WEDNESDAY NOVEMBER 16: Normal trade, travel ties: Pakistan, India take new strides

NEW DELHI: Pakistan and India here on Tuesday agreed to further enhance bilateral trade ties besides expressing satisfaction over the progress being made to fully normalise the relationships. A joint statement in this connection was issued at the end of 6th round of talks on commercial and economic co-operation between the commerce secretaries of two countries held from November 14- 16 under the dialogue process, which started in 2004.
The Pakistan delegation was led by Zafar Mahmood, Secretary. Commerce and the Indian delegation was led by Commerce Secretary, Rahul Khullar. Both sides expressed satisfaction with the overall progress being made to fully normalise the bilateral trading relationship.
Both sides also agreed that the momentum of work and the determination to move forward had transmitted positive signals about advancing the bilateral trade agenda. In this context, the statement said that India welcomed the decision taken by Pakistan to accord Most Favoured Nation (MFN) status to India and to the mandate given for full normalisation of the bilateral trade relations, as also meeting of all legal obligations.
To take forward the decisions taken during the 5th round of talks in April 2011, many bilateral Groups/Sub-groups were set up. Almost all of these groups/sub-groups have met and worked on their specific designated tasks. The working group to address sector-specific barriers to trade met in August 2011.
The statement said that the Joint Technical Group to oversee progress in development of physical infrastructure at Attari-Wagah Land Customs Station has met frequently. The Customs Liaison Border Committee was formalised and has met at bimonthly intervals and done commendable work in facilitation of all trade consignments.
The JWG on Economic and Commercial Co-operation and the Sub- Group on Customs Co-operation met in August 2011. The first meeting of the Group of Experts on trade in electricity was held in October 2011 and the Sub-Group to facilitate trade in petroleum products is slated to meet in December 2011. Both sides agreed that the momentum of work and the determination to move forward had transmitted positive signals about advancing the bilateral trade agenda.
The commerce ministers of both countries met in September 2011 and gave a clear political mandate to the respective commerce secretaries to lay down specific timeliness for full normalisation of the trade relationship, dismantling of remaining non-tariff barriers, and full implementation of the legal obligations under the SAARC Agreement on South Asian Free Trade Area (Safta).
Both sides agreed that Pakistan's Commerce Minister's visit to India after 35 years and the political ownership of leaders of both the countries has not only given the trade normalisation process further strength and direction but. a great hope and confidence to the business community also. They expressed hope that positive developments in the trade track would encourage similar progress in other components of the dialogue process.
The joint statement said that during the 17th SAARC Summit held at Maldives (November 9-11, 2011), the political leadership on both sides directed that the two sides also work on enhancing preferential trading arrangements as part of the shared vision to significantly expand bilateral trade. The Pakistan side informed that its Cabinet has given a mandate to the Commerce Ministry for complete normalisation of trade with India.
It appreciated India's support in WTO (World Trade Organisation) for the EU (European Union) concession package for Pakistan, which would give the Pakistani business community confidence and create an environment of trust and co-operation. The Indian side welcomed the Cabinet decision and reiterated its support for the normalisation process and building trust.
In context of outcomes agreed in the 5th round of talks, progress was reviewed and further decisions taken as follows: Regarding Trade Normalisation: it was decided that the move to full normalisation of trade relations shall be sequenced. In the first stage, Pakistan will transition from the current Positive List approach to a Negative List. The consultation process on devising this Negative List is almost complete. A small Negative List shall be finalised and ratified by February 2012. Thereafter, all items other than those on the Negative List shall be freely exportable from India to Pakistan. In the second stage, the Negative List shall be phased out.
The timing for this phasing out will be announced in February 2012 at the time the List is notified and it is expected that the phasing out will be completed before the end of 2012. In terms of the clear mandate given by the political leadership, both sides agreed to move towards enhancing the preferential trading arrangements under the Safta process.
As agreed earlier, bilateral trade can be significantly expanded by extending tariff concessions on products of commercial interest. Both sides designated the Joint Secretaries in their respective Ministries of Commerce as Chief Negotiators for working on how to improve preferential trading arrangements under SAFTA.
Regarding the Trade Infrastructure both the sides reviewed the progress made in developing physical infrastructure for trade through the Attari-Wagah land route, It was agreed that the Joint Technical Group overseeing the work would meet at the end of November 2011 and there would be follow-up monthly meetings in December 2011 and January 2012. It was also agreed that all infrastructure construction would be completed and fully operational no later than the end of February 2012.
