The Commerce Ministry has reportedly been directed by the presumptive government of Pakistan Muslim League-Nawaz to submit a summary on trade liberalisation with India commonly known as Most Favoured Nation (MFN) status in the first cabinet meeting, sources told Business Recorder on Wednesday.
On February 28 last year, the Cabinet had decided to move from positive to negative list of items for India from January 1 this year noting that all stakeholders were on board, and the proposals were approved unanimously. These are as follows: (i) replacement of the positive list in appendix G of the Import Policy Order 2010-11 by a negative list for imports from India comprising 1209 tariff lines at the 8-digit HS Code; (ii) in principle to make appropriate changes in the trade defence laws in consultation with the stakeholders to allay the apprehensions of the industrial sector for using these laws more effectively against any unfair practices or injury to local industry by Indian imports; phasing-out of the negative list with the timeline of December 31 last year in principle subject to further progress regarding provision of level playing field for Pakistan's exports to Indian markets. The Ministry of Commerce would bring the case for complete normalisation of trade relations with India to the Cabinet for approval after further negotiations with India; (iv) It was also directed that the citizens may be educated on the benefits of normalisation of trade relations between the two neighbours through a media campaign and seminars etc by the Ministries of Commerce and Information and Broadcasting.
However, the process was stalled because of pressure from farmers in Punjab, Jamaatut Dawa of Hafiz Muhammad Saeed, automobile sector, pharmaceutical sector etc. As the caretaker government took over, General Headquarters (GHQ) summoned officials of the Commerce Ministry wherein clarifications were sought on different issues linked with trade normalisation with India.
President of PML-N Nawaz Sharif has vowed to normalise ties with India as soon as his party emerged victorious in the elections. Indian industry and business community has already expressed the hope that trade relations with Pakistan will improve with the coming of Nawaz Sharif. Indian business community feels that MFN status will be accorded to India along with reduction in non tariff barriers from both sides.
Analysts believe that Pakistan may suffer a decline in international investment after granting MFN status to India as investors may prefer to invest in the bigger market, stakeholders insist. Earlier, the Commerce Ministry argued that the MFN status was being granted to India without completion of infrastructure at the Wagha border, and claimed that the prices of goods coming from India would double and the purpose of cheaper goods supply to people will not be served. According to documents obtained by this correspondent, both countries had agreed that in the first phase India promised to reduce the SAFTA sensitive list by 30 per cent before October last year, in lieu of opening of Wagha border.
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