Opinion EU lessons to the subcontinent
As the EU demonstrates,trade gives the greatest hope for Indo-Pak peace.
On the 9th May 1950 when Robert Schuman,the then French foreign minister,proposed the European Coal and Steel Community,few could have thought he sowed the seeds for one of the greatest geopolitical triumphs in history. Schuman’s declaration for this institution was not simply a technical attempt to pool industrial resources after World War II,but something whose political repercussions he hoped could ensure peace in Europe after more than 1000 years of continual conflict. As the anniversary of his declaration recently passed,a reflection upon what his seeds have flowered into over the last 61 years is remarkable. The European Union,the descendant of his first spark,has demonstrated to us the unequivocal benefits that trade can bring: peace,stability and the rule of law. Schuman’s aim of making war not only unthinkable but materially impossible through proliferating trade was a resounding success. And from this,lessons exist for the subcontinent today.
Whilst the notion of pooling our resources with Pakistan is of course ludicrous at the moment,the notion of developing trade as a powerful tool of progress is not. Trade is not a panacea,but it is an important solution for stability in what can otherwise seem like a hopeless situation. Secondly it serves our interests in a relationship that is not and should not be seen as a zero-sum game.
The French economist Frédéric Bastiat famously said that if goods don’t cross borders,soldiers will. In a nuclear world,although soldiers may not,state sponsored militants certainly can and have. In dealing with Pakistan,India must of course be tough – yet as the history of Europe shows us,toughness alone leads to very little apart from blood and tension and anger. Through making a real push to bolster trade relations with Pakistan,unlike a thousand condemnations,India can make tangible progress.
A boost in trade could help bring greater reconciliation and stability in two ways. Firstly,through opening up borders,India would help the Pakistani middle classes to prosper,increasing the power of civil society at the expense of the military and government. Poor economic management leading to poor development has resulted in those who can moving abroad,and those who remain feeling a sense of despair. With little else to take comfort in,many even well-educated Pakistanis end up using their internationally relatively powerful military and India-bashing as an opiate. Increasing prosperity would help Pakistan to retain many of those who would otherwise have moved abroad,bolstering civil society,and also show that whilst India-bashing may be an opiate,India can actually be a solution.
Secondly,trade could help reconciliation and stability by alleviating the situation of many rural and small-town poor,who are the natural foot soldiers of many extremist movements. Whilst there are those who join militant groups through ideological fervour,there are also those who join for more bread and butter reasons. In many areas in Pakistan,with little other employment option or opportunity,militant groups have great appeal. This has increased after the floods,when militants did more to help locals on the ground than either the incompetent Zardari administration or the international community (which gave over twice as much to the much much smaller Haiti). Given Pakistan has comparative advantage over India in agriculture and textiles,opening trade could provide employment in those areas. This could strip those who wish to damage India of one of their most valuable resources: the desperate footsoldier. It would show that far from being the great antagonist,India can help.
In addition to greater reconciliation and stability,a boost in trade also has naked economic advantages. With trade having the capability of growing more than tenfold,from a current figure of $1 to 2 billion a year,India stands to gain a lot. Our great competitor of this century,China,has already understood the benefits of tapping into its nearest neighbours as trading partners,as have the Europeans,generating huge prosperity for them. Our comparative advantage over Pakistan in manufacturing would give a huge boost to our exporters. We must always remember that trade is not a zero-sum game we benefit too.
The current steps being taken by Pakistan of giving us ‘most favoured nation’ status are encouraging,although small in real terms. In the short term to keep movement going,although politically difficult,India should look to abolish non tariff barriers to facilitate trade,by reducing the off-putting and time consuming bureaucracy that Pakistanis must go through to trade with us. In the medium term,a tariff elimination programme can be looked at.
And in the long term,who knows. Do I think a free trade area could be created? It’s difficult,yes,and dependent on greater stability,but never say never. If a common market developed into a continent wide 27 nation supranational government,why must it be impossible for trade to develop into a free trade area?
Rome wasn’t built in a day,neither was the groundwork for the Treaty of Rome and neither will the reconciliation process in the subcontinent. And no one knows what the future can hold. Yet on the anniversary of the seed that flowered the European Union,the subcontinent can learn that with small steps in the right direction,the future need not be as scary as it can seem.
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