Free trade and the MFN

Published: November 13, 2011
The writer is a syndicated columnist and a former member of India’s Rajya Sabha

The writer is a syndicated columnist and a former member of India’s Rajya Sabha

Pakistan envoy Shahid Malik, who has served the longest at New Delhi, appreciates India’s sensibilities. Years of staying in the country have taught him that very few windows open in sombre relations between the two countries. But whenever there is even a small aperture, it should be used fully. Therefore, Malik was quick to remove the misunderstanding on Pakistan’s decision to extend the Most Favoured Nation (MFN) status to India. The impression on the Indian end was that Pakistan was dragging its feet after announcing the MFN status. He said that “there is no question of a U-turn about it”. Prime Minister Yousaf Raza Gilani, too, reiterated the same assurance that the respective ministries have been asked to give concrete shape to the process. People in India should not think that Pakistan is going back on its announcement. The MFN status has been long overdue. Under the WTO commitment, every country has to give it. India extended the status to Pakistan in 1995.

Since MFN was missing at the other end, both could not dismantle non-tariff barriers to facilitate trade. Pakistan was not cooperative. Every time the question of trade was initiated by India, Pakistan brought in Kashmir. I believe that many Pakistan ministers expressed similar kind of fears when the proposal came before their cabinet. The Pakistani commerce secretary’s categorical statement that the Kashmir question would not be diluted allayed their fears. The same thing happened in the case of the media. The government had to say that the army was also on board. The real problem is how to go ahead. The MFN is only the means, not the end by itself. I do not envisage free trade of all goods straightaway. That may take place in due course. Much depends on Pakistan and how its government wants to go about it. Ultimately, it will be the bigger beneficiary. Some concessions will be in order because compared to Pakistan, India is a developed country. For a level playing field, New Delhi may have to take some steps which would make Pakistan feel that it is not under any disadvantage. New Delhi’s initiative may have a salutary effect on relations between India and Pakistan. Both will no doubt increase their trade and give a fillip to manufacturing, so as to cater to new demands. Yet the basic part is that the two may begin to trust each other. Both countries should get hold of the old files. Between 1947 and 1965, there was free trade. So much so that newspapers of Pakistan were sold on the streets of Mumbai and Delhi on the same day as the Indian papers would be in Karachi and Lahore. Both countries know that trade between the two countries is taking place through Dubai and Singapore. It is reported to be worth around $2.5 billion. The MFN status also means that the goods will go across the border in no time. The road from Lahore to Wagah has been widened. India is putting up a huge building to house customs and immigration departments. There is, however, a case for having more points of trade then. The Wagah-Attari border is what comes to people’s mind. But Sialkot-Suchetgarh on the Jammu border is equally suitable for the transit of goods. Trade between the two parts of Kashmir is there but it needs to be pushed more vigorously.

My dream is of free trade for the entire South Asian region. One day we should be able to have an economic union along the lines of Europe. This looks far-fetched at present, however, after nearly 16 years, if MFN can become a reality, why not another economic union? This will require concessions in visa facilities. All the nations in the region should discuss how a single visa can enable a person to travel throughout the region. Because that is what Europe has done to give meaning to trade among the countries. Pro-peace activists on both sides have never given up their efforts to bring the two countries closer and the result is the MFN.

Published in The Express Tribune, November 14th,  2011.

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Reader Comments (13)

  • You Said It
    Nov 13, 2011 - 10:21PM

    Pro-peace activists on both sides have never given up their efforts to bring the two countries closer and the result is the MFN.
    This is incredibly self-congratulating and hallucinatory. The MFN did not come about due to peaceniks who have been harping for better relations for decades without anyone giving a hoot. It came about because Pakistani growth rate has plummeted and neither the US nor China is willing to throw it a lifeline. So the security establishment has woken up to the need to generate new resources and expand trade.

    The peaceniks make no difference on the ground in Indo-Pak relations and all the so-called people-people contacts is just an excuse for NGO activists to travel and run up airline miles at someone else’s expense, while hearing themselves talk.

    To all the peace activists: give us a break and get a real job.


