Pakistan and India are neighbours, as well as two important members of the South Asian Association for Regional Cooperation (SAARC). There are immense potentials of cooperation in the sectors of trade, industry, research, technical cooperation, education and healthcare, but, unfortunately, have been neither availed nor explored. Instead of benefiting from geographical proximity, time was wasted on efforts for airing the differences. It did not help in co-sharing prosperity; rather precious resources were wasted on wars. Pakistan was disintegrated into two parts in 1971.
The SAARC Chamber of Commerce and Industry from its inception had realised that the differences created on political basis were damaging the potentials of regional cooperation. Therefore, it accepted the challenge and after making efforts of bridging the differences of the private sector on both sides succeeded in persuading the Indian and Pakistani governments to sit on the table and discuss how economic cooperation can be given a practical shape pending the political issues. Subsequently, meetings among the Commerce Sectaries of both countries were held where a framework was agreed upon to normalise trade relations and sort out procedural bottlenecks.
A brief of the framework finalised at the 5th round of the India-Pakistan talks on commercial and economic cooperation held on April 27-28, 2011, in Islamabad is given below for information:
i Both sides agreed that increase in trade and economic engagement would help not only in the mutual quest for national development, but also contribute to building trust between the two countries.
i To build confidence, dispel misunderstandings and allay any misapprehensions, it is essential that governments in both countries support the business communities in the promotion of bilateral trade.
i To promote trade, both tariff and non-tariff barriers (NTBs) need to be reduced or removed.
i Both sides agreed to expand trade through the Wagah-Attari border by: (a) increasing trading hours taking advantage of the new infrastructure; (b) expeditious clearance of cargo; and (c) facilitating movement of large vehicles and containerised traffic. It was noted that an informal and effective customs liaison arrangement is already operating at the Wagah-Attari border.
i It was decided to undertake a new initiative to enable trade of electricity between both countries.
i Both sides also agreed to work out how to initiate and substantially expand trade in all types of petroleum products.
i A new initiative to promote bilateral trade in BT Cotton Seeds was identified.
i Cooperation in the Information Technology (IT) sector would be encouraged through the private sector route.
i Pakistan recognised that grant of the Most Favoured Nation (MFN) status to India would help in expanding the bilateral trade relations. Both sides agreed to remove the NTBs and all other restrictive practices that hampered bilateral trade.
i Both sides agreed that facilitating grant of business visas was essential to expansion of trade.
i While appreciating the need for business-to-business contact, both sides desired to create an enabling environment and encourage the Chambers of Commerce and Industry on both sides to form officially recognised Joint Chambers at the apex and regional levels.
i On opening of bank branches in each other’s countries, both sides agreed that banking channels are important and the process needs to be fast tracked.
Similarly, a number of conferences were held in various SAARC member countries to come out with the viewpoint of stakeholders. After 15 years, the ice melted and Pakistan agreed to grant the MFN status to India. It may be noted that while signing the SAFTA agreement on June 6, 2004, Pakistan agreed granting MFN status to liberalise trade, being a requirement of the World Trade Organisation (WTO) framework of softening trade policies.
Anyway, the fears being raised in the country on granting MFN status to India is not based on facts. Prior to granting this status, the Government of Pakistan invited suggestions from the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), regional chambers and other trade bodies acknowledging trade and industry as the major stakeholders. Later on, various trade sectors, like textile and automobile industry, leather manufacturers, garments manufacturers, pharmaceutical manufacturers, etc, will be involved while selecting items for concessionary tariff and ‘negative list’ to save the domestic industry from any damage.
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