India and Pakistan move forward with new trade initiatives
In an extraordinarily generous move,the Indian government issued a few hundred visas and opened its borders,inviting many Pakistani businesspeople and entrepreneurs to display their goods and to meet potential buyers and business partners in Delhi over the past weekend. This was the largest Pakistani exhibition in India ever,and the move was reminiscent of days prior to November 2008,when it seemed that the governments of both Pakistan and India were moving towards a different,perhaps even interlinked,future.
The granting of visas,always of major concern to Pakistani businesspeople and other visitors,was just the beginning. Little did one expect the gestures following the Lifestyle Pakistan trade fair,which newspapers in Pakistan unanimously called making major strides,as editorials spoke of more good news on India-Pakistan relations and India taking positive steps. Both Pakistan and India but India taking the lead and the bigger steps pledged to intensify trade and to take relations beyond that towards investment,again an unprecedented move,marking a departure from the previous level and nature of exchanges. Newspapers in Pakistan reported on the ministerial meetings which took place in Delhi last week,the third in seven months,and said that these had been highly satisfactory regarding the transition process for the complete normalisation of trade in goods and services as well as investment.
A new Integrated Check Post,better known as the new trade gate,opened at Wagah-Attari with new infrastructure and better facilities. It is a move towards a more supportive trading platform for the physical movement of goods between both the countries. Other openings were with regard to Pakistanis being allowed to invest in India,although much needs to be worked out on how this will take place as well as on the offer by India to export 5000 MW of much-needed electricity to Pakistan. Discussions about setting up bank branches have also moved forward,as have those on reducing the negative list in place for trade. By all accounts,many promises have been made,some previous ones fulfilled. Over the last year,there has certainly been far greater progress albeit slow,cautious,tentative than there has been in the last three-and-a-half years.
A few days before the Delhi exhibition,the Pakistani government announced a negative list of 1,209 tariff lines,in accordance with the cabinets decision to complete the phasing out of the negative list by December,following the granting of MFN status to India. With the land route now being given greater importance,discussions are to take place to remove existing restrictions on items permitted to be imported through the land route. The purpose is to permit items not on the negative list to be traded across the land border at Wagah-Attari. With the exception of around 1,200 items,Pakistan now allows import of all other Indian goods,although only about 135 items are allowed through the land route. If the pace and the nature of dialogue and action continue,the current level of trade between the two countries,at $2.6 billion,is expected to grow to around $8 billion in the next two years.
The opposition to trade and better relations with India comes not only from the noisy fringe element of the LeT or the Difa-e-Pakistan rallies,apparently supported by some sections of Pakistans secret establishment,but surprisingly even from the so-called liberal elements. Much has been said and written by uninformed people,even in the English press,about how opening up trade with India will destroy Pakistans economy. There is much ignorance about the benefits of trade and peace.
Beginnings have been made so many times before,followed by horrific events which have set things so far back,that all hope for better relations evaporate,and hostility and war cries become the only response. Perhaps being slow and cautious,but committed and firm,is the best way forward.
The writer is a political economist based in Karachi. He is also a visiting professor at Columbia University,US
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