Open­ing New Doors

Enterprise - - Editor’s Desk -

The quest for a thaw in re­la­tions be­tween In­dia and Pak­istan, which has so far turned out to be noth­ing more than an elu­sive dream, has re­ceived a shot in the arm with the an­nounce­ment by Pak­istan that it will grant MFN sta­tus to In­dia. It would be worth­while to re­mem­ber that In­dia had ex­tended a sim­i­lar sta­tus to Pak­istan some 15 years back. The re­cip­ro­cal de­ci­sion from Pak­istan was ap­par­ently de­layed for so long as there was dis­agree­ment on var­i­ous non-tar­iff and tar­iff bar­ri­ers. Pak­istan was also said to have not granted MFN sta­tus to In­dia as it had been ac­cused of vi­o­lat­ing cer­tain trade guide­lines laid down by the World Trade Or­gan­i­sa­tion.

In in­ter­na­tional eco­nomic re­la­tions, the most favoured na­tion (MFN) sta­tus comes into play when a coun­try re­ceives equal trade ad­van­tages as the “most favoured na­tion” by the coun­try grant­ing such ben­e­fits. Such trade ad­van­tages can in­clude low tar­iffs or high im­port quo­tas. The coun­try ac­corded MFN sta­tus is, as such, not treated less ad­van­ta­geously than any other coun­try given MFN sta­tus by the grant­ing coun­try.

In the re­cent past, Is­lam­abad has ex­tended con­ces­sions to imports from In­dia by adding items to the ex­ist­ing ‘pos­i­tive’ list of trade items. It needs to be em­pha­sized, how­ever, that ev­ery coun­try has its own in­ter­ests to pro­tect and Pak­istan also has a neg­a­tive list of items that can­not be im­ported from In­dia in or­der to pro­tect do­mes­tic trade in­ter­ests, such as tex­tile goods. It is com­mend­able that in its best eco­nomic in­ter­ests, Pak­istan’s grant­ing the Most Favoured Na­tion sta­tus to In­dia will greatly en­hance bi­lat­eral trade, which is about $2.7 bil­lion per an­num cur­rently and has the po­ten­tial of be­ing greatly ex­panded in the near fu­ture.

It is un­der­stood that In­dia is will­ing to not op­pose tar­iff con­ces­sions for Pak­istani ex­porters in the Euro­pean mar­ket. It is this new ap­proach of give-and-take that seems to have also en­cour­aged Pak­istani busi­ness­men to soften their old po­si­tion on the MFN sta­tus for In­dia. It is be­ing said though that the neg­a­tive list be­ing pre­pared by the Pak­istani Com­merce Min­istry on imports from In­dia could prove to be a hur­dle in the newly de­vel­op­ing trade re­la­tion­ship. The time has come for Pak­istan to re­al­ize that in to­day’s com­pet­i­tive and prag­matic eco­nomic sce­nario, old mind­sets need to change and a more re­al­is­tic and proac­tive ap­proach adopted if the na­tion de­sires to make its eco­nomic pres­ence felt on a re­gional and global scale.

It is also grat­i­fy­ing that while an­nounc­ing the new de­vel­op­ment, For­eign Min­is­ter Hina Rab­bani Khar has sought to de-link the sub­ject of MFN sta­tus for In­dia from some other long-stand­ing is­sues be­tween the two coun­tries. She has re­it­er­ated Pak­istan`s stance on hold­ing a plebiscite in Kash­mir. It is hoped that af­ter years of go­ing around in cir­cles, the two na­tions will now se­ri­ously move to­wards build­ing a re­la­tion­ship based on mu­tual eco­nomic in­ter­ests and that the lat­est move on part of Pak­istan will open doors to other ar­eas of mu­tual and con­struc­tive co­op­er­a­tion

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