This timeline would coincide with the announcement of the Negative List (See para 7 A (i) above). The new trading regime will thus be applicable to all trade through the land route after the infrastructure at Attari-Wagah is commissioned. Regarding the New Trade Initiatives both the sides agreed that the first meeting of the Joint Group of Experts to examine feasibility of trade of electricity was held on 20th October 2011 at New Delhi.
The Pak-India joint statement said the Central Electricity Authority and Power Grid Corporation of India Limited/Power System Operation Corporation Ltd have been designated as the nodal technical agencies from the Indian side. They are interacting with National Transmission and Dispatch Company Ltd of Pakistan to work out the optimal technical solutions for grid connectivity between both countries.
A broad understanding has been reached on possible grid connectivity between Amritsar-Lahore to enable trade of up to 500 MW of power. The second meeting of the experts is scheduled to be held in Islamabad in the first week of December 2011. It is expected that the Group of Experts will reach a final understanding on grid connectivity at this meeting.
Regarding trade in petroleum products, it was agreed that the Joint Group would hold its first meeting before January 2012. About the Non-Tariff Barriers, the joint statement added that a JWG meeting was held in August 2011; co-chaired by the Joint Secretaries of the respective Commerce Ministries.
The Pakistan side furnished a specific list of non-tariff barriers, as perceived by their business community, for sectors such as textiles, leather, cement, agricultural produce and surgical instruments. It was agreed that these would be comprehensively examined on the Indian side and interactions would be arranged between the concerned Regulators and Pakistan's business community to discuss and find solutions for all issues raised.
A comprehensive discussion, "Nuts and Bolts of Trade Facilitation", was organised in Delhi by FICCI, on 29.09.2011. Participants included Pakistan and Indian business delegates, technical experts, representatives of Indian regulatory bodies, and senior government officials. The feedback received was that this seminar had been most useful to address issues raised by businesspersons as well as to dispel misapprehensions.
It was clarified that all standards and specifications were non-discriminatory, viz., they applied to all countries exporting goods to India. The discussions also explained how insistence on specific standards by importers was due to commercial considerations and not because of any Government requirement. A comprehensive special session was held during this round of talks on matters of concern to Pakistan side. Detailed responses were provided by concerned officers on the Indian side.
It was agreed that the JWG would continue interaction to address any clearly identified sector-specific barriers to trade. The Joint Secretaries of the respective Commerce Ministries would convene focused meetings on these issues, as necessary.
A delegation comprising officers from various regulatory bodies would visit Lahore/Karachi in the first quarter of 2012 to provide necessary outreach so that businesspersons in Pakistan can be better informed about India's trade regulations, standards and labelling/marking requirements. Both the sides agreed to initiate the process of a limited MRA as a formal mechanism to address the issues of standards and conformity assessment.
It was agreed that there was a need to institute a mechanism for redressing grievances arising from clearance of trade consignments at land, sea and airports. Pakistan side proposed that an agreement be concluded between both countries to address the concerns of the business community.
Indian side agreed to consider this proposal and undertake further consultations in this matter. Regarding Trade facilitation, both sides appreciated the work done by the Customs Liaison Border Committee (CLBC) in resolving the operational issues at Wagah-Attari. The CLBC was mandated to undertake a comprehensive overview of the requirements to ensure expeditious clearance of goods including harmonisation of customs procedures and to make recommendations to the Joint Working Group on Economic and Commercial co-operation.
The Sub Group on Customs Co-operation met in New Delhi on August,24, 2011. It discussed issues relating to harmonisation in customs procedures, facilitation of trade consignments, and exchange of trade data and information. Nodal customs officers on both sides have been notified. It was also agreed that they would maintain direct contact on all matters pertaining to delays in trade consignments, trade document requirements, and other matters of customs co-operation. The Pakistan side handed over a draft of the Customs Co-operation Agreement. Both sides agreed that best efforts would be made to finalise the Agreement by January 31, 2012.
Regarding the Economic Co-operation and regarding Bt cottonseed imports from India, it was noted that Government of Pakistan has constituted a committee to examine this issue. The first step may be permitting limited import solely for the purpose of field trials in Pakistan.