The trade game

The run-up to the SAARC summit meeting in Islamabad appears, on the face of it, to augur well for regional economic cooperation. Pakistan wants to take forward the South Asian Preferential Tariff Agreement (SAPTA) vis-a-vis India under which countries bilaterally agree to reduce tariffs on imports from each other of designated items.

It is logical to assume that if SAPTA goes on for long then it will end up with both countries granting each other the most favoured nation (MFN) treatment. This could indeed be a roundabout journey towards that goal. Should it be reached eventually, it would remove one of the major hurdles in the way of normalising relations between the two countries.

But things are not so simple in the tortuous world of India-Pakistan diplomatic one-upmanship and today's trend may become tomorrow's disappointment.

Two countries can go on reducing tariffs on large numbers of unimportant items (from the point of view of bilateral trade) for a long time before they get to the key ones, like say tea or Bollywood films, when the exercise begins to matter.

Not surprisingly, Riaz Khokhar, the present Pakistani foreign secretary who did a long combative stint as high commissioner in New Delhi, has made a distinction between free trade in a "bilateral" (read SAPTA) and "regional" (read SAFTA) context.

Pakistan is also now in the happy position of not being blamed for the stalling of SAFTA, which its unwillingness to grant MFN status to India was leading to, because it is currently the demand for special treatment by Bangladesh and other LDCs of the region which is holding up an agreement.

There is careful calculation behind recent Pakistani willingness to normalise ties, including removing trade impediments, with India. It is seeking to win global brownie points by these acts and thereby create pressure on India to come to the table and talk on the one issue that matters to its establishment, Kashmir.

India, on the other hand, has so far stalled such a dialogue by insisting that first Pakistan put an end to cross-border terrorism.

This Gen Musharraf both cannot and dare not do. He cannot because of the way in which jehadis, whose faces are turned towards Kashmir, have become inextricably intertwined with the Pakistani establishment. He dare not because if he seriously tried to put an end to the safe haven for jehadis in his country, the establishment itself will pull himdown.

The really new element is the two attacks in the last few days by jehadis on the general himself. A time may soon come when he will find it difficult to distinguish between jehadis who have their face turned west (Afghanistan and further) and those who look eastward (Kashmir). One suicide attacker has been identified as hailing from Pakistani Occupied Kashmir.

A prominent Taliban leader, furious at the general for making things unbearable for its activists, has said he must be eliminated as otherwise he will hand over Pakistan to the Hindus and go off to enjoy his stashed away money.

If the general can show his countrymen that he has extracted a substantial concession from India on Kashmir by normalising relations, then it will win him legitimacy. Right now the jehadis, who have been used to keep the Kashmir pot boiling, are seeking to queer the pitch for the general.