Pakistan pushes trade diplomacy, talks on MFN Wednesday

Pakistan pushes trade diplomacy, talks on MFN Wednesday

Fahim will meet Sharma in New Delhi Wednesday to discuss a host of issues, including the liberalisation of trade and visa regime for businessmen of the two countries.
There is a possibility that Pakistan may move a step forward on the Most Favoured Nation (MFN) status for India by shifting from from a positive list to negative list. The two sides are also expected to focus on liberalising the visa regime for businessmen.

In Mumbai, Fahim, who came here Monday accompanied by a 70-member delegation, addressed businessmen from both countries at the Hotel Taj Mahal, which was targeted by Pakistani terrorists in November 2008, indicating an easing of ties which had plunged to a new low after the 26/11 attack.

Fahim, the first Pakistani minister to visit Mumbai after 26/11, also stressed on the role of trade in positively resolving other issues between trading partners.

“Normalisation of trade relations between India and Pakistan could thus be a vehicle to facilitate resolution of other political issues between the two countries.”

"This would create more chances of for success of the composite dialogue between India and Pakistan."

Pushing for greater regional trade, Fahim, who is on a five-day visit to India, underlined that South Asia should try to emulate stronger regional blocs that have emerged in other parts of the world.   

"Wealth of nations has increased in direct proportion to the proportion of trade in their GDPs. Similarly, regional trade has been found to be most effective and efficient means of bringing progress and prosperity to all countries of the region,” he said.

"This is the very reason for the emergence of regional trading blocks like EU (European Union), NAFTA (North American Free Trade Agreement) and ASEAN (Association of Southeast Asian Nations)," he said while addressing a business conclave, Exploring Business Between Neighbours, in Mumbai. Senior officials and businessmen from both countries participated in the discussions.

"It is about time we, in the south Asian region, should be contemplating strengthening our regional block in South Asia," Fahim added.

The conclave was organised by Federation of Indian Chambers of Commerce and Industry (FICCI).

India-Pakistan trade was estimated to be $1.85 billion in 2009-10. Indian exports accounted for $1.78 billion. In April-December 2010, bilateral trade is estimated to have jumped gone up to over $3 billion with India’s exports at $1.7 billion.

Businessmen from India and Pakistan, who were participating in the discussions, stressed on liberalisation of numerous non-tariff barriers which are impeding trade growth between the two countries.

"More business visas should be stamped to facilitate stronger trade ties between the two countries," DHL Express' vice president (South Asia) Ramesh Natarajan said.

Natarajan also appealed to both the governments to open up telecom boundaries. "When I go to Pakistan, my India cellphone does not work. Same is the case with Pakistani businessmen who visit India. We have to go through subscribing to a local network every time we visit," he said.

Another businessman urged the governments of both the countries to ease barriers and facilitate free trade.

"Trade across heavily militarised borders is severely restricted both in the number of items that are permitted to be bought and sold, and the hours during which the customs are open for business," said Farid Fazal, director of Lahore-based D.G. Khan Cement Company.

"With massive infrastructure development in India, we are geared up to supply cement but due to shortage of railway wagons, which are our only means to export cement, we are being restricted," he added.

Exporters are forced to route the bulk of trade via a third party such as Dubai, raising business costs, slowing deliveries and inflating prices.