MFN status to India: Commerce secretary dispels ambiguities

Official assures business community of level playing field, barriers against dumping.

KARACHI:

Dispelling all ambiguities, Federal Secretary Commerce Zafar Mehmood has said that Pakistan has reciprocated most favoured nation (MFN) to India in principle to implement the declaration in letter and spirit signed by commerce ministers of India and Pakistan few weeks ago in India.

“There must be no ambiguity. MFN means that Pakistan will not discriminate India in trade,” Mehmood cautiously said on Thursday at the start of his speech to businesspersons at Karachi Chamber of Commerce and Industry (KCCI).

When Pakistan and India became part of World Trade Organisation (WTO) in 1995, Pakistan automatically got MFN status from India. “Pakistan did not reciprocate MFN to India and according to WTO laws, Pakistan did discriminate against India,” Mehmood admitted.

India and Pakistan had signed a declaration a few weeks ago in which both countries agreed to completely remove all irritants in bilateral trade including non-tariff barriers and visa issues. “Pakistan will implement the declaration in letter and spirit,” he vowed.

Shedding light on the importance of this declaration, he said, after the Mumbai carnage both countries have learnt some lessons and therefore both have agreed to make present talks uninterruptible and irreversible.

Assuring the local industry, Mehmood said that the government has taken all the chambers of commerce in the country onboard to discuss the reservations of the local industry on opening up trade with India.

“We need to look whether our reservations are based on reality or on fears and assumptions,” he said, “At the same time I assure that if any of our industry affects from this trade, we have always an option to put dumping duties on Indian products.”

“We are analysing what Indian exports are and whether they can dump those products in Pakistan or not,” he added.

Touching another important issue, Mehmood said, “Pakistan is preparing a negative list for some industries that we feel are nascent and need protection. We will first protect our industry which is any country’s right even after granting MFN status.”

Although negative lists are against WTO laws when one country grants MFN status to another, even then to protect our industry, we will prepare a negative list, he assured the industry.

He also said that Pakistan and India have agreed to take similar positions in WTO to protect their interests. Similarly, in the upcoming WTO session on November 7, 2011, India will support Pakistan after which Pakistan will get the European Union duty package that it had asked for after the 2010 floods.

Mehmood also said that trade between Pakistan and India will be most beneficial for consumers who will get cheap products. “Pakistan is hopeful to get GSP plus status by 2013 for which we have lobbied,” he added.

KCCI President Mian Abrar Ahmed said that Pakistan should have granted MFN to India 10 years ago. “We need to understand that trade with neighbouring India is better than taking international aid to run country,” he said.

Sindh Board of Investment Chairman Zubair Motiwala said that non-tariff barriers, visa issues and equal level playing field for all are the top concerns of Pakistan businessmen.

Published in The Express Tribune, November 4^th,  2011.