April 10, 2025
RECENTLY China has announced construction of the world’s largest dam on the Yarlung Tsangpo River in Tibet. India has criticised Beijing’s initiative due to potential downstream impacts. This isn’t the only dam in the region facing opposition from a lower riparian state. India is advancing several large-scale hydropower projects, such as Tipaimukh dam on the Barak River, which is opposed by Bangladesh. Ratle, Pakal Dul, Kishanganga, Salma dam (also known as Afghanistan-India Friendship dam), Shahtoot dam and Kamal Khan dam have also raised serious concerns of lower riparian states, ie Pakistan and Iran.
As per international law, states can construct dams within their defined territories to utilise water for various purposes. Construction of dams is an internal matter of states to support economic development because they provide a reliable source of hydroelectric power, which is a renewable and cost-effective energy alternative, crucial for powering industries and households.
However, in this part of the world, construction of dams is a major source of tensions between upper and lower riparian states. Due to several reasons, construction of dams is not viewed as a positive development; rather, lower riparian states question ‘geopolitical motives’ behind construction of dams by upper riparian states.
First, the historic baggage of armed clashes and unresolved boundary disputes have plagued bilateral relationships. In case of Sino-India relations, strategic competition and border dispute have added fuel to the fire. Bangladesh, India, Pakistan, Afghanistan and Iran have similar border-related disputes and a history of troubled relations, which adds mistrust with regard to the respective upper riparian state’s intentions.
Pakistan is reluctant to engage India for revision of the IWT.
For instance, Bangladesh and Pakistan do not view floods as the result of their weak water infrastructure; rather, both countries often blame India for flooding. Afghanistan, Iran, and Pakistan face growing concerns over water scarcity, worsened by climate change, frequent droughts, and rising populations, which have reduced water availability for lower riparian states.
Second, the absence of a comprehensive water-sharing agreement between upper and lower riparian states is one of the major reasons for the construction of these dams. This also allows upper riparian states more freedom to take unilateral actions without consulting lower riparian states. Further, technological advancements and abundant economic resources have increased the ability of upper riparian states to construct big dams to control water flows. This is why upper riparian states reject calls to modify their projects to address concerns of lower riparian states.
Third, the changing world order and weakening of existing international norms has also ramped up the confidence of upper riparian countries. Upper riparian states view this evolving world order as an opportunity for maximisation of their interests with least accountability at global institutions. Thus, threats or attempts to restrict water flow to lower riparian countries have become a norm in international relations. This trend could be viewed in the Middle East, North Africa and South Asia.
The Indus Waters Treaty (IWT) is the only beacon of hope that has managed water-sharing issues between Pakistan and India since 1960. Yet this treaty too is currently under significant duress. With India sending two formal notices to Pakistan (in January 2023 and September 2024) seeking modifications to the treaty, coupled with aggressive statements from Indian leadership such as “blood and water cannot flow together,” concerns have been expressed by Islamabad that India might attempt to take ‘unilateral’ steps or may divert water flow from the western rivers allocated to Pakistan.
Climate change and growing water scarcity are two primary factors that necessitate revision of the treaty. However, Islamabad is reluctant to engage with New Delhi for revision of the agreement. Political instability, economic turmoil, weak water management of existing resources and lack of expertise in water-related diplomacy are key drivers of Pakistan’s reluctance to engage with India for revision of the IWT. On the contrary, New Delhi today is politically confident, economically stable, and diplomatically assertive as compared to 1960. Hence, Islamabad does not view it as the right time to renegotiate the treaty. Resultantly, Pakistan’s reluctance and India’s push to revise the treaty have put the IWT’s future in doubt.
Recent trends suggest that dams with geopolitical motives will further mar bilateral relationships between upper and lower riparian states. The 2023 Iran-Afghanistan clash, which killed one Taliban fighter and two Iranian guards, shows water disputes can lead to border conflicts, if left unresolved.
The writer is director of the India Study Centre at ISSI.
