'MFN has become an academic issue in Indo-Pak trade'

Q&A: SYED ASIF SHAH, Pakistan Commerce Secretary

Trade relations between India and Pakistan have reflected the political engagement between the two nuclear-armed neighbours. In the past, Pakistan has rejected India's plea for the status of a "most favoured nation" (MFN).

But now trade seems to be on a roll and India is readying for cement imports from Pakistan to cool domestic cement prices. Pakistan's commerce secretary, Syed Asif Shah, told Rituparna Bhuyan that this was the best phase of trade and economic co-operation between the two countries.

How would you describe your visit to India this time?

I think the basic difference between this visit and earlier talks is that there was much more openness from the Indian side. There has been amazing openness and resolve on the part of the Indian side to move things forward.

How far would this round of talks contribute to improving trade and economic engagement between the two countries?

Currently, trade between India and Pakistan is growing but there is imbalance in it.

Pakistan has a negative trade balance of $800 million with India, while the total trade volume is $1.6 billion. We need to improve that. That was one of the main purposes of the Delhi talks from our perspective.

Did the Indian side address your concerns?

Absolutely. We gave records of non-tariff barriers on the Indian side and other technical restrictions related to trade. I must acknowledge that the Indian side was extremely sporting on this issue. They have taken that information, examined it and will explore the possibility of removing some of these barriers.

Don't you think if both countries trade on an MFN basis, commercial ties could be strengthened further?

The MFN issue has been raised by India in earlier meetings, but not this time. That is another forum and is related to World Trade Organisation issues. If it is raised, we will talk about it. But what does MFN do? Pakistan was given MFN status by India way back in 1995.

While we have not accorded MFN status to India, look at the trade that is happening. I don't think there is any need for Pakistan to give that status to India looking at the way Indian exports to Pakistan are growing. The trade balance is in India's favour. I believe the MFN issue has become an academic question. That may be the reason India did not raise this issue with us this time.

Taking into consideration the trade and diplomatic environment, what is the future of Indo-Pak economic relations?

Our leaders have repeatedly said that the composite dialogue has to address issues in tandem and we are doing well. There are advantages. We have said that Pakistan has excess cement, while there is a shortage of it in India. If we export cement to India it becomes a win-win situation for both the countries.

We get rid of our excess cement and earn foreign exchange, and India gets quality cement at cheap rates. This is how trade helps. When the installed capacity is used, further capacity is created which will lead to additional investment and job creation. This is our ultimate objective.

Could you give some examples of products or sectors in which there is scope for more engagement?

The biggest is, of course, textiles and garments. If we could get some assured market access to India, it will benefit both the countries. It will do India good because it will get a product in which we have a lot of experience.

Then again, there would be assured supply lines because of proximity. Other area of mutual advantage is fruit and vegetables. Sometimes, there is a shortage in Pakistan. Then we can source the commodity from India. India does not know about our mangoes. Agriculture is one area in which we could co-operate.

We share a long border. Do you see an opportunity in doing trade through borders through specified points.

Not really. No serious thought has been given to it. We need to move forward on other issues that are pending between us before border trade could happen.

On the Doha Round of trade talks at World trade Organisation, India has been vocal about concerns related to agriculture and industrial sectors, which is subscribed by other developing countries as well. Do you see any common interests with India regarding the negotiations on Doha Round.

We share the same concerns related to the Doha Round. In fact, we are part of some common groups in this regard. We share concerns on agriculture and NAMA (industrial goods).

We both feel that we are large agriculture producing countries and our products are unable to go in to European Union or USA because of the large subsidies and high tariffs. If tariffs and subsidies get reduced through Doha round, it will help both the countries.

What are prospects of joint cooperation in IT services?

There are huge prospects but we need to sort out other issues pending between both the countries. But the optical fibre link between both the countries have reached the meeting point and currently testing is going on. This should enhance cooperation in telecommunications and Internet activity.