A day ahead of the Commerce Minister-level engagement with India, Pakistan's Cabinet on Tuesday deferred a decision on switching to a negative list approach for trade with India from the present restrictive positive list.
Failure to take all stakeholders on board was cited as the official reason for deferring the decision. Briefing mediapersons after the Cabinet meeting,
Information Minister Firdous Ashiq Awan said the Textile and Interior Ministries had reservations as a result of which Prime Minister Syed Yusuf Raza Gilani decided to defer the matter with instructions to the Commerce Ministry to do its ‘homework'.
Meanwhile, the Cabinet has given its approval to the drafts of the three memoranda of understanding (MoU) to be signed with India at the bilateral meeting in Islamabad on Wednesday.
The three MoUs are Cooperation and Mutual Assistance in Customs Matters Agreement, Bilateral Cooperation Agreement on Mutual Recognition between Pakistan Standard and Quality Control Authority and Bureau of Indian Standards, and Agreement on Redressal of Trade Grievances between Pakistan and India.
These three MoUs are aimed at streamlining trade between the two countries. They seek to remove irritants that have prevented bilateral trade from realising its potential.
However, with Pakistan continuing with the positive list approach, the MoUs merely tweak the process as trade will continue to be restricted to 1,961 items.
In interactions with Indian government officials at various levels ever since Commerce Minister Makhdoom Fahim visited India late last year, Pakistan had indicated that it would switch to a negative list in February and the sensitive list approach mandated by the World Trade Organisation by the year-end.
With this end in view, officials of the two countries have been meeting frequently since then to iron out the other rough spots which have restricted trade between the two countries. However, in recent weeks, hopes of switching to a negative list approach began to fade with the government fighting for survival and several religious right wing organisations getting activated.
The traction that the newly-formed platform ‘Difa-e-Pakistan' — of which Jama'at-ud-Da'wah's Hafiz Saeed is a prominent member — gained in recent weeks with rallies in various cities almost on a weekly basis was a signal that it would not be smooth sailing for advocates of normalizing trade links with India.