Pasandeeda mulk — Giving trade a chance

Published: November 24, 2011

The writer is a New Delhi-based journalist who writes for Khaleej Times, Business Standard and Wall Street Journal jyoti.malhotra@tribune.com.pk

In the midst of the Haqqani memo affair that has completely captured Pakistan’s imagination, Commerce Secretary Zafar Mehmood made brave to tell the media in Islamabad, on November 22, that India cannot be a ‘most-favoured nation’ (MFN) of Pakistan because of the presence of a “negative” trading list between the two countries.

If the whole thing wasn’t so tragic, it would almost be comical, although I would give full marks to Mr Mehmood for walking a fine line and actually trying to tell his countrymen that being a friend of India isn’t such a bad thing.

Especially since, he added, normal trade between the two countries carried on even after Partition in 1947 and right up to the war in 1965. The open nature of the relationship slowed down after that, Mr Mehmood hinted, but the doors certainly remained open right through the 1971 India-Pakistan war.

It’s not clear when bilateral trade came to a near-complete standstill, but we could put it down to the Zia years. Clearly, the commerce secretary, who sees the files relating to Pakistan’s depressing macroeconomic indicators every day, believes that resuming a normal trading relationship with India will benefit Pakistan.

The country’s textiles magnates as well as its cement lobbies will be its immediate beneficiaries, as India has promised to withdraw all non-tariff barriers relating to the purported use of azo dyes by Pakistani textile manufacturers (they don’t, since azo dyes are banned in Pakistan) and will also accord cement certification on a regular basis.

Perhaps Mr Mehmood’s cautious denunciation of MFN for India is in response to the Urdu press war cry of India being a ‘pasandeeda mulk’. Some may ask, in the wake of Haqqani’s memo crisis, whether the Pakistan Army is on board — to which the answer is yes. Remember that there was a representative of the National Logistics Cell, believed to be a sister organisation of the ISI/army, present in the India-Pakistan trade talks.

Now Mr Mehmood is keenly aware that the transformation from the current ‘positive list’ — in which only 1,946 items can be traded — to a ‘negative’ list by February 2012, in which everything except those items named in the list can be traded, is a good thing.

To his considerable credit, he has been a fantastic interlocutor to India’s commerce secretary, Mr Rahul Khullar, since late-April, when both men decided they owed it to their respective citizenries to transform the bilateral relationship.

Remember that Pakistan has still not moved on the Mumbai attack accused as India has wanted. But, in deference to the slow-coach judicial system that pertains across the subcontinent, Delhi has agreed that more intractable issues, such as terrorism, must be separated from people-to-people matters, such as trade.

In fact, the Mehmood-Khullar duo have much more up their sleeve. Once that hateful ‘positive list’ is phased out and a ‘negative list’ introduced, the remaining year will oversee Pakistan’s movement to preferential trade under Safta — the Saarc free trade area — which will enable both countries to trade all goods.

Then comes stage three, when both countries will introduce a new ‘negative list’, which will allow trade for some goods at MFN tariff and some, even lower than that.

Next month, the home secretaries will fling open the doors for businessmen to travel across the border on a much easier visa regime that eliminates police reporting.

That’s what ‘pasandeeda mulk’ status means. So let’s give each other a chance.

Published in The Express Tribune, November 25th, 2011.

Reader Comments (18)

  • shafi Ahmed
    Nov 24, 2011 - 11:47PM

    After pointing out all negativities the author expresses sane views at last..im an optimistic but in case of india-pakistan relationship,i dont think there will b normalisation coz any small accident can our relationship sour..

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  • imran sahil
    Nov 25, 2011 - 12:23AM

    its great step,if both govt can not mis guided people trade relations give benefits to both countries govt as well as people,so govt’s of both countries should take brave and open stand on every point,other wise its also mis use’s as samjhota train.Recommend

  • Malangi
    Nov 25, 2011 - 12:30AM

    We , people of Pakistan do not agree with with any list regarding trade with India. We want clear movement on Kashmir , Water issue, Sir creek and Siachen first. If India wants to talk about terrorism first, then let’s talk about it first. Let’s talk about Indian State sponsored terrorism on Kashmiris for more than 20 years now. 500,000 Indian state sponsored terrorists has been deployed there for the last 20 years in which 100,000 Kashmiris have died or disappeared. Let’s Put the TERRORISM on top of the agenda and discuss the Indian State Sponsored Terrorism in Kashmir first. Certainly other terrorism issues will be discussed too but on top of the agenda will be Indian state sponsored Kashmir terrorism.
    No matter what Govt. of Pakistan who are considered Western stooges say or do, on ground People of Pakistan will not let anything move until Pakistan’s issues are addressed first. If not, let’s continue as we are doing now. This is a ridiculous argument that Pakistan is desperate to trade with India ad economy will not survive with out it. Rest of the world is open. We are not dying to trade with India. We never even utilize the true potential of trade with China or rest of the world. I strongly refute the theory that Pakistan’s Macroeconomic Indicators are unfavorable because of not doing trade with India. It’s Indian and Western propaganda which has nothing to do with reality. Marco economic indicators are down because of Pakistan’s participation in illegal and unnecessary western led Afghan War on terror. That’s the main cause of low growth figures. As soon as Pakistan comes out of this war on terror, economic indicators will change very positively whether Pakistan trade with India o not. Therefore, I strongly urge that we stop spreading misinformation here and every where and say things which has no substance.

