Bad old habits
We stand to lose far more by negotiating in bad faith than New Delhi would. It is time to change our tactics.
We stand to lose far more by negotiating in bad faith than New Delhi would. It is time to change our tactics. ILLUSTRATION: JAMAL KHURSHID.
When it comes to trade negotiations between India and Pakistan, both governments are clearly at fault. New Delhi refuses to reduce its non-tariff barriers to trade, while Islamabad appears unwilling to delink trade negotiations from the more thorny political disputes between the two countries. Having said that, when it comes to trade negotiations, there is clearly a lot more that the Pakistani government can be doing to encourage progress on the Indian side of the border.
First and foremost, Islamabad should keep its word and grant most-favoured nation (MFN) status to India. This simply means that Pakistan pledges not to discriminate against goods and services originating in India. Linking MFN status to non-tariff barriers, which India imposes on all countries, not just Pakistan, seems largely unfair, especially when New Delhi gave Pakistan MFN status in 1996. This is not to suggest, of course, that non-tariff barriers in India are not a problem. Far from it, New Delhi is clearly one of the worst abusers of non-tariff barriers to trade and Pakistani negotiators are right to focus on them as a sticking point during trade talks. Having said that, linking non-tariff barriers to MFN is a bad strategy that will only hurt the Pakistani economy. A far better strategy would be to focus on trade barrier (tariff and non-tariff) concessions that would be the most valuable to it.
We would suggest starting off with food and agricultural commodities. Planting seasons in India and Pakistan tend to be complementary for several food items, and liberalising trade between the two countries would serve to both stabilise and lower food prices on both sides of the border. Such a concession may even be easier to gain, since Indian negotiators have indicated an interest in freer trade in food. A lack of trade across the Wagah hurts Pakistan far more than India. We stand to lose far more by negotiating in bad faith than New Delhi would. It is time to change our tactics.
Published in The Express Tribune, January 5th, 2014.
First and foremost, Islamabad should keep its word and grant most-favoured nation (MFN) status to India. This simply means that Pakistan pledges not to discriminate against goods and services originating in India. Linking MFN status to non-tariff barriers, which India imposes on all countries, not just Pakistan, seems largely unfair, especially when New Delhi gave Pakistan MFN status in 1996. This is not to suggest, of course, that non-tariff barriers in India are not a problem. Far from it, New Delhi is clearly one of the worst abusers of non-tariff barriers to trade and Pakistani negotiators are right to focus on them as a sticking point during trade talks. Having said that, linking non-tariff barriers to MFN is a bad strategy that will only hurt the Pakistani economy. A far better strategy would be to focus on trade barrier (tariff and non-tariff) concessions that would be the most valuable to it.
We would suggest starting off with food and agricultural commodities. Planting seasons in India and Pakistan tend to be complementary for several food items, and liberalising trade between the two countries would serve to both stabilise and lower food prices on both sides of the border. Such a concession may even be easier to gain, since Indian negotiators have indicated an interest in freer trade in food. A lack of trade across the Wagah hurts Pakistan far more than India. We stand to lose far more by negotiating in bad faith than New Delhi would. It is time to change our tactics.
Published in The Express Tribune, January 5th, 2014.