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Editorial

April 30, 2011

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Beginning anew

Beginning anew
India will have to wait a little longer to get the “most favoured nation” (MFN) status from Islamabad, and New Delhi will take time removing the non-tariff barriers which fetter the growth of Pakistani exports in the Indian market. No one expected any dramatic announcements following the April 27-28 Pakistan-India secretary-level talks on trade that remained suspended for more than two years in the wake of the Mumbai 2008 carnage. After the bitter deadlock on the issue of terrorism, it is not just natural but also in line with diplomatic norms that the two countries tread slowly and carefully toward the goal of normalising relations at the start of a reengagement process. The foremost challenge is that of building trust. This can only be done through a slow and delicate process that starts with setting down rules of engagement, restating previously stated positions and deciding upon a roadmap for removing obstacles, issues and irritants bedevilling relations between the nuclear-armed South Asian neighbours.
If judged by this parameter, the two-day trade talks have not ended in failure but have achieved more than we could previously have expected. The first piece of good news is that the two sides have agreed in principle to remove restrictions on cross-border trade and to achieve this, they have decided to put in place an institutional framework. That’s what we can call setting the goal right. The second piece of good news is that Pakistan has decided to move to the “negative list” from the existing “positive list” of 1,946 items which could be imported from India. This should be seen as a first step toward granting MFN status to India, which has been a long-standing demand of, not just New Delhi, but also of a big section of the Pakistani business community and economic experts. On the issue of non-tariff barriers, which block an increase of Pakistani exports to India despite the fact that the country enjoys MFN status by India, the Indian delegation has assured Pakistan of “corrective measures”. The decisions, including expansion of trade through the Wahgah-Attari land route, easing and harmonising customs operations, allowing investments, facilitating bank operations and prospects of initiating trade of petroleum products and electricity – are all steps in the right direction.
Despite all the mistrust and a history of acrimony between the two countries, trade and economic ties are one front where quick gains remain possible. Public opinion as well as most interest groups – both in Pakistan and India – support greater economic and trade cooperation which offers a win-win situation for all. It is time for the leadership of the two countries to seize the moment and aggressively push for building bridges of trust and mutual self-interest through trade cooperation, which in turn may work as a catalyst for peace and prosperity in the entire region. The small steps taken in the trade talks appear to be a perfect new beginning to the process of reengagement. They offer hope and promise bigger gains in the future.
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