  • Nov 13, 2011 - 10:52PM

    Mr K.Nayar,Do you know what happens when you put cart before the horse?Things go backward,that’s right,backwards.The attitude change you see in Pakistan,is due to the change in tune in Wasington D.C.,if you did not pay attension to it after 2nd may,it is not some one else fault,it is your own.Pakistan has now understood there is no’ maibaap’ and free lunch coming from USA,if Obama loses ,wait things will get tougher for Pakistan .If things get tougher for Pakistan,alha courtsey of new Republican ,who are are more pro India than Dems.China,did not bite,Pakistan all weather friendship c*p,hence they had no option left,Congress is going to face tough time next election courtsey scams and poor leadership of MMS and pottential for fresh terrorism,hence since there are no arrows in the quiver of congress,only minority appeasement, is fainning friendship with Pakistan,which suits New Delhi,nothing will come of it,especially if Pakistan can by some miracle hold home grown and Kashmir terrorist at bay for a while untill Delhi high court bombing and Mumbai fades from fickle minded Indian voters,these are the calculation in cynical Delhi congress political minds,anyway nothing moves in India,normally,so Do not hold your breath.It has been 64 years of unproductive relationship,another 5 years is no sweat of the nose of either party.So relax,Chau,Ta-Ta.!Goodday,I’m sure you not like my comment.Recommend

  • rehmat
    Nov 13, 2011 - 11:06PM

    With funds received from Gai, it is clear where your sympathies lie. For 16 years Pakistan refused to reciprocate MFN syatus to India and even now it is dragging its feet – despite any statements to the contrary. When this happens the two countries would finally be at a level playing field after 16 years and you want to push for additional benefits to Pakistan already. Why?


  • Ali Tanoli
    Nov 13, 2011 - 11:09PM

    Like allways Mr Kuldip very well said it sir.


  • Max
    Nov 13, 2011 - 11:11PM

    I echo your well wishes and glad that you did not forget Sialkot. Apprehensions will be there and on both sides but time will come when we will live like good neighbors.
    Thanks for your insight.


  • MD
    Nov 13, 2011 - 11:43PM

    @You Said It,
    You said it all.


  • Babloo
    Nov 13, 2011 - 11:47PM

    @yOu said it,
    You are absolutely right. The so called reciprocal MFN status, 15 years later, is yet to materialize. The peaceniks are actually a problem in Indo-Pak relations, who want to paper of stark truths. The softening of Pakistan, from its imbecile, recalcitrant position towards India has come because the army ( for what ever reason ) allowed it. The army/ISI, who are real masters of Pakistan, can change there minds any time based on what best serves to perpetuate army/isi interests.


  • antanu
    Nov 14, 2011 - 1:40PM

    What do you want to say that since there is always a risk of accident…do not go out on street.Its pessimism of the worst kind.Life is all about looking forward. Looking backward is only to learn lessons from mistakes.


  • Kafka
    Nov 14, 2011 - 2:35PM

    There is not even a single Pakistani to comment on this. Don’t Indians have quality newspaper websites to give vent to their feelings? Or they take pains at “educating” Pakistanis !!!!! well thanks for that.


  • Ali
    Nov 14, 2011 - 3:03PM

    Why do people always forget Munnabao – Khokrapar border between Sindh and Rajhastan? This one also needs to be re-opened for goods and trade to/from Karachi and Gujerat, Mumbai etc.


  • adnan
    Nov 14, 2011 - 4:55PM

    i as a pakistani will love to see this happen.v cant change our neighbours so v should learn to live with peace.and peace and trade brings prosperity


  • rehmat
    Nov 14, 2011 - 6:19PM

    “There is not even a single Pakistani to comment on this”.

    There were 8 comments before you – 3 of which were by Pakistanis (Max, antanu, Ali Tanoli).
    Indians such as myself have been reading and commenting on Pakistani blogs since 26/11 because we wanted to understand the reasons for the blind hatred towards India. This is also the reason that when we see outright factual errors we speak up.

  • Paras Vikmani
    Nov 14, 2011 - 7:17PM

    Dear Author
    You want South Asia to be like Europe!
    Look at the state of affairs in Europe now!


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