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Updated: April 29, 2011 03:49 IST

India, Pakistan agree to explore new avenues for bilateral trade

Anita Joshua
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An Indian truck crosses into Pakistan at the Wagah border post. After two days of talks, Commerce Secretaries of both countries on Thursday agreed on a slew of measures to boost bilateral trade. File photo
An Indian truck crosses into Pakistan at the Wagah border post. After two days of talks, Commerce Secretaries of both countries on Thursday agreed on a slew of measures to boost bilateral trade. File photo

In a spirit of accommodation anchored in pragmatism, the Commerce Secretaries of India and Pakistan on Thursday agreed to take on board each other's concerns regarding the trade regimes in either country and explore new avenues for bilateral trade while side-stepping the ‘so-called' ticklish issues that dominate mainstream discourse.

After two-days of deliberations, a detailed joint statement was issued setting a timeline for addressing the identified doables including Pakistan granting the Most Favoured Nation (MFN) status to India and moving to a negative list approach in tariff lines, and New Delhi amenable to addressing Islamabad's concerns regarding Non-Tariff Barriers that restrict the flow of Pakistani goods into India.

Briefing the journalists, Pakistan's Commerce Secretary Zafar Mahmood said the difference between the previous four rounds of talks on Commercial and Economic Cooperation was that this time the effort has been to create institutional mechanisms and prepare a road map to make the process “irreversible and structured.”

Complementing his counterpart's statement, Indian Commerce Secretary Rahul Khullar said, both sides consciously sought to break from the past while preparing a timeline for the measures that need to be taken to create an enabling environment for bilateral trade to realise its full potential.

Trade on electricity

A major new initiative proposed pertains to trade of electricity between the two countries. The two sides decided to set up a group of experts to examine the feasibility, scope and modalities of such trading. The composition of the group will be finalised by June-end and its first meeting has been scheduled by October.

Another group of experts will examine a similar proposal for trade in petroleum products including building cross-border pipelines and use of the road/rail route including the Munabao-Khokrapar route for this purpose. A third new proposal pertains to trade in Bt cotton seeds that would help Pakistani farmers and the textile industry raise cotton yields and ensure better cotton security.

The joint statement also mentions exploring the possibility of entering into a mutually agreed preferential trade arrangement to promote trade by extending tariff concessions on products of export interest to both countries. This was proposed by Pakistan but since this is an issue to be decided by the Trade and Economic Relations Committee, the Indian side did not make any commitment. Also, India's contention is that Pakistan should honour its existing international commitments like granting the MFN status to India as per the Agreement on South Asian Free Trade Area first before exploring new trading regimes.

Asked if India agreed to give up its opposition to the European Union package for Pakistan to help tide part of the losses faced by its textile sector owing to last year's floods, Mr. Mahmood said this was not flagged because it was not a bilateral issue as such. “It was a package formulated by the EU and it was the EU which took it to the World Trade Organisation Committee and it will be defended by them. We have approached India in the past and would like India to support us.”

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