Published in Dawn, April 10th, 2025
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Ali Tauqeer Sheikh // DAWN: April 10, 2025
IN today’s complex global trade environment, Pakistan finds itself navigating between two competing demands: the Trump administration’s protectionist tariffs and the European Union’s emerging Carbon Border Adjustment Mechanism (CBAM). While these trade measures emerge from different motivations, they highlight similar structural weaknesses in Pakistan’s trade framework that demand urgent attention.
As Pakistan grapples with the dual pressures of economic stability and climate vulnerability, an often-overlooked dimension deserves urgent attention: how trade barriers impact our ability to meet climate commitments. The tariffs announced by the Trump administration have made it imperative for Pakistan to examine the underlying factors driving these barriers, quantify their potential impact, and adopt a strategic roadmap to not only mitigate these challenges but transform them into competitive advantages.
Structural factors behind US trade barriers
The Trump administration’s approach to trade with Pakistan reflects concerns about several longstanding structural issues evident in the relationship. According to the National Trade Estimate Report on Foreign Trade Barriers (NTE Report), Pakistan maintains an average Most-Favoured-Nation applied tariff rate of 10.3 per cent, with agricultural products facing even higher rates at 13pc. This protectionist framework runs counter to the administration’s focus on reciprocity in trade relations.
The administration has targeted Pakistan’s use of statutory regulatory orders that provide sector-specific exemptions and protections. These SROs, often issued without stakeholder consultations, create an unpredictable business environment that disadvantages US exporters. Despite pledges to limit SROs to genuine emergencies under previous IMF programmes, their continued issuance signals a resistance to transparent trade practices.
Administrative barriers are equally concerning for the US as Pakistan’s customs valuation lacks uniformity — the officials often using minimum values rather than declared transaction values. Requirements mandating physical documentation within shipping containers create compliance burdens that contradict modern electronic commerce practices.
Intellectual property protection remains another crucial concern. These structural weaknesses have provided the US with a justification for imposing tariffs, framed as responses to unfair trade practices rather than arbitrary restrictions.
The same structural limitations identified by the NTE Report will likely impede Pakistan’s ability to comply with the EU’s CBAM. These will initially apply to carbon-intensive goods, including cement, iron and steel, aluminium, fertilisers, electricity, and hydrogen, imposing stringent reporting and verification requirements regarding the carbon content of imports.
Pakistan’s difficulties with customs procedures and digital infrastructure create a challenging environment for implementing the carbon accounting required under CBAM. The reported “lack of uniformity in customs valuation” will only be exacerbated when customs authorities must additionally verify carbon content documentation.
Digital limitations pose another shared barrier. The NTE Report notes Pakistan’s data localisation requirements and limitations on cross-border data flows through the Personal Data Protection Act. CBAM compliance necessitates strong digital systems for tracking carbon throughout production processes and supply chains. The frequency with which internet services are suspended further undermines the digital infrastructure needed for modern trade compliance.
Investment restrictions, including equity caps and repatriation hurdles, similarly hinder Pakistan’s ability to attract the foreign capital needed to modernise industries to meet both US trade expectations and EU carbon requirements. The reported contract enforcement difficulties further discourage long-term international partnerships.
Divergent motivations, convergent requirements
While the Trump administration and the EU operate from fundamentally different policy objectives, their impact on Pakistan creates a convergent set of reform pressures. The US administration’s focus on economic nationalism and reciprocity shares little philosophical ground with the EU’s climate-centred approach. However, both demand similar underlying reforms to Pakistan’s trade framework.
While the US focuses on market access and economic competitiveness, CBAM emerges as a climate policy tool to prevent carbon leakage and ensure imports reflect appropriate carbon pricing. Despite these divergent motivations, both systems ultimately require Pakistan to increase transparency, modernise customs procedures, strengthen rule of law, improve digital infrastructure, and create more predictable regulatory environments.
This convergence creates a potential silver lining: reforms undertaken to address US concerns could simultaneously prepare Pakistan for CBAM compliance. For instance, addressing the reported weaknesses in customs procedures would benefit both relationships. Similarly, creating a more transparent system for regulatory orders would improve both US trade relations and provide the predictability needed for EU carbon reporting.
