ISLAMABAD:
Pakistan has asked India to sign three pacts to ensure level playing field for its exporters before implementing free trade regime, as Islamabad decides to ensure “effective protection” for local industries against threats of Indian products capturing Pakistani markets.
Taking parliamentarians into confidence for the first time since the government’s in-principle decision to grant Most-Favoured Nation status to India, Zafar Mahmood Secretary Commerce said on Thursday that Pakistan would not implement the free trade regime without ensuring level playing field for its exporters.
He was briefing the Senate Standing Committee on Commerce about the MFN status to India.
Islamabad has proposed three agreements be signed with New Delhi. The first is the Customs Cooperation Agreement to address Pakistani exporters’ complaints of Indians charging high taxes, Mutual Recognition Agreement for standardisation of quality standards and Grievances Agreements to address consumer protection issues, said Mahmood.
He said the demand was made after exporters complained about Indian non-tariff barriers which could hinder trade. He however, said “there are no Pakistan-specific non-tariff barriers but India is strict in applying (quality control) standards”.
After complaints of non-tariff barriers, New Delhi asked Islamabad to come up with Pakistan-specific non-tariff barriers and the Industry said that the Indian Customs delay clearance of Pakistani goods, cause dispute over valuation of goods for determination of duties, strictly apply Indian standardization laws and charge composite tariffs on textile products, said Zafar Mahmood.
Mahmood said India would respond after consultations at the ministerial level.
In September this year Pakistan decided to replace trade-able list, known as positive list currently comprising 1,958 items, with non-trade-able list, known as Negative list, by February 2012. He said Industry has proposed to add 600 items to the negative list.
Mahmood said due to application of positive list Pakistan is losing $300 million to $700 million annually. “Timing of phasing out negative list will be determined in February and the Ministry of Commerce will not take anything to cabinet unless it ensures effective protection to local industry during the interim period”, he added.
Before announcing to phase out negative list the government should take input from those industries that would be immediately exposed to competition, said Senator Ishaq Dar.
“Trust deficit within Pakistan is ten times more than trust deficit between India and Pakistan. We will take forward the process of free trade regime by protecting industries,” said Mahmood.
In 1996 India removed restrictive regime and gave Pakistan MFN status and since then it has remained subject of immense debate based on political considerations rather than purely on trade and economics.
India did not contest MFN status in WTO providing an opportunity to Pakistan to walk away despite violation of international trade laws. “Had India gone to the WTO, it would have embarrassed Pakistan”, said Mahmood.
In case Pakistan grants MFN, Indian exports would immediately increase due to legalization of illegal Indian imports to Pakistan, said Mahmood. Currently, the trade is in favour of India as Pakistan’s exports to New Delhi are $264 million against imports of $1.7 billion.
The MFN would be in benefit of India and there will be replication of China syndrome, said Senator Haroon Akhtar of PML.
Published in The Express Tribune, December 23rd, 2011.
COMMENTS (20)
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PAKISTAN AND INDIA ZINDBAD
@India,
Thats not the definition of competency , effectiveness etc, its all about the cheating, using illegal means like cowards.............
@Quack: cause damage to Pakistan by bringing in treaties and forces that will work against the very interest of Pakistan – examples are: Water, Kashmir, MFN, Indian lobby against Pakistan that promoted drones, Causing terrorism through Afghan soil, going after Pakistan’s nuclear assets bad mouthing Pakistan anywhere, everywhere and internationally to form Indian allies, etc, etc, etc.
Oh you flatterer! Thank you, for the kind comments. We certainly wish just half of what you said were true -- that would be mean we're being righteous, competent, effective and powerful.
Pakistan's always talk about being treated with respect -- well honoring treaties (including IMF) is one of those requirements to gain respect. You have a reputation of being a duplicitous country and it's time to work on that image.
The relationship between India and Pakistan lacks trust most of all. Any business relationship that can undermine Pakistan's balance of trade in favour of India is being brainless and shortsighted. India has to earn its trust with Pakistan first by resolving old issues and not demanding new future benefits and favours from Pakistan.
@Show:
"India is poorer that Pakistan but India is still a larger country resulting is better economies of scale ."
No it is not. So says the UN.
http://www.un.org/millenniumgoals/MDG2011AsiaEN.pdf
Only Pakistan is not growing in entire South Asia.
"I thought India was a supper power why ban foreign super markets ? "
http://www.metro.co.in/
I will not waste my time explaining more than this. The above site is of a Retail shop from Netherlands set shop in India for a long time. I am pretty sure you read something related to the recent retail bill in India and did not have the required intelligence to really understand what it really meant. So, no use talking about it to you.
India is a big bull. But, that doesn't make it a bully. Only an idiot would not want to recognize it.
@BruteForce: Can you even read Urdu ? Perhaps you confuse urdu newspapers with shiv senu papers India is poorer that Pakistan but India is still a larger country resulting is better economies of scale . It's not in Pakistan trade interest to allow cheap Indian imports undermining already electricity short industry
I thought India was a supper power why ban foreign super markets ? They exist in Pakistan Pakistan never claims to be a super power it's paranoid India scared of small Pakistan and always bullying
Well it all depends on the cost of production.Which in addition to technology includes, power tariffs,power supply consistency and taxes which are beyond control of the producers.Then we say Pakistani producers are inefficient. Controversial isn't it?
Will this “level playing field” will be available to Pakistani industry with China too? Are similar arrangements (Like consumer protection) worked out with China?
Chinese industry is much bigger then India and much more subsidised by state. It is these category that will/has wiped out local industry in Pakistan!
Hey come on India is a poor Country, according to your Urdu newspapers. How can it challenge a missile and nuke power like Pakistan?
Better technology translates to cheaper goods, right?
If you are scared of Indian competition it only means that you dont believe the lies that you tell yourselves.
@Blunt - Nothing can embarrass Pakistan any anymore. The biggest embarrassment is it not being able to stand up strong for justice for its own people, water rights and the rights of Kasmiri people in front of the UN. MFN status to India is more or less irrelevant issue compared to the injustices the Pakistani people are facing these days and the MFN issue should take its own time with scrutiny and not rushed at all just like all other issues that India seems to throw in the back burner that are relevant to Pakistan.
@Ava: China has already done that, so we are not interested in beating the deadmeat..
India did not have any issues in granting MFN status to Pakistan long back in 1996 for it believed in the competence of its producers & quality goods.
However, since the time Pakistan has granted the MFN to India, there have been numerous debates on rollbacks, signing new action items to protect the local industries & wot not!
Protection for local industry are necessary but that does not mean MFN status should be called off.Pakistanis will have to compete.
People have to understand the meaning of MFN under WTO .All it means is non discriminatory treatment.
Pakistan should grant MFN to India.If goods at cheaper price come in,people will benefit.
As it is goods from India come through transshipment from Dubai.Just look at volume of imports from Dubai which hardly has any manufacturing industries. FBR wake up.....please
No no, there should be protection of Pakistani goods and industry from India. They will just dump their crap in Pakistan and demand money.
Indian Customs delay clearance of Pakistani goods, cause dispute over valuation of goods for determination of duties, strictly apply Indian standardization laws and charge composite tariffs on textile products, said Zafar Mahmood.
Isn't that the law? Is Zafar saying that Pakistan Customs don't challenge goods that are under-invoiced to evade customs or apply standards laws or the full applicable tariffs on textiles?
It's funny how the liberal media is in complete silence about MFN dangers the facts are clear pak exports where 18% down last year to India whilst 9% up globally India bans foriegn super markets yet the western elite in pakistan want to appease India