The U.S. established diplomatic relations with Pakistan following the country’s creation in 1947. We have a broad multi-faceted partnership with Pakistan in areas ranging from education to energy to trade and investment. Furthermore, the U.S. and Pakistan maintain a strong security partnership that is working to dismantle terrorist networks. Attacks in 2014 on the Karachi airport and on an Army school in Peshawar had a catalytic effect across Pakistan and led to the adoption of a 20-point National Action Plan (NAP) to counter terrorism, and invigorated efforts to eliminate safe-havens within Pakistan. The U.S. welcomed Pakistan’s pledge to deny any militant group safe haven or the use of Pakistani soil to launch terrorist attacks. Pakistan continues to conduct significant military operations in the Federally Administered Tribal Areas (FATA) and other areas of the country to counter domestic terrorism.
U.S. Assistance to Pakistan
In 2009, as Pakistan transitioned back to civilian-led governance, the U.S. affirmed that sustained U.S. engagement with Pakistan’s civilian institutions and people – including through civilian assistance – is important to realizing our shared interest of Pakistan becoming a more secure, prosperous and stable democracy that successfully counters all forms of violent extremism and contributes to stability in the region. Since that time, the U.S. government has committed over $6 billion in civilian assistance to Pakistan, which includes over $1 billion in emergency humanitarian assistance in response to conflict and disasters like the 2010 floods. U.S. security assistance to Pakistan is focused on strengthening the counterterrorism and counterinsurgency capabilities of the Pakistan security forces, and promoting closer security ties and interoperability with the U.S.
Bilateral Economic Relations
The U.S. is Pakistan’s largest export destination country. The U.S. has consistently been one of the top sources of foreign direct investment (FDI) to Pakistan, with cumulative U.S. FDI in Pakistan in calendar year 2015 at almost $400 million, including $38 million in new investment. Pakistan has taken steps over the years to liberalize its trade and investment regimes, either unilaterally or in the context of commitments made with the World Trade Organization (WTO), the International Monetary Fund (IMF), and the World Bank. Pakistan completed its first-ever IMF Extended Fund Facility program in 2016 and is relatively open to foreign investment, but its ranking in the World Bank’s Doing Business Index remains low, largely due to energy, security, and governance challenges. In May 2014, following Prime Minister Sharif’s 2013 visit to Washington, the U.S. and Pakistan established a Joint Action Plan to expand bilateral trade and investment over five years. In June 2016 the United States and Pakistan organized the fourth U.S.-Pakistan Business Opportunities Conference, the first in New York City, to explore commercial opportunities and expand business-to-business linkages. Major U.S. investments are concentrated in fast-moving consumer goods, construction, chemicals, energy, transportation, and communications.