Trading off

The fact that the India-Pakistan dialogue has resurfaced on a strong footing after the uncertainty of the recent past is a comforting development. Now that the secretaries of commerce from both countries have met in Islamabad, it is hoped that the only way to go for mutually beneficial economic and trade progress is up.These first trade talks since 2008 have the potential of introducing a new era of liberalisation of trade between the two countries, boosting trade to a potential $ 6.5 billion from its present level of just above $ 1.5 billion. The two sides have agreed to open up branches of private banks in each other’s countries, resurrect the goods train agreement whereby a specific number of freight trains from and to both countries would be run, increase business visas, open more trade routes besides the one at Wagah — where a feeble amount of trade occurs via the age-old system of coolies — and promote intra-Kashmir trade through the Line of Control.

However, the most promising development at this meeting was the reiteration by both delegations that non-tariff barriers ought to be removed to make such bilateral cooperation successful.Non-tariff barriers are usually non-economic political in origin, unlike tariff barriers such as duties, etc. One major non-tariff barrier has been the unwillingness of Pakistan to reciprocate India’s Most Favoured Nation (MFN) status, accorded to Pakistan by India since 1994. Pakistan has been holding back for political reasons such as the Kashmir issue, amongst others. However, the dynamics of quid pro quo seem to be at work here as Islamabad has asked India to halt its opposition to Pakistan gaining increased access to the EU’s markets in discussions at the WTO. Apart from enhanced trade, investment, whether as joint ventures or opening up to each other’s entrepreneurs, needs to be encouraged to mutual benefit. But for that, trust must be strengthened between these two sometimes caustic neighbours.Politics has been restricting trade for too long. No matter what the different lobbies in Pakistan say, from holding back on Kashmir to the fear of Indian goods swamping our markets, trade needs to be strengthened and mutual economic opportunities explored. It is hoped these talks will lead to all this and more. – Dailytimes