Better Indo-Pak trade ties remain as elusive as ever

Published: July 27, 2012

As New Delhi drags its feet, Foreign Office places moratorium on further efforts. ILLUSTRATION: JAMAL KHURSHID

ISLAMABAD: 

Efforts for normalisation of trade between Pakistan have been dealt a serious blow, partly due to New Delhi’s reluctance in reciprocating moves made by Pakistan to ease trade restrictions. The Pakistani Foreign Office has now curbed efforts, which envisioned bringing the embattled neighbours closer through stronger trade ties, saying that slow progress in dialogues on other disputed issues necessitates toning down rapprochement efforts.

“Prospects to abolish the negative list by December this year have considerably dimmed,” sources in the Ministry of Commerce told The Express Tribune.

The Federal Cabinet had given in-principle approval for the abolishment of the negative list, which still contains 1,209 non-tradable items, by December 31; in line with granting the Most Favoured Nation status to Pakistan’s once arch-rival. It had asked the commerce ministry to negotiate with India, in order to seek more relaxations for Pakistani exporters, before trade ties were completely ‘normalised’. The commerce ministry was to report back to the Cabinet after holding another round of commerce secretary-level talks with India.

Sources told The Express Tribune that commerce secretary-level talks to this end were scheduled tentatively for May this year, but were postponed due to the objections raised by the Foreign Office. The Foreign Office had asked the ministry to “go slow” after no significant progress was achieved on other contentious matters, despite repeated rounds of talks.

Both sides had held multiple discussions to arrive at resolutions to the Sir Creek, Siachen, visa relaxation and counter terrorism issues; but no new ground was broken.

Commerce Secretary Munir Qureshi confirmed to The Express Tribune that the talks were not held in May on the Foreign Office’s diktat.

“Trade talks are not independent from other disputed issues, as they form a part of broader Confidence Building Measures,” Qureshi explained, responding to broader objections to the delay caused by lack of progress on matters unrelated to trade.

Pakistan’s decision, to replace the positive list – which had allowed only 1,956 items to be traded across the border – with a negative list In February this year, had been dubbed a giant leap in bilateral trade relations between the two nations. During the Indian commerce minister’s visit to Pakistan in February, both countries had inked three pacts on harmonisation of customs procedures and resolution of quality control issues.

However, contrary to expectations and assurances given by India, Islamabad says it has not yet received concessions it had earlier hoped for.

Our sources said that despite signing various agreements that aimed to allay Pakistan’s concerns regarding non-tariff barriers, India has not done much to make these treaties effective. The sources said India also did not agree to equal duty slabs on products on both sides of the border – a measure Pakistan believes will boost bilateral trade by providing a level playing field to exporters of both nations. Commerce Secretary Qureshi added that non-tariff barriers were also a major concern for Pakistan.

Qureshi also claimed that India has not yet reduced its sensitive list by 30%. The list contains items that carry high duties slabs, aimed at protecting selective industries in the member states of the South Asian Association of Regional Cooperation.

However, he did offer some hope to proponents of Indo-Pak trade, when he said there were indications that the next round of talks may yet be held in September.

Foreign Office spokesman Moazzam Ali Khan was not available for comments.

Published in The Express Tribune, July 27th, 2012. 

Reader Comments (14)

  • Gary
    Jul 27, 2012 - 2:47AM

    “Efforts for normalisation of trade between Pakistan have been dealt a serious blow, partly due to New Delhi’s reluctance in reciprocating moves made by Pakistan to ease trade restrictions.”

    The above statement is misleading. What exactly is Pakistan reciprocating? India impose no country specific restrictions on Pakistan. Pakistan asks for a special treatment, and India dis-agrees.

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  • Rajendra Rana
    Jul 27, 2012 - 9:29AM

    Who in India cares for trade with Pakistan

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  • Jul 27, 2012 - 11:34AM

    WTO rules say if a country, in this case India, is placing a non-tariff barrier for a product, it should apply to all countries, which is exactly what India has done.

