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Pak-India ties to pave way for S Asia Free Trade Zone

The Nation, Pakistan

Pak-India ties to pave way for S Asia Free Trade Zone

By: Salman Abduhu

13 January 2013

LAHORE - There are several safeguarding measures under WTO regime to save industry even after normalisation of trade with India, as delay in this regard will jeopardise the process of liberalisation of trade between the two neighbours.

This was observed by former federal minister of state and India-Pakistan Chamber of Commerce and Industry (IPCCI) President S.M Muneer while talking to The Nation here.

Recipient of the Best Businessman of the Year Award as well as Sitara-e-Imtiaz observed that India is a big market of over 1.2 billion people which needs to be tapped by aggressive marketing strategies and interactions. The impact of trade liberalisation is expected to be about $6 billion against the existing bilateral trade volume of $2.6 billion. He said that exporters of several items in Pakistan including fruits and vegetables have already informed the ministry of commerce about their willingness to compete with Indian exporters in their respective fields. He agreed that the infrastructure issues were hindering the growth of the trade between Pakistan and India and urged both governments to remove them.

He said the land route was most competitive as carrying a container through Wagha and cost much lower while the same through Mumbai-Dubai-Karachi cost many times more.

We need to provide better infrastructure to facilitate trade through the closest route as both the countries should try and explore ways and means to create synergies and not get overly competitive, he suggested.

Improved bilateral ties between India and Pakistan will give the necessary oxygen to South Asia Free Trade Zone which will open vistas of opportunities for countries of the region, he added.

The noted business leader maintained that air link between the two sides is vital and impressed upon the Indian government to open up more flights to Pakistan, he added.

He said Pakistan and India could cooperate in transfer of technology besides trade in raw materials, IT sector, tourism, agriculture and medical. He said cooperation in these areas could change the fate of the people living in the two countries.

On a question that Pakistan’s exports to India are just one-sixth of that imported directly from India, he said: We need to expand trade relation in phases. Like initially certain raw materials and semi-finished goods should be imported from India.

He also highlighted enormous problems due to Non Tariff Barriers and said called for preferential treatment from Indian authorities so fruits of greater trade might be adequately shared among the businessmen of both the countries.

Pakistan’s exports to India mainly consist of fresh fruits, cements, polycarboxylic acids, cotton yarn, light petroleum distillates, carbonate, unwrought lead and leather, which are popular in India.

Expressing displeasure over government decision to delay granting Most Favoured Nation (MFN) status to India, Munir, who was also conferred with the Lifetime Achievement Award in 2012 by President Asif Zardari, said that the move will damage the image of the country abroad. Ministry of Commerce and Trade Development Authority of Pakistan (TDAP) should have convinced those stakeholders having reservations over opening of trade with India.

There is no rational behind delay in normalisation of trade process, as MFN means just normal trade. According to him, the commerce ministry and TDAP could have talked to growers or others sectors having concerns about opening trade with India before making commitments with India.

The former chairman of Pakistan Trade Fair Corporation and ex-president of FPCCI observed that MFN status is an obligation under World Trade Organisation (WTO) and the country should grant the status to Delhi for enhancement of bilateral trade. The strong economic ties between the two countries were based on reciprocal basis with consideration and implementation from both sides.

“Opening up of investment opportunities in regional countries will have multi-dimensional effect on economic cooperation. The countries need to pave way to avoid double taxation and help create mutual strong economic zone in South Asia,” he said.