Editorial
 

DAWN, 4 November 2011
SECTION: EDITORIAL
HEADLINE: [B]MFN for India[/B]

DESPITE the bureaucratic mishandling of Wednesday`s announcement about the granting of Most Favoured Status nation to India — no decisions have yet been taken, notwithstanding the information minister`s statement — reports indicate that the government is seriously considering the move. If implemented, it would have a far-reaching impact on relations between the two countries. Some political parties have expressed concerns over the consequences it would have on Pakistan`s security. Objections have also come from trade lobbies that fear Indian imports could hit domestic industry and add to unemployment. However, the issue is not so simple: the `Most Favoured Nation` tag is a misnomer, for it is actually a non-discriminatory regime that more or less all nations have to extend to each other as members of the World Trade Organisation. This would also strengthen Pakistan`s case for the removal of non-tariff barriers, which are a major source of the current imbalance in bilateral trade to Islamabad`s disadvantage.

It will take quite some time before the MFN process goes into effect. A number of issues will need to be ironed out before India can be brought in line with other countries Pakistan has granted MFN status to. The commerce ministry will also have to take up the issue with Indian officials for finalising a roadmap for freer trade. But as the commerce secretary said, “the entire trade liberalisation process is linked with the removal of non-tariff barriers” by India. If it does get going, the MFN regime would help reduce the considerable amount of informal trade between Pakistan and India and generate more revenue. Besides, stiff competition from imports would prompt Pakistani industry to improve the quality of its products and make its prices competitive.

The political advantages of mutual MFN treatment would outweigh the economic disadvantages that certain trade and industry groups are apprehensive about. The basic challenge is to move toward normalisation and make a success of the peace process that was so rudely broken by Mumbai-II. The 12-point statement issued by the two foreign secretaries in June and the satisfactory outcome of talks between Foreign Ministers Hina Rabbani Khar and S. M. Krishna in Islamabad a month later have served to lower tensions and committed the sides to an “uninterruptible” peace process. The move towards freer trade, coming ahead of the Saarc summit meeting in the Maldives, should be seen in that spirit. One hopes that MFN status for India will eventually be granted and will prompt the two sides to make progress on other issues, especially the delayed visa liberalisation regime and India`s pledge to support Pakistan`s case for access to the EU market.

Saarc summit
 

10 November, 2011

IT has been a rather steep climb for the South Asia Association for Regional Cooperation to the 17th summit in the Maldives. The organisation has been repeatedly dubbed as ineffective, and there has been criticism questioning its very existence. Saarc is a group of countries that are often found competing for international business and favours. The Bangladeshi blocking of the European Union move to give concessions to Pakistani textiles just days ahead of the Maldives summit is a case in point. The feeling, however, is that it is about time that Saarc found a common idiom to debate common issues, and as per global routine, the belief is that the language of trade and a hugely empowered moderator in the US will ultimately bring the eight South Asian countries together.

Its members increasingly beholden to the superpower, Saarc is finally showing signs that it is capable of making some positive contribution towards improving ties. Reports say the two-day summit is expected to produce four pacts on regional cooperation that include one for creating a seed bank to boost agricultural productivity and another for setting up a rapid action force to combat natural disasters. India is going to push for trade liberalisation, and Prime Minister Yousuf Raza Gilani`s emphasis on cooperation on the rail, road and sea route does indicate that Islamabad would be receptive to New Delhi`s ideas on boosting business among Saarc countries.

Faithful to the summit theme — Building Bridges — Mr Gilani was upbeat when he left for the Maldives on Wednesday. His keenness was backed by evidence on the ground as he pointed out that it was the warming of ties between Pakistan and India which had reinvigorated Saarc. The year 2011 has been marked by developments that have led New Delhi to declare that its trust deficit with Islamabad was shrinking. The latest development has been Pakistan`s decision to recognise India as most favoured nation (MFN). With regional trade as the most important item on the Saarc agenda and the organisation`s utility so dependent on the Pakistan-India equation, this must be taken as a good omen for South Asian cooperation. But it is one that needs to be carefully kept alive by protecting it against dangers, the most potent of which emanates from terrorism. Just as they are today inclined to have a force against natural disasters, it would be in sync with the times if the chief executives of the eight Saarc countries, who have gathered together for the summit, were to seriously discuss the idea of a joint defence against terrorism.