India,Pak begin first trade negotiations post 26/11 attacks

The start of the talks was delayed by a few hours as the Indian team arrived in Islamabad from Lahore very late last night,officials said.

Both sides said they had an open agenda for the two-day talks,following which a joint statement is expected to be issued on Thursday.

Commerce Minister Makhdoom Amin Fahim hosted a dinner for the Indian delegation following the conclusion of today’s parleys.

In his opening remarks at today’s meeting,Mahmood said improving trade would economically benefit both countries and the region.

Both sides had held four rounds of trade negotiations during 2004-07 under the composite dialogue process,and are now open for talks on all issues of mutual interest,he said.

“Pakistan understands that there is a great potential to further increase bilateral trade,” Mahmood said.

He expressed the hope that the fifth round of talks will help boost trade and lead to peace in the region.

“We are determined to make the fifth round of talks successful and fruitful,” he remarked.

“I believe that this meeting will take the dialogue process forward and by the end of the meeting,all issues related to facilitation and promotion of bilateral trade can be addressed with consensus,” Mahmood said.

Khullar said,”We are here for talks to further boost our mutual trade and economic relations. Pakistan and India can resolve their issues through the process of dialogue and we are here with this spirit”.

Referring to the break in talks in the wake of the Mumbai attacks,Khullar said,”This is a process that was interrupted and that must resume and go on.

It must acquire significantly fast momentum if only to catch up for the time that we have lost”.

India is “ready and willing” to move forward and its “only perspective here is one of constructive engagement to move the bilateral trade agenda and commercial agenda ahead and fast”,he said.

Pakistan’s High Commissioner to India Shahid Malik and India’s envoy to Pakistan Sharat Sabharwal also participated in the talks.

Indian officials said the talks would focus on better coordination and establishing systems that would boost bilateral trade in compliance with multi-lateral and regional obligations like the South Asian Free Trade Area pact.

Pakistan’s concerns,including an incorrect perception that India is imposing Pakistan-specific barriers,were expected to figure in the talks,the officials said.

Pakistani sources said their side was expected to raise the issue of India’s opposition to the approval of a European Union trade package for Pakistan at the Geneva-based WTO.

The package,aimed to help Pakistan cope with the effect of last year’s devastating floods,will be taken up for consideration at the WTO early next month.

The two sides are also expected to discuss India’s offer to export electricity and petroleum products to Pakistan.

Pakistan’s refusal to grant India the Most Favoured Nation-status notwithstanding,the Indian side will focus on moving trade away from Pakistan’s “positive list” approach to a “negative list” approach,sources said.

Moving to a “negative list” or a limited list of items barred from trade will allow both sides to expand exports,they said.

India accorded MFN status to Pakistan in 1996.

The average annual Pakistan-India trade volume is around two billion dollars. A total of 1,946 items are being traded between the two countries.

However,total trade has fallen from over 2.2 billion dollars in 2008-09 to about 1.5 billion dollars in 2009-10.

Informal trade through third countries like the UAE runs into billions of dollars.

The ‘Dawn’ newspaper quoted an unnamed Pakistani official as saying that the Petroleum Ministry had proposed that MFN status should be granted to India to facilitate import of petroleum products and export of cement and chemicals.

Oil imports would be conditional to India facilitating export of Pakistani cement and chemicals without any barriers,the report said.