Expanding global challenge
The dual pressure from US tariffs and EU carbon measures likely represents just the beginning of a broader global shift. Some major economies are exploring or implementing similar carbon border measures. Even countries without explicit carbon border taxes are increasingly incorporating climate considerations into trade agreements and policies. These emerging systems create a complex matrix of compliance requirements for Pakistan.
Envisioning Green CPEC Framework
China faces similar pressures from US tariffs and European carbon border measures, creating potential for cooperation on compliance strategies. CPEC could evolve to incorporate green infrastructure and low-carbon manufacturing capabilities that would help Pakistani exports meet emerging standards.
CPEC presents a strategic opportunity to address both trade challenges through a Green CPEC Framework with three components: a) Low-Carbon Industrial Zones prioritising renewable energy in CPEC Special Economic Zones, b) Supply chain integration developing joint Pakistan-China standards for carbon accounting, and c) Technology transfer focusing on clean technology in future CPEC agreements.
From barriers to bridges
Ultimately, Pakistan’s response to these dual pressures will determine whether they represent insurmountable barriers or catalysts for necessary reform. By recognising the convergent nature of these seemingly disparate trade measures, Pakistan can pursue strategic reforms that strengthen its position in the evolving global trade architecture. The arbitrarily calculated barriers represent a stringent but straightforward list of complaints that Pakistan can address with speed, if the strategic objective is to regain lost trading space, and fill the void created by even higher tariffs on regional competitors.
The writer is a climate change and sustainable development expert.
Published in Dawn, April 10th, 2025
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Khurram Husain //DAWN: April 10, 2025
[The writer explains the effect of ongoing tariff war on Pakistan.]
IN today’s complex global trade environment, Pakistan finds itself navigating between two competing demands: the Trump administration’s protectionist tariffs and the European Union’s emerging Carbon Border Adjustment Mechanism (CBAM). While these trade measures emerge from different motivations, they highlight similar structural weaknesses in Pakistan’s trade framework that demand urgent attention.
As Pakistan grapples with the dual pressures of economic stability and climate vulnerability, an often-overlooked dimension deserves urgent attention: how trade barriers impact our ability to meet climate commitments. The tariffs announced by the Trump administration have made it imperative for Pakistan to examine the underlying factors driving these barriers, quantify their potential impact, and adopt a strategic roadmap to not only mitigate these challenges but transform them into competitive advantages.
Structural factors behind US trade barriers
The Trump administration’s approach to trade with Pakistan reflects concerns about several longstanding structural issues evident in the relationship. According to the National Trade Estimate Report on Foreign Trade Barriers (NTE Report), Pakistan maintains an average Most-Favoured-Nation applied tariff rate of 10.3 per cent, with agricultural products facing even higher rates at 13pc. This protectionist framework runs counter to the administration’s focus on reciprocity in trade relations.
The administration has targeted Pakistan’s use of statutory regulatory orders that provide sector-specific exemptions and protections. These SROs, often issued without stakeholder consultations, create an unpredictable business environment that disadvantages US exporters. Despite pledges to limit SROs to genuine emergencies under previous IMF programmes, their continued issuance signals a resistance to transparent trade practices.
Administrative barriers are equally concerning for the US as Pakistan’s customs valuation lacks uniformity — the officials often using minimum values rather than declared transaction values. Requirements mandating physical documentation within shipping containers create compliance burdens that contradict modern electronic commerce practices.
Intellectual property protection remains another crucial concern. These structural weaknesses have provided the US with a justification for imposing tariffs, framed as responses to unfair trade practices rather than arbitrary restrictions.
The same structural limitations identified by the NTE Report will likely impede Pakistan’s ability to comply with the EU’s CBAM. These will initially apply to carbon-intensive goods, including cement, iron and steel, aluminium, fertilisers, electricity, and hydrogen, imposing stringent reporting and verification requirements regarding the carbon content of imports.
