Pakistan, India trade: Timeframe to abolish negative list to be decided soon

Dates for secretary level talks being finalised for visit of an Indian delegation.


Our Correspondent May 17, 2012

ISLAMABAD: Pakistan and India will hold secretary-level talks to resolve the remaining outstanding issues for taking the trade normalisation process to a logical end, as the outcome of parleys will become the base for determining timeframe to abolish the list of items that cannot be traded.

In a testimony to the National Assembly Standing Committee on Commerce on Thursday, Commerce Secretary Zafar Mahmood said both the countries were finalising dates for the visit of an Indian delegation. The meeting has been arranged to get an update on the trade normalisation process.

He said after the conclusion of the visit the ministry will brief the federal cabinet about the outcome. “The abolition of negative list is subject to a positive outcome in further negotiations with India, as Pakistan is negotiating a relief from non-tariff barriers,” said Mahmood, who is spearheading the process.

Referring to a study ordered by the Indian government to figure out Pakistan-specific non-tariff barriers, Mahmood said according to the Indian report, Indian security agencies carry out surveillance of those who import goods from Pakistan, creating hurdles in the process.

In February this year, Pakistan took a big step towards trade normalisation and replaced a list containing 1,958 tradable items with only 1,209 non-tradable goods. The federal cabinet, in principle, also approved the scrapping of non-tradable list by December this year provided India addresses Pakistan’s concerns.

Mahmood said the cabinet will decide whether to eliminate the list in one go or in phases, depending on the progress in talks. He, however, pointed out that there are signs which indicate that both countries will further strengthen their relations.

The Reserve Bank of India and the State Bank of Pakistan, in a meeting held last month, decided to invite applications for opening bank branches in their respective countries.

Mahmood said Pakistan has turned down an Indian proposal to open bank subsidiaries instead of branches, as local banks are not ready to meet Indian regulations.

In another positive development, Mahmood said home ministries of both countries have been negotiating to ease visa restrictions and they will give good news next week. They were negotiating to remove reporting condition for the visitors, end entry and exit point limitations and introduce multiple-entry visas.

Mahmood said India has requested Pakistan to open Monabao trade route while the Punjab government has sought the opening of Kasur border route for promotion of bilateral trade. He hoped that 11 trade routes, which were working by the 1965 war, will gradually be reopened.

“It is for the first time that there is political consensus on trade liberalisation with India,” said Mahmood. According to an IBA study, trade normalisation will boost Pakistan’s exports to $10 billion in the longer run. Parliament’s Kashmir committee has also supported the process.

Currently, the volume of bilateral trade is $2.3 billion which is in favour of India that exports $2 billion worth of goods to Pakistan.

“The purpose of the meeting is to find evidence to argue for trade liberalisation with India,” said Engineer Khurram Dastgir Khan, the chairperson of the standing committee.

The commerce secretary pointed out that the automobile sector has so far been protected and the government has not allowed import of Indian cars. The cabinet will take a decision on opening of the automobile sector to competition in the next briefing.

“The government is protecting three industrialists at the expense of car users and this discriminatory policy should be abolished,” said Kashmala Tariq, a committee member.

Published in The Express Tribune, May 18th, 2012.

COMMENTS (1)

Riaz Haq | 11 years ago | Reply

Clearly, there is a lot of euphoria on expanding India-Pakistan trade. As Pakistan embarks on a new course in trade, it's important for its leadership to recognize the wide gap between the theory and practice of the "Washington Consensus" to effectively safeguard its economy, domestic industries and jobs for Pakistanis to develop and prosper in the 21st century.

http://www.riazhaq.com/2012/03/should-pakistan-ignore-washington.html

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