ISLAMABAD: Pakistan and India are to ink three pacts to normalise their trade relations which will ultimately led to Most Favoured Nation (MFN) status for India, reveals official documents obtained from Cabinet Division. Both countries have designated Joint Secretaries at Commerce Ministries as chief negotiators for working on how to improve preferential trade under South Asian Free Trade Area (Safta).
Pakistan's military and spy agency Inter Services Intelligence (ISI), besides Ministry of Textile Industry and a large segment of private sector is opposing MFN status to India. During the 5th round of talks held on April 27-28, 2011, the process of trade normalisation with India, which started in 2004, moved forward to achieve the desired goals.
In September 2011, commerce ministers of both the countries met in New Delhi and gave a clear political mandate to the respective Commerce Secretaries to lay down specific timelines 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 Safta.
The Cabinet in its meeting on November 2, 2011 gave a mandate to the Commerce Ministry to complete normalisation of trade with India. After the approval, Minister for Information and Broadcasting, Dr Firdous Ashiq Awan, announced that Pakistan has decided to grant MFN status to India, but Ministry of Foreign Affairs distanced itself from the minister's remarks. A couple of days ago, Prime Minister Syed Yousuf Raza Gilani also informed the National Assembly that the government has not yet decided to grant MFN status to India, adding that the Parliament will be taken into confidence at the time of such an important national decision.
The documents further reveal that during the 17th Saarc Summit held at Maldives (9-11 November, 2011, the political leadership on both sides also directed their representatives to work on enhancing preferential trade arrangements as part of shared vision to significantly expand bilateral trade. In the sixth round of Commerce Secretary level talks held on 14-15 November 2011, both sides discussed the process of trade normalisation further. In order to address the issue of Non Tariff Barriers (NTBs) and to allay the concerns of the traders, Ministry of Commerce has already taken permission of the Cabinet for negotiating a Custom Co-operation Agreement (CCA). In addition to that it was agreed to conclude two agreements.
i) Mutual Recognition Agreement (MRA): This agreement would be signed between the regulatory authorities of both the countries. This would provide a formal mechanism to harmonise standards and conformity assessment procedures for the products of export interest.
ii) Agreement on Mechanism for Redressal of Grievances- The agreement between the two Commerce Ministries would provide a mechanism whereby complaints regarding valuation, classification, delays in clearance of goods, certification, testing etc at land, air and sea ports would be registered and redressed.
iii) Preferential trading arrangements under Safta: During the sixth round of talks, both sides agreed to enhance the preferential trading arrangements under the Safta. It was noted that the 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. The documents further disclose that the Federal Cabinet which is scheduled to meet on November 29, 2011 in Governor House Lahore will allow the Commerce Ministry to proceed further on the agreements.