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  • Falcon
    Nov 25, 2011 - 1:40AM

    Jyoti-Great article. As suggested, I think our objective in the short-term should be to separate intractable issues of terrorism from trade related issues. Other issues such as Kashmir and water problems will be resolved along the way. If enough sincere and well informed people on both sides stick to this, our children will be able to live in a better world for sure.

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  • G. Din
    Nov 25, 2011 - 2:59AM

    “There is many a slip between the cup and the lip” -Famous Truism

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  • Nov 25, 2011 - 8:56AM

    Time to flood Pakistan with goods.

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  • Max
    Nov 25, 2011 - 4:23PM

    I am not sure why all this fuss is being made. Do prople on both sides actually understand the concept and advantages related to it. Bilateral trade between the neighbors has always been cost effective than buying or selling in far away markets. Is oppostion prmarily coming from business community? If so import substitution (ISl) policies never worked. But if the oppodition is from religioud-nationalists, please know that they do not understaand relgion or nationalism, why to expect anything else from them?Recommend

  • Ghaznavi
    Nov 25, 2011 - 4:48PM

    @ Bruteforce

    Pakistani consumers are smart enough not to go for third class Indian products. The only thing that will flood Pakistan are orders from Indian traders who want to give Indian consumers value for their money. Its a high point for Indians, now they will be able to get quality and affordable products from Pakistan. Indian companies with substandard and avaricious appetite for profits have will face a tough time competing with Pakistani counterparts.

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  • Nov 25, 2011 - 5:45PM

    Please look at the headlines in Dawn of today “Pakistanis protest against improving trade with India….Members of Jamaat-ud-Dawa, Jaish-e-Mohammad, Lashkar-e-Taiba and Jamaat-e-Islami gathered in Muzaffarabad to demonstrated against the government’s decision.” and also comments by Malangi “We , people of Pakistan do not agree with with any list regarding trade with India. We want clear movement on Kashmir , Water issue, Sir creek and Siachen first.”

    In a state where It is not realized that it will benefit Pakistan more then India and long term interests of state and its people are subdued by hatred where is any chance for reason to survive. I do not see much hope ahead.

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  • Max
    Nov 25, 2011 - 7:31PM

    http://www.nytimes.com/2011/11/25/business/global/india-to-allow-foreign-retailers-to-own-stores.html?_r=1
    Read this and learn from it. Closing diplomatic doors or trade ties does not help but harm in the long run. If Pakistani entrepreneur is incompetent or reluctant to invest in Pakistan, let someone else take the driver’s seat.

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  • Nov 25, 2011 - 8:40PM

    @Ghaznavi:

    “Pakistani consumers are smart enough not to go for third class Indian products.”

    Lets see about that! Indians are competing with the World and you think India produces sub-standard products?

    We got the MFN, what we wanted. Pakistanis are good at, well, I dont know, we are good at Business.

    This is not a Cricket match. This is about survival.

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  • PTI.lad
    Nov 25, 2011 - 9:34PM

    MFN to India is a step in the right direction. End of story.

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  • jagjit sidhoo
    Nov 25, 2011 - 9:59PM

    @Ghaznavi&BruteForce neither India nor Pakistan produce world class quality consumer goods so get off your high horses and let the trade start maybe it will lead to better relations.Armchair hawks with no personal stake thats what both of you are.

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  • G. Din
    Nov 26, 2011 - 2:04AM

    @jagjit sidhoo: to Ghaznavi & BruteForce
    “Armchair hawks with no personal stake thats what both of you are.”
    And, what is your personal stake, sir? Why are you so intent on bringing the two divorced partners who hate each other so much, together? Most of the time such intensity as yours recoils on you. Gandhi spent a lifetime and then lost his life chanting “bhai-bhai”. Nehru spent his lifetime appeasing Muslims and died without accomplishing anything. Somethings are better to let be!

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  • jagjit sidhoo
    Nov 26, 2011 - 4:06PM

    @G. Din:” divorced partners” can get married to someone else and hope to start a new life but with neighboring countries enemies or friends you will always be neighbors better to be friends.Commonsense

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  • G. Din
    Nov 26, 2011 - 6:06PM

    @jagjit sidhoo:
    “…with neighboring countries enemies or friends you will always be neighbors better to be friends.Commonsense “
    Every relationship must, first and foremost, rest on the foundation of mutual respect. When that essential ingredient is missing, it is better to lay off. The more you try, the more you will be abused – like the abused wife, the more distant a healthy relationship will get. Think!Recommend

  • G. Din
    Nov 27, 2011 - 2:25AM

    ET: I would rather you moderate the whole comment out rather than butcher it beyond recognition.

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  • jagjit sidhoo
    Nov 27, 2011 - 8:17PM

    @G. Din: Agree on the point about not trying to hard but the aspect about geography will always remain .

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