MFN to India after removal of trade barriers: Islamabad

Trade talks have reached a hiatus once again after reports of cease-fire violations along LoC

The government of Pakistan said on Friday it would grant the ‘Most Favoured Nation’ (MFN) trade status, the fancy term for non-discriminatory status, to India only after we remove non-tariff barriers on Pak export and a consensus was had among all stakeholders in that country.

In contrast, the government of India granted them the MFN status in 1996. Under the World Trade Organization (WTO) norms, member-countries are mandated to give this status to each other on a reciprocal basis. The two governments had decided to normalise bilateral trading relations in 2011.

“For the grant of MFN status, there are certain issues to be addressed by both countries, such as creating a consensus among stakeholders within Pakistan, and persuading the Indian government to remove non-tariff barriers,” stated a communiqué by the Pak high commission here, quoting their foreign ministry spokesperson, Aizaz Ahmad Chaudhary. He had addressed Pak media in Islamabad on Friday.

He also said all these issues would be discussed elaborately “as soon as the dialogue resumes” in an effort to “move towards a normal trading relationship between the two countries”.

Trade talks have again reached a hiatus, after reports of ceasefire violations along the Line of Control (LoC), with India accusing the Pak army. In June, after the coming in of a new government there under Nawaz Sharif, private sector honchos from both sides met to chart a road map for expanding of trade and investment between both nuclear-armed neighbours. It was widely expected that the new government would take major strides in smoothening the bilateral trade ties.

Since the decision to normalise trade ties in 2011, both sides have taken a series of measures. This includes Pakistan abolishing a small ‘positive’ list of items that alone could be imported from India, in 2012. As a result, India can export almost 7,500 items to Pakistan.

However, Pakistan still bans export of 1,209 products, including textiles and pharmaceutical products.

Exports to Pakistan reached $432 million during the first four months of this financial year, while imports were $57.9 mn. In 2012-13, the total trade between India and Pakistan was $2.35 billion, over $1.94 bn in 2011-12, according to official data.