Pakistan’s difficulties with customs procedures and digital infrastructure create a challenging environment for implementing the carbon accounting required under CBAM. The reported “lack of uniformity in customs valuation” will only be exacerbated when customs authorities must additionally verify carbon content documentation.
Digital limitations pose another shared barrier. The NTE Report notes Pakistan’s data localisation requirements and limitations on cross-border data flows through the Personal Data Protection Act. CBAM compliance necessitates strong digital systems for tracking carbon throughout production processes and supply chains. The frequency with which internet services are suspended further undermines the digital infrastructure needed for modern trade compliance.
Investment restrictions, including equity caps and repatriation hurdles, similarly hinder Pakistan’s ability to attract the foreign capital needed to modernise industries to meet both US trade expectations and EU carbon requirements. The reported contract enforcement difficulties further discourage long-term international partnerships.
Divergent motivations, convergent requirements
While the Trump administration and the EU operate from fundamentally different policy objectives, their impact on Pakistan creates a convergent set of reform pressures. The US administration’s focus on economic nationalism and reciprocity shares little philosophical ground with the EU’s climate-centred approach. However, both demand similar underlying reforms to Pakistan’s trade framework.
While the US focuses on market access and economic competitiveness, CBAM emerges as a climate policy tool to prevent carbon leakage and ensure imports reflect appropriate carbon pricing. Despite these divergent motivations, both systems ultimately require Pakistan to increase transparency, modernise customs procedures, strengthen rule of law, improve digital infrastructure, and create more predictable regulatory environments.
This convergence creates a potential silver lining: reforms undertaken to address US concerns could simultaneously prepare Pakistan for CBAM compliance. For instance, addressing the reported weaknesses in customs procedures would benefit both relationships. Similarly, creating a more transparent system for regulatory orders would improve both US trade relations and provide the predictability needed for EU carbon reporting.
Expanding global challenge
The dual pressure from US tariffs and EU carbon measures likely represents just the beginning of a broader global shift. Some major economies are exploring or implementing similar carbon border measures. Even countries without explicit carbon border taxes are increasingly incorporating climate considerations into trade agreements and policies. These emerging systems create a complex matrix of compliance requirements for Pakistan.
Envisioning Green CPEC Framework
China faces similar pressures from US tariffs and European carbon border measures, creating potential for cooperation on compliance strategies. CPEC could evolve to incorporate green infrastructure and low-carbon manufacturing capabilities that would help Pakistani exports meet emerging standards.
CPEC presents a strategic opportunity to address both trade challenges through a Green CPEC Framework with three components: a) Low-Carbon Industrial Zones prioritising renewable energy in CPEC Special Economic Zones, b) Supply chain integration developing joint Pakistan-China standards for carbon accounting, and c) Technology transfer focusing on clean technology in future CPEC agreements.
From barriers to bridges
Ultimately, Pakistan’s response to these dual pressures will determine whether they represent insurmountable barriers or catalysts for necessary reform. By recognising the convergent nature of these seemingly disparate trade measures, Pakistan can pursue strategic reforms that strengthen its position in the evolving global trade architecture. The arbitrarily calculated barriers represent a stringent but straightforward list of complaints that Pakistan can address with speed, if the strategic objective is to regain lost trading space, and fill the void created by even higher tariffs on regional competitors.
The writer is a climate change and sustainable development expert.
Published in Dawn, April 10th, 2025
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F.S. Aijazuddin DAWN // April 10, 2025
[Pak-US Relations, especially in the context of Tariff war]
HISTORY has been in love with Lahore since forever. It was not its only admirer. The Mughals remained enamoured of it. Akbar made it the capital of his kingdom for 14 years. Jahangir chose to be buried within sight of it. Shah Jahan embellished its fort. Aurangzeb commissioned a magnificent mosque opposite the fort.
Under the Sikh maharaja Ranjit Singh, Lahore became the fulcrum of his Sikh empire. It remained so until 1849 when the East India Company possessed it. From then, it reverted to its traditional role, subordinate to Delhi.
