Better Indo-Pak trade ties remain as elusive as ever

As New Delhi drags its feet, Foreign Office places moratorium on further efforts.

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 27^th, 2012.