MFN Status for India
*Dr. Ahmad Rashid Malik
There was not a unanimous viewpoint prevailing on the issue of granting the Most Favored Nation (MFN) status to India among different stakeholders but the Federal Cabinet approved the MFN status for India on 2 November encompassing a 20 percent reduction on 233 tariff lines in the sensitive list. The MFN status yet has to get approval of the Parliament. Atussle has appeared. For all counts, it would be detrimental to Pakistan's interests to grant the MFN to India. This was for the first time that talks about granting the MFN status to India have come up from the Government circle. Hitherto, Government leaders strongly objected grating such a status to India including the previous regime for outstanding reasons. This time, however, in a surprising move, Foreign Minister Hina Rabbani Khar clearly hinted out at the Parliament on 12October to bestowMFNstatus to India. She did not make a detailed, critical, and logical review of the offer, however. Earlier, Commerce Minister Makhdoom Amin Fahim indicated that there was a strong opinion in Pakistan that India should be given the MFNstatus during his visit to India in September (2011). It appears that the decision was taken in haste and with less discussion. Many business and political circles have organized protests and criticized the Government of granting MFN status to India by calling for the withdrawal of MFN status forthwith. Parliamentary approval has to be taken yet. They viewed that the Government has to revisit its decision of granting MFN status to India. TheMFNstatus for India came in return after lifting nontariff restrictions on imports from Pakistan. The visit of Commerce Minister to India was another reason. Thinking that the core issue would be resolved after bestowing MFN status to India looks premature. Core issues such as the Kashmir dispute, water distribution, Siachin, and Sir Greek should come all the way first to ride on a free trade drive in SouthAsia. Some circles view this offer by Pakistan in the backdrop of the Pakistan-US fast deteriorating relations where US is backing India. Pakistan may like to attract India by luring it with a MFN status. Others will consider a positive offer by Pakistan to achievemore common goals of trade in the region. Supporting India's stance, critics view that bourgeoning Indian economy and its influence over America, European, and Chinese economy has been compelling Pakistan to enhance its stakes in the Indian market. This would also show a moderate stance of Pakistan toward India. The conservative school views India's position by stating that India has not moved back a single inch on various issues where core issue is Kashmir and why Pakistan is offering such a status to India. They view a complete confusion over Pakistan's policy toward India. Kashmiris inside Jammu and Kashmir and diaspora in the United Kingdom have launched rallies against the decision of granting MFN status to India. Kashmiris are of view that grating of MFN status to India is equal to stabbing in the back of Kashmir freedom movement and negating the ideology of Pakistan and policy of the founding father of the country Quaid-e- Azam Muhammad Ali Jinnah. They think that the move would adversely affect the Kashmiri peoples' struggle for their right to self-determination and would cause irreparable damage to Kashmir's struggle for right to selfdetermination. These public sentiments should not be bypassed. Pakistan must see the MFN status in the Kashmir perspective. Bilateral trade could be highly risky in view of any eventuality of thekashmir situation. So economic liberalism cannot work in view of political oppression inside Kashmir, which is main concern for Pakistan. A liberal market is thus vulnerable to political backlash overkashmir and other issues. The free trade school views not to mix up politics with the economy and let economic forces to play their role. This would also lead to decrease political tension and helps resolve problems. They say that countries can enhance economic stakes without hurting their political stances. At the moment, Pakistan-india bilateral trade is being carried out on the basis of Positive List that allowed the import and export of commodities between the two nations. The list has increased over the years by including more items for trading purposes. India granted MFN status to Pakistan in 1995. The foremost incentive was that MFN would increase exports of Pakistan to India. Reality is, however, otherwise. Recently Pakistan exported goods worth of US$ 287 millionwhile exported Indian goods worth US$ 1.5 billion. Indian goods will further flood into Pakistani markets and ruin local manufactures who are facing, inter alia, electricity and gas shortages. Pakistan Economywatch (PEW) reported that local industrialists held the view that granting of MFN status to India will damage local value-added textile sector, which is providing jobs to millions and contributing more than any other sector to the export earnings. Pakistan should focus on improving its textile industry. There are non-tariff issues and many other trade barriers elected on Pakistan's exports to India. These situations make Pakistan's exports expensive and restrictive to the Indian market. They must be resolved first such issues before considering mfns tatus for India.