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Updated: March 1, 2012 23:42 IST

Pakistan to switch to negative list for trade with India

Anita Joshua
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An Indian porter (left) hands over a sack of garlic to a Pakistani porter at the Wagah-border check post. File photo
An Indian porter (left) hands over a sack of garlic to a Pakistani porter at the Wagah-border check post. File photo

This will pave the way for granting MFN status

After considerable dithering, Pakistan on Wednesday decided to switch to the negative list approach for trade with India and phase it out completely by December-end. Giving its approval to the long-pending decision, the Cabinet also cleared a 1,209-strong negative list of items in which bilateral trade is barred; thereby opening up business opportunities in an estimated 6,850 commodities against the 1,900-odd items now traded.

Information Minister Firdous Ashiq Awan said all stakeholders, including the naysayers — Textile and Industry Ministries — were on board and the decision to normalise trade with India was unanimous.

This paves the way for granting the Most Favoured Nation (MFN) status to India as mandated by World Trade Organisation (WTO) commitments from next year onwards; thereby removing the discriminatory trade regime that Pakistan has had for India. India granted MFN status to Pakistan in 1996.

Given the sensitivities attached to the term MFN — which many here call Most Favourite (sic) Nation and in Urdu translates as sabse pasandida mulk — the Minister did not once refer to the WTO terminology except when asked a specific question.


Till earlier this week, there were apprehensions that Pakistan may once again miss the self-imposed timeline it had announced for switching over to the negative list. Earlier, Indian officials were given to understand that the switchover would be announced during Commerce Minister Anand Sharma's visit mid-February. However, that decision was deferred as all stakeholders were not on board but during the visit itself the Indian side was assured that the switchover would be announced by month-end.

Initially, the Commerce Ministry had proposed a shorter negative list of just over 600 items. However the Industry Ministry appears to have had its way by getting nearly double that number in the protective list. And, for now, the Commerce Ministry has managed to weather the demand for staggering the normalisation of trade relations with India over five years.

Cross-LoC trade

As to whether normalisation of trade with India would tantamount to a dilution in Pakistan's position on Kashmir, the Minister said the matter was discussed in the Cabinet with Prime Minister Syed Yusuf Raza Gilani pointing to the Cross-Line of Control trade between the two Kashmirs.

Stating that 14,000 trucks had crossed over since the Cross-LoC trade began, Mr. Gilani's contention was that when the two main stakeholders in the ‘dispute' were engaged in trade, why should the rest of Pakistan not benefit from bilateral trade.

Pakistan decided to grant MFN status to India in early November 2011 but there has been considerable resistance to the move from within and outside the business community.

While some sections of the business community fear that cheaper Indian goods would swamp the domestic market, religious right wing organisations — led by Jama'at-ud-Da'wah leader Hafiz Saeed — sought to invoke traditional suspicions about India and its intent.

Increased trade is beneficial in many ways, none more important than it creates more people with vested interests in better relations. This then counters the folks on the other side of the fence who benefit from antagonistic relations. Win-win for both countries..

from:  Zulfiqar Khan
Posted on: Mar 1, 2012 at 20:55 IST

If you involve commerce, most of your animosity will take a back seat
automatically. Both these countries should have done this long back.

from:  Mahesh
Posted on: Mar 1, 2012 at 16:01 IST

why do bangladesh and others sit quiet. start trade, better express
your aggression in trade than wars. The current world is fighting in
trade but not with weapons. We are copying the west since ages. let's
start this one too.

P.S: after India agreeing to FDI, our friends pakistan also want to
have the same benefits by taking this first step of MFN, the next
coming moves will be interesting to watch.

from:  vijayakrishna
Posted on: Mar 1, 2012 at 14:57 IST

Its very heartening to see cross border trade between India and Pakistan
growing.Negative list should also go in some time but its a nice

from:  vikas
Posted on: Mar 1, 2012 at 12:27 IST

Enmity between India & Pakistan has been largely exaggerated for
political motives rather than anything else. It is in common interest of
both these nation that the relation between them get neutralized.This move of increased trade is a step in the right direction. Such things should continue and also should be hoped for in the coming days.

from:  Kasi Viswanath
Posted on: Mar 1, 2012 at 12:09 IST

Wat a photograph...their faces are reflection of the kind of hard work they do. The weight and the wage will be same for them whether they lift a commodity in negative list or from positive list.I salute the hardworking people from both sides of the borders. I hope that things get better for these people also with these trade relations.

from:  Rohini
Posted on: Mar 1, 2012 at 11:42 IST

This move will strengthen the ties between both the countries. Its a positive development and more such developments should be encouraged. The photo with article speaks a lot for itself.

from:  Deepti Gupta
Posted on: Mar 1, 2012 at 11:30 IST

Trade is a much potent medicine to control the so called patriotic feelings propagated by vested interests in war between neighbours.It benefits all and the prime need of the people are very basic, food,affordable housing, health,education and gainful employment

from:  Atis
Posted on: Mar 1, 2012 at 09:50 IST

nice photo with the news. Shows the simplicity of people on both sides.

from:  Sameer
Posted on: Mar 1, 2012 at 09:14 IST

Finally, Pakistan is opening up for trade with India. It is a good start to normalize the trade relation between India and Pakistan. But the Kashmir issue and other border issues remain unresolved. There is no reduction in terrorist attack attempts on India from Pakistan terrorists or Indians trained as terrorists in Pakistan or Indian terrorists financed from Pakistan. Both governments have to cooperate and coordinate to stop terrorism in India. The cross border attacks has been reduced by the cooperation of the border security forces of both countries. The infiltration of Pakistanis to Indian side is also substantially reduced. The tensions between the two countries is slowly going down and the opening of the trade between the borders will hasten the peace in the sub-continent. Pakistan Prime Minister Gilani deserves congratulation for the bold step. Now India can compete with China to win not only market but also the heart and soul of the people of Pakistan.

from:  Davis K. Thanjan
Posted on: Mar 1, 2012 at 08:17 IST
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