Bilateral trade: Most favoured, but not yet best friends

Published: February 11, 2012

" One should see the issue of a conventional balance not an end in itself but as part of a larger framework of strategic stability," an India scholar Dr Suba Chandran.

NEW DEHLI: Pakistan is unhappy with India for “not addressing” its concerns over the removal of non-tariff barriers (NTBs), but Indian officials insist the delays are purely procedural.

“It was decided by the two sides that agreements for checking non-tariff barriers will be signed in February 2012. In fact, Fahim had written to Sharma in November that the deadline should be respected,” a Pakistani official told Economic Times on Friday.

The Indian Commerce Minister Anand Sharma is scheduled to meet his Pakistani counterpart Makhdoom Amin Fahim in Islamabad next week, where Pakistan is likely to announce a “shorter” negative import list in an effort to normalize trade ties with India.

At present, Pakistan allows only about 2,000 items, included in a positive list, from India. The two countries are also expected to ratify a new visa agreement that would facilitate movement of businessmen by cutting down processing time and allowing multiple visits to more than one city.

A Pakistani official said that the delay will generate negativity. “Pakistan’s switchover to a negative list was connected to the removal of NTBs. While the decision for a negative list may not be dictated by a delay in the agreements on NTBs, it will certainly generate negative vibes,” he said.

India had agreed to sign three pacts – customs cooperation, mutual recognition agreements on quality certification and grievance redressing mechanism – to convince its neighbor that it was serious about removing NTBs. But only the customs cooperation pact is ready. New Delhi had some problems with Pakistan’s draft on grievance redressing and has prepared a counter-draft. “Until both sides agree, the draft cannot be finalized and placed before the Cabinet,” an Indian official said.

On the mutual recognition agreements document, the draft was ready but the Cabinet note is to be floated by the consumer affairs ministry, which has promised to do so soon, said an Indian official.

Pakistan says a big reason for its trade gap with India is the NTBs. India exported goods worth $2.33 billion to Pakistan last year while its imports from that country were a mere $332 million.

Published in The Express Tribune, February 11th, 2012.


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