    Pakistan can do the same with their products.

    But, Pakistan is asking for a country specific waiver, which is against WTO rules.

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  • Hafiz Shah Ali
    Jul 27, 2012 - 12:22PM

    Pakistan and India also need to draw up a new Avoidance of Double Taxation Treaty.The present treaty is of of 1947
    Government of Pakistan had entered an agreement with Government of India taxation treaty vide Notification No 1 dated 10th December,1947 and a limited agreement in respect of Air Transport vide Notification SRO no 146 (I)/89 dated 18th Febuary,1989.
    Even otherwise the taxation agreement with India are very old and do not cater to a number of sectors/areas that modern Avoidance of Double Taxation Agreements that both countries are execution.
    An area of urgent intervention should be that both countries should enter into negotiations to execute Avoidance of Double Taxation Agreement. For enhanced trade, commerce and investments such an agreement is very important.

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  • Nasir
    Jul 27, 2012 - 12:33PM

    @Rajendra Rana:
    Then why India is afraid of reducing NTB on Pakistani goods.

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  • GhostRider
    Jul 27, 2012 - 12:58PM

    @Rajendra Rana:
    India does…accept it

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  • Yuri Kondratyuk
    Jul 27, 2012 - 1:18PM

    If you want to fill the pot, first plug the hole.

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  • ashvinn
    Jul 27, 2012 - 1:38PM

    @Nasir:
    lol we dont care is what Rana saying…….why dont you sell your goods to your startegic assests or maybe to your higher then mountains and deeper then oceans friend.

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  • ashvinn
    Jul 27, 2012 - 1:39PM

    @GhostRider:
    what do we accept, you mean trade with Pakistan, we will only trade if we get benifit out of it after all we are banias of the world, go sell your goods to your muslim ummah

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  • Gratgy
    Jul 27, 2012 - 2:29PM

    We should remove the MFN given to Pakistan the same way the Pakistan does not give MFN to India. That should make it a level playing field. Non Tariff barriers are not Pakistan specefic, why can’t Pakistan compete instead of demanding trade concessions??

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  • Hegdefunder
    Jul 27, 2012 - 3:15PM

    @ashvinn:
    what do we accept, you mean trade with Pakistan, we will only trade if we get benifit out of it after all we are banias of the world, go sell your goods to your muslim ummah

    Because that friend is unlikely to pay Cash, as they would suggest that they take it off the bill owed to them first!
    Secondly that friend really does not rate Pakistani goods with any significance, apart from perhaps agro products as they themselves are masters of any manufactured goods !

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  • Arya
    Jul 27, 2012 - 6:12PM

    For India, the Dubai route will always remain the best option!

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  • gp65
    Jul 27, 2012 - 8:25PM

    @Nasir: “@Rajendra Rana:
    Then why India is afraid of reducing NTB on Pakistani goods.”

    India does not have non tariff barriers on Pakistani goods. India’s non-tariff barriers are there for ALL countries exporting to India. This is permissible under WTO. But Pakistan has Indi specific trade barriers which is ot permissible under WTO. India had given MFN to Pakistan from 1996. Pakistan agreed to give India MFN and in return India lifted its objections to the Euro trade deal for Pakistan which it had the ability to block through WTO because India’s own textiles were adversely affected. Pakistan took the benefit but is now dragging its feet when it comes to reciprocating.

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  • Hasan
    Jul 27, 2012 - 8:54PM

    India can drag Pak nose to WTO anytime as Pak is in blatant violation of WTO rules. As a signatory, it is mandatory for Pak to provide MFN to reciprocating countries. There is no second question asked. The NTB from India is for all countries around the world, and Pak is no exception. WTO prevents country specific barriers, as well as country specific relaxation. Did we forget how we begged India and Bangladesh to help us get WTO waiver for EU exports? Ss bunch of immoral, ungrateful, opportunists, we even fail to grant MFN after 17 years. Shame.

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