"Pakistan must weigh up risks and benefits of opening trade with India," said speakers in their speeches in a seminar on "the pros and cons of trade relations with India", jointly organised by the Institute for Policy Reforms and the Lahore Chamber of Commerce and Industry at the chamber on Tuesday.
The audience also included Institute for Policy Reforms Chairman and former Federal Commerce Minister Humayun Akhtar Khan, Lahore Chamber President Ijaz Mumtaz, Adviser IPR Doctor Manzoor Ahmad and Standing Committee on Pak-India Trade Convenor Aftab Ahmad Vohra.
Former Federal Commerce Minister Khan said in his speech, "That normal trade with India has been under discussion for many years. Rigorous assessment of cost and benefits is the only way to take a decision and move this matter to closure, one way, or another." He said this approach would also bring all stakeholders on a common ground. "The fits and starts nature of the relationship finds reflection in conflicting trends. On the one hand, Pakistan does not have normal trade relations with India. On the other, Pakistan and India are members of the South Asian Free Trade Area. This apparent incongruity reflects the reality of our bilateral relations. Decision on trade with India, therefore, must harmonise among security, economic, and trade interests."
He said recently the Institute for Policy Reforms examined overall developments in South and Central Asia and recognised that there were risks to Pakistan's security and advised policy makers to consider an incremental approach and distinguish among normal trade, and opening of land and transit routes. He said this event would examine economic and trade benefits and risks. The institute expected that such discussion would help policymakers take a decision.
Chamber's Pakistan India Trade Committee Head Vohra relied on his extensive personal experience of trading on Pakistan's land border with India. He said, 'Pakistan businesses and consumers will benefit greatly by opening trade route. It will help both exports from Pakistan and imports from India."
He dwelled on the need for improved trade facilitation and logistics to help traders and called for a single-point customs check by customs authorities of both countries. 'New security restrictions on accessing the Wagah post are a great inconvenience for passengers and traders. The political differences must not impede trade interests and cited many examples of regional economic growth through trade across borders."
President Mumtaz said trade normalisation between India and Pakistan was never as simple as it seemed to be. He said, "There are a number of factors that determine these bilateral trade relations. We are in favour of it but it has to be done very carefully. We do not fear to compete with India in a free trade regime but before opening borders, we must have a well thought out plan which is to be finalised in consultation with private sector."
He went on, "The Lahore Chamber has especially partnered with the Institute for Policy Reforms with a view to hold a debate to see the possibilities of increasing direct trade between two countries. The indirect trade is taking place between Pakistan and India via third destination which not only adds to shipment cost but also stretches lead time. He said that we have to find ways to mitigate the adverse effects of tariff and non tariff barriers."
Dr Manzoor spoke largely in support of an open trade and listed the specific risks and benefits of trade with India. "Developing economies that are globally integrated experience sustained growth. Over 60 percent of global trade takes place via the supply chains of MNCs who make their buying decisions in all parts of the world. Pakistan's trade policy results in loss in prosperity. Pakistan risked further growth loss if it was left out from recent moves towards South Asian integration. In his view, Pakistan must find ways to build on South Asia's dynamism. Past studies on Pakistan India trade overwhelmingly showed significant economic benefits for our economy," he said.
He then wondered why Pakistan delayed the normal trade relations as GOP's negative list of tariff lines, since 2012, meant that substantial trade was open to begin with. 'Among those items still restricted and likely to face stiff competition from India, such as pharmaceuticals and auto parts, sufficient legal remedies are available to protect them. Some agriculture products face unfair competition from India, but those tariff lines are already open for import.