Today, the capital of the Sharifs oscillates between Model Town (originally named Ideal Town) and Ideal Islamabad. Sindh stands forfeit to the successor of the Talpurs. Khyber Pakhtunkhwa is a craggy eminence with feudal loyalties. Balochistan is a crucible of fermenting dissent. The provinces of Pakistan are beginning to look like a cracked mirror image of the creaking USA.
No man in modern history has changed the world’s rotation as suddenly or as capriciously as President Donald Trump has. He has reversed the globe’s orbit, from anticlockwise to clockwise. To Trump, this makes sense. The sun should rise in the west and set in the east, at least for the next four years.
Can Pakistan expect any relief from Trump?
His imposition of tariffs is a message to countries worldwide to recalibrate their economies according to his reordered chronometer. To him, globalisation is a dirty word, and economic interdependence a synonym for weakness.
He sees no advantage to the US in Russia supplying cheap gas to Europe, or French companies buying components from Germany for assembly in France. Trump must have smirked when his protégé Nigel Farage of the UK’s Reform Party brextricated Great Britain from the EU. The anthem in Brussels — Beethoven’s Ode to Joy — should be replaced by Sauve qui peut (every man for himself).
In the hastily constructed temple in which Trump sits as a presiding deity, a different mantra is being chanted. Globalisation is being replaced by transactionalism. It is economic narcissism at its best, or diplomatic worst.
Countries have already begun sending their emissaries to Washington to genuflect before the almighty dollar. US Secretary of State Marco Rubio is keeping count. He has announced that at least 50 countries have contacted the US to negotiate relief.
Pakistan has been quicker than most. On April 7, our Foreign Minister Ishaq Dar discussed with Mr Rubio “tariffs, trade relations, immigration and prospects for engagement on critical minerals”. The Trump administration has imposed a 29pc tariff on Pakistan. Dar hoped for a reduction to 10pc.
After their call, the State Department and Pakistan’s foreign ministry issued separate statements. The State Department said: “They (Rubio and Dar) discussed US reciprocal tariffs on Pakistan and how to make progress toward a fair and balanced trade relationship”.
“The Secretary raised prospects for engagement on critical minerals and expressed interest in expanding commercial opportunities for US companies.” The foreign ministry added that Rubio “reciprocated the desire to collaborate with Pakistan in trade and investment in various sectors, especially critical minerals.”
These critical minerals are the new weapons of commerce. It is well-known that the Trump administration wants to strike a deal with Ukraine over critical minerals as part of the peace settlement between Russia and Ukraine. Less publicly, Washington is discussing simultaneously with the Congo critical mineral partnerships to “help end a conflict raging in the African country’s east”. Peace on earth is being replaced by peace for earth.
During the Rubio-Dar call, Rubio “emphasised the importance of Pakistan’s cooperation with the US on law enforcement and addressing illegal immigration”. Dar countered that Pakistan had already offered the head of Mohammad Sharifullah, whom the US wanted for an attack on its troops fleeing from Kabul airport in 2021.
Can Pakistan expect any relief from Trump’s administration? The trade imbalance between the two speaks for itself. In 2024, the US imported from Pakistan $5.1bn, mainly textiles, leather goods, and furniture. The US exports to Pakistan included $772m of raw cotton and goods, $406m of iron and steel, and $141m of machinery. Pakistan (once a major cotton producer) now imports raw cotton and textile-based goods from the US.
Some classicists see a similarity between Trump and the legendary demon Hiranyakshsa. He obtained immunity from the devas against death by man or beast. He then stole the world and took it to the nether regions. It was retrieved by Vishnu’s avatar Varaha who, being half-man and half-beast, sidestepped the protective condition.
Many pray that some bipartisan American — half-Republican and half-Democrat — will challenge Trump and rescue our hapless world from this swirling disorder.
The writer is an author.
www.fsaijazuddin.pk
Published in Dawn, April 10th, 2025
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MORE TO BE EXPECTED TONIGHT
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