Free trade or not?: Negative list restricts MFN benefits, says commerce secretary

Mehmood says local industry to be protected.

KARACHI:

Secretary Commerce Zafar Mehmood has said in the presence of a negative trade list, India cannot be called a most-favoured nation (MFN) in practical terms.

Talking to the media at the Trade Development Authority’s office here on Tuesday, Mehmood said the negative list would be prepared in such a way that would provide protection to domestic industries which had reservations about the grant of MFN status to India.

He said the commerce ministry was holding consultations with the associations of industries and exporters and the negative list was being prepared in the light of fears and reservations expressed by the industry. “Draft of the negative list will be presented to the cabinet by February 2012,” he said.

According to Mehmood, the Generalised Agreement on Tariff and Trade (GATT) bound Pakistan to trade with all member countries without any discrimination. In addition to this, Pakistan as a member of the World Trade Organisation (WTO) is also responsible to provide equal trade opportunities to WTO members.

He recalled Pakistan had earlier given India the MFN status from 1947 to 1965 and this continued even during the Kashmir war. During this period, trade between the two countries continued through various land routes including two in Sindh.

For timber trade, the land route was in Punjab while there were also other routes.

He pointed out traders of the two countries had a trust deficit and confidence-building measures would take some time to play an effective role.

He said the MFN status was neither a title nor an award and it would not affect other issues between the two countries in any way. “Despite granting India the MFN status, we can talk about resolving all issues including Kashmir and Siachin,” he said.

He underscored the importance of media, saying it could play a vital role in overcoming psychological barriers hindering the two-way trade.

He said India could prove a big market for Pakistani products, but exporters should be aware of opportunities.

The commerce ministry has prepared a programme for the exporters in which they will be informed about the potential of the Indian market, trade rules and regulations and quality and hygiene standards.

The Trade Development Authority will also hold seminars in the country’s big cities, where the industry will be briefed about competition with India, preparing them to compete well with industries of the neighbouring country.

Published in The Express Tribune, November 23^rd, 2011.