The federal government has decided to hold a debate on Pak-India trade liberalisation in parliament only after the cabinet gives approval and India dismantles barriers, a move aimed at avoiding wider public attention and the criticism it could provoke.
A policy statement on trade liberalisation with India could not be given in parliament unless something concrete came out to share with the parliamentarians, said a senior official of the Ministry of Commerce in background interaction with the media.
The interaction is part of government’s efforts to take all stakeholders into confidence before the cabinet gives the go-ahead for bringing trade relations with the archrival to complete normalcy.
According to the official, the debate in parliament has been linked with approval of a trade deal by the cabinet, which will soon consider a summary of the Ministry of Commerce.
The prime minister had been informed that commercial competitive advantage of Pakistan had been taken care of and the federal cabinet may take a decision, said the official.
As a policy, the government has been avoiding publicity of the trade normalisation process and is not showing any enthusiasm. The premier has also stopped one of his aides from giving any statement until the deal is struck.
The official said India had indicated that it would accommodate Pakistan’s trade interests and allow the trade of goods in which Pakistan had a competitive advantage. It has been told to Indian Commerce Minister Anand Sharma that Pakistan’s top export items should not be placed in the Islamabad-specific sensitive list that India maintains under the South Asia Free Trade Agreement (Safta).
Furthermore, Delhi would charge preferential duties on the export of these items within six months against an earlier agreement to reduce the duties over a period of three years, the official said.
India had hinted at accepting both the demands and these changes would be made through a notification, he added.
At present, 95% of major export goods of Pakistan are covered among 614 items that India has protected through the sensitive list.
“It is the best deal that any Indian government can offer and now the question is should we accept it or wait for the new Indian government to come despite the fact the present offer is lucrative and protects our interests,” he added.
Pakistan and India would not sign any new agreement, the official declared. Instead, the leftover parts of the September 2012 agreement will be implemented. “Now it’s our turn. Under the agreement, Pakistan is supposed to open Wagah border and allow movement of containerised goods across the border.”
He said China had also suggested that until Pakistan was economically strong it could not overcome other problems. “Pakistan’s outstanding strategic issues cannot be resolved until it is internally strong.”
Pakistan would also open other borders for trade with India but the problem was that the country had not yet established Land Port Authority, he added.
The official did not rule out the possibility of reversing some of the decisions by the next Indian government. It will be the sovereign right of the new government which items it wants to keep in the sensitive list.
Pakistan has also decided to trade-off benefits that consumers will get from trade liberalisation by protecting job-intensive but politically well-connected local industries, living up to its reputation of a business-friendly government.
“There is a difficult trade-off between protecting consumer interests and protecting the industries giving jobs to thousands of people. The government has decided to protect finished automobile and pharmaceutical sectors,” he added.
Published in The Express Tribune, March 20th, 2014.
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