Trade ties with India

Pakistan has gotten stuck, once again, on the issue of giving India the Most-Favoured Nation (MFN) status as a requirement for free trade under the World Trade Organisation regime. The visiting Indian commerce minister, Anand Sharma and his delegation were persuasive on the prospects of bilateral free trade but the cabinet in Islamabad decided it had to further consult stakeholders before it opened the gates to Indian goods. Stakeholders, of course, means industries — or cartels — that want to be ‘protected’ by being put on the negative list, that is, the list of goods which India won’t be able to export to Pakistan.

One thought that the job of creating a negative list should have been completed in preparation of the current February visit of the Indian delegation, but there could be other reasons why Prime Minister Yousaf Raza Gilani would want to go slow. He is in trouble with the judiciary, doesn’t enjoy good relations with the army, which controls the country’s foreign policy, is facing a bristling opposition in parliament, which will not be satisfied completely with the sop of the 20^th Amendment and is trembling before a rising storm of concealed non-state actors within the so-called Defence of Pakistan Council (DPC) which won’t allow open trade with India.

The Gilani government is better-placed than the Musharraf regime to grant the MFN status to India. The Chambers of Commerce and Industry are united in their approval and most of the leaders in the industrial sector actually think India’s market is the next plausible target for them after the virtual destruction of the Pakistani market by terrorism. India gave Pakistan the MFN status in 1996; Pakistan is still dithering in 2012. The latter is also facing economic collapse because of its internal disorder and an unleashing of jihadi forces which the state can hardly control. Meanwhile, Indo-Palk trade languishes at $2.7 billion and ‘informal trade’ is touching $10 billion, all to the disadvantage of Pakistan’s exchequer.

The Indian side is understandably keen. It wants to open another trading point at Munabao-Khokhrapar on the Sindh-Rajasthan border, to prevent the concealed non-tariff barrier of a single inlet at the Lahore border. The Commerce Ministry in Islamabad was no less keen last year, as was apparent from its enthusiastic statements but come February, a lot of cold water has been poured over this enthusiasm by developments inside Pakistan. The layman is not able to grasp why the MFN is being given to ‘enemy’ India. Why call it the enemy? Because the media is bombarding his ears with how India is not yielding on Kashmir, is stopping Pakistan’s water through illegally built upriver dams, interfering in Balochistan and cooperating with the US and Israel to snatch Pakistan’s nuclear arsenal?

Warlike revisionist Pakistan doesn’t properly comprehend the importance of trade in the resolution of deadlocked disputes. Television anchors refer to India’s stubborn resolve not to discuss bilateral disputes and look at the MFN issue as a leverage that should highlight the ‘disputes first’ approach the world learned to set aside a long time ago. The Indian side is obviously less bothered about Pakistan — which it should have been because of the Mumbai attack — and has removed its objection to European Union’s decision to allow concessional trade in 75 Pakistani commodities. Of course, the Indian experts know that Pakistan has the right to protect itself against India’s dominant economy through the negative list and by insisting on the removal of all kinds of non-tariff barriers mounted by India unfairly against its imports.

The Pakistan Army had once expressed its ‘no objection’ to free trade with India. It needs to make another statement on this matter so that the jihadis gathered under the banner of DPC may quieten down a little, given the fact that ex-ISI bosses — one gathering in Peshawar organised by ex-Jamaat chief, Qazi Hussain Ahmad featured Generals (retd) Hamid Gul and Asad Durrani — attend its rallies.

Published in The Express Tribune, February 17^th, 2012.