Secretary Commerce, Zafar Muhammad on Thursday acknowledged that trade deficit between Pakistan and India will widen after adopting the negative list, as opposed to the positive list, but assured the Senate's Standing Committee on Commerce that all possible measures will be taken to safeguard local industry.
Secretary Commerce faced tough questions from senators including Chairman Senator, Ilyas Bilour, Senator Ishaq Dar, Senator Haroon Akhtar Khan Senator Gul Muhamamd Lot and Senator Sameen Siddiqui. Senator Haroon Akhtar queried if trade liberalisation with India has been separated from the composite dialogue and whether issues of Non Tariff Barriers (NTB) will be resolved.
Secretary Commerce, who prepared a presentation based on facts from 1947, did not reply to these questions and advised that they should be raised with the Ministry of Foreign Affairs which was pursuing the composite dialogue. He said Pakistan will sign four agreements with India, ie Customs Co-operation Agreement, Mutual Recognition Agreement, Redressal of Grievances Agreement and Preferential Transit under Safta arrangements. He explained that Pakistani exporters had complaints against the Indian system and the Customs Co-operation Agreement.
Senator Ilyas Bilour asked Secretary Commerce whether Pakistan has imposed Non Tariff Barriers (NTBs) on Indian goods as the latter has slapped NTBs on 10 percent of Pakistani exports. Secretary Commerce replied that Pakistan is following a long and hard mechanism to include new items in the positive list. However, he did not mention any item from India which faced NTBs.
In reply to different questions raised by the Members, Secretary Commerce stated that the Commerce Ministry is preparing a version of four laws to make them user friendly. He argued that Commerce Ministry will arrange seminars in different parts of the country to educate business community about the Indian laws and opportunities for export of commodities. For this purpose, services of IBA and LUMS are being hired.
Answering another question, Secretary Commerce said that negative list of items with India will be less than 1000; however, he did not give concrete figures. An official stated that negative list will be around 600 items. Senator Ishaq Dar, in his observation said that local industry will be on the verge of collapse if blind concessions are extended to India. The government should not destroy local industry and make Pakistan a Mandi (market) for Indian goods. Unemployment in Pakistan would rise as a consequence, he added.
Secretary Commerce stated that he is well aware of the problems faced by the local industry and assured that the government will not take any steps, which will hurt the local industry which is already in trouble. Senator Haroon Akhtar raised questions regarding import of Indian goods through other channels including using a third country. Secretary Commerce responded that import of Indian goods through a third country would add 15-25 percent to the total price of the goods and, therefore, would not be economically viable.
Senator Haroon Akhtar argued that the government appears to be focused on benefiting India rather than Pakistan. Senator Abdul Razak commented that the government is apparently under pressure to finalise negative list with India by February 2012. Secretary Commerce, however, dispelled this impression and said that trust deficit in Pakistan is higher than in India.
"Whatever we do we are being criticised and unnecessary questions are raised," Muhmood added. He said Commerce Ministry is taking the process ahead and will have to safeguard domestic industry. "We got the Indians to agree on sequencing," Muhmood boasted. After the meeting Secretary Commerce told reporters that he would submit final summary on negative list to the Cabinet in February.