The Commerce Ministry is likely to be grilled by Parliamentary Special Committee on Kashmir on Thursday (today) for showing extraordinary ''efficiency'' in normalising trade relations with India, well informed sources told Business Recorder here on Wednesday.
The meeting will be presided over by Fazal-ur-Rehman, a key opponent of MFN status to India. The committee has already prepared tough questions for Commerce Minister Amin Fahim and Secretary Zafar Mahmood. The Ministry is reportedly not giving due weight to concerns of the establishment promoting a link between trade and progress on strategic dialogue as well as industrial groups who have urged the government to link any deal with the elimination of non-tariff barriers (NTB) that India is notorious about imposing on all imports, with some additional Pakistan specific NTBs.
On December 27, 2011, President Zardari thundered that "no one should give us a lesson as to which country we should do trade with; we know with whom we should go for trade". The reference here was to India and Iran-Pakistan gas pipeline project that remains stalled due to intense US opposition.
The Commerce Secretary has already clarified that there is absolutely no pressure for normalisation of trade relations with India. The Minister of Petroleum is on record as having stated that the Iran-Pakistan gas pipeline will proceed until there are international sanctions against trade with India.
The Commerce Ministry''s defence in proactively supporting trade with India is to argue in a presentation that there is nothing new in what is being suggested with regard to trade with India. The presentation notes that as early as 1947-1965 Pakistan had granted MFN status to India despite cross border killings and Kashmir dispute; and India was granted access to Afghanistan for transit trade, and border trade was permitted. An agreement between Pakistan and Afghanistan was signed on June 25, 1966 for operation of Chaman-Spin Boldak Railway. The pact granted rail route to Afghanistan from India. However, no specific mention of Lahore was made.
In 1972, Simla agreement was inked whereas in 1974 protocol and 1975 trade agreement was signed, according to which restricted trade to public sectors of both countries in cotton, engineering goods, jute manufacturers, iron ore, railway equipment, rice and tea was allowed. The agreement expired in 1978.
In 1983, Afghanistan was granted access to India for transit trade but not India to Afghanistan. Trade with India continued on positive list, extended every year to a few more items. Since 1996, when India granted MFN status to Pakistan, the issue has remained a subject of intense debate, based on political rather than purely trade/economic factors. Regarding composite dialogue with India, the presentation says that both countries have held four rounds so far. First round was held on August 8, 2004, Islamabad; second round on 9-10 August 2005, New Delhi; third round 28-29 March, 2006, Islamabad; and fourth round on July 31-August 1, 2007. The Mumbai attack derailed the whole process.
However, both countries resumed composite dialogue after four years. In this regard, first round of Pakistan, India Commerce Secretary level talks were held on April 27-28, 2011; mid-term review was in August 2011, and Pakistan''s Commerce Minister Amin Fahim visited India in September, 2011.
In the sixth round of Commerce Secretary level talks between India and Pakistan, the major decisions taken towards full normalisation of trade relations were as follows: (i) at first stage, Pakistan will transition from the current positive list approach to a negative list by February, 2012; (ii) thereafter, all items other than those on the negative list shall be freely exportable from India to Pakistan; and (iii) the timing of phasing out of negative list will be announced in February 2012 at the time the list is notified.
To move from positive to negative list, Commerce Ministry has claimed that it is going through extensive consultation process both with public and private sectors of Pakistan. In the first stage, the Ministry held extensive consultations with all chambers and trade association, and sought their input on negative list. In the second stage Trade Development Authority of Pakistan (TDAP) held sector-specific meetings with all stakeholders. And, in the third stage, reputable institutions like IBA and LUMS were involved in carrying out this exercise.
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