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Broad rules to govern Pak-India free trade urged

The News International, Pakistan

Broad rules to govern Pak-India free trade urged

By Mansoor Ahmad

10 February 2013

LAHORE: Trade and industry in favour of free trade has pleaded with the government to ensure well-defined rules of engagement with Indian government and advised the bureaucracy to do its homework and examine trade factsheet before making any commitment one way or another.

“Granting most-favored nation status to India at this stage will totally benefit India, while Pakistan as the things stand today will not get any additional market access to the Indian markets,” said President Lahore Chamber of Commerce and Industry Farooq Iftikhar. He said economists and politicians who are showing rosy picture to local trade and industry of getting access to 1.2 billion Indian market are either unaware of the facts or fooling them. “Officially, Pakistan has been enjoying full access to Indian markets ever since it was granted MFN status by Indian government more than a decade ago,” he said adding that practically our trade has remained at the same level during this period.

Iftikhar said either we have to concede that our industries do not have the capability to compete in Indian markets or we should find out what is stopping Pakistani goods from penetrating into the India. He said various analyses and research have shown that Pakistan enjoys advantage over Indian products in basic textiles particularly fine ladies fabric and bed linen. He said Pakistani cement is a well sought-after commodity in areas bordering Pakistan’s Punjab. “We make three-wheeler auto rickshaws at one third the price of Indian auto rickshaws,” he said adding that despite official free access to Indian markets none of these products have made significant inroads in the Indian market.

“The core issues to be settled before granting MFN status to India are that of non-tariff barriers (NTBs) and technical barriers to trade (TBTs) facing Pakistani goods trying to enter Indian market,” said Mian Muzzaffar Husain, a former LCCI president. He said the federal government was adamant on granting MFN to India ignoring reservations of trade and industry. “The agriculturist lobby jumped into the fray ably organised by Sughra Imam,” he said adding that she reportedly made a strong case in the presidency and was able to register successfully the reservations of the agriculturist lobby. Working behind the scene and shunning media attention she successfully turned the tide against pro-India lobby – at least for the time being, he maintained.

He quoted a report by former secretary commerce Tasneem Noorani, which states “the key to trading with the enemy should be of mutual benefit. Pakistan’s export to India was $288 million in 2004-05, while it was $264 million in 2010-11, a decline of 8 percent while India’s export in 2004-05 to Pakistan was $547 million and $1743 million in 2010-11, an increase of 218 percent. Now this is a discomforting scenario, considering that Pakistan is not even working on MFN basis, and the trend is already adverse.