Most favoured steps

Trade offer indicates a reversal in Pakistans attitude. India must clinch the opportunity

In a decision that will significantly boost bilateral trade,the Pakistan cabinet has cleared the way for giving India most favoured nation status. While India granted Pakistan MFN status in 1996,Pakistan had failed to reciprocate,linking normalisation in trade to movement on other issues,especially Kashmir. Yet,the move,by which bilateral trade is expected to increase manifold from the paltry 2.6 billion at present,signifies more than a long-desired reciprocity and is a welcome strategic development. It marks a reversal of the Pakistan establishments reluctance to trade with India that dates back to the 1965 and 1971 wars. In fact,Pakistan Information Minister Firdous Ashiq Awans announcement indicated a rethinking of the terms of engagement with India by emphasising that the military is on board. This is,potentially,a big breakthrough. In the past,the so-called confidence-building measures have tended to be compartmentalised,with Rawalpindi keep-

ing aloof and depriving the peace moves of sufficient traction. India must therefore seize this moment.

MFN status ensures fair market access for exports for instance,at present India can export almost 2,000 items to Pakistan,but about 20,000 have to be routed through a third country. According to an industry estimate,removal of tariff and non-tariff barriers could triple trade within five years. Yet,Wednesdays announcement must be seen as part of the trade normalisation process. In this Pakistans delivery on the MFN potential is just one component. India too needs to respond by showing its commitment to realising fair trade there are innumerable tariff and non-tariff barriers that must be addressed,and it is in Indias national interest to be large-hearted,not least because the trade deficit is in its favour. Opening up the Indian market for Pakistani exports makes both economic and strategic sense in integrating the subcontinents northwest.

In her statement,Awan said: This was a decision taken in Pakistans national interest and all stakeholders,including our military and defence institutions,were on board. Prime Ministers Singh and Gilani must clinch the moment by announcing new moves when they meet at the SAARC summit next week: not just by addressing issues related to visas and transportation links implicit in improving bilateral trade but also by using this momentum in the peace process to consider the next moves on various other tracks,like Sir Creek and transit rights through Pakistan.