Ahead of the meeting of the Commerce Secretaries of India and Pakistan on Wednesday, Prime Minister Syed Yusuf Raza Gilani on Tuesday said Islamabad wanted to move towards comprehensive and broad-ranging engagements with India on the basis of “equality, mutual trust, mutual interest and mutual respect.”
Mr. Gilani made these remarks at a meeting with Foreign Secretary Salman Bashir and Commerce Secretary Zafar Mahmood during a briefing on the agenda for the bilateral engagement in Islamabad.
Both sides were tight-lipped about the agenda for the meeting but India expects Islamabad to raise Indian objections that are stalling the World Trade Organisation's approval for trade concessions granted by the European Union for a year to Pakistan to help it tide over the difficulties caused by last year's floods.
India's contention is that there is no guarantee that the waiver will benefit the flood-affected. Also, India is of the view that it will set a precedent. Though India, Bangladesh and Peru are blocking this in the WTO Committee, Pakistan believes that if New Delhi withdraws its opposition, the other two countries will come around.
India will urge Pakistan to switch to a sensitive/negative list approach in keeping with the Agreement on South Asian Free Trade Area (SAFTA) signed in Islamabad in 2004. Stating that the SAFTA does not provide for a positive list approach for imports between member countries, Indian High Commissioner in Islamabad Sharat Sabharwal has time and again spoken about the need for Pakistan to give up the positive list approach vis-à-vis India as a result of which only 2,000 items can be imported from India.
As for the Non-Tariff and Para-Tariff Barriers — technical standard certification, standard of quality, labelling, marking, packaging, sanitary and health regulations — in India that Pakistan complaints about, the Indian counter is that these requirements are not specific to Pakistani exports but applicable to all of India's trading partners.
Another issue likely to come up pertains to India's offer to sell power to Pakistan at cheap rates. That such an offer had been made by New Delhi was disclosed last week by Mr. Mahmood. At the SAARC summit in Thimphu last year, India proposed the preparation of a road map for developing a SAARC Market for Electricity on a regional basis to facilitate electricity trading.
Bilateral trade between the two countries hovers around $2-billion mark but studies show this to be way below potential. A study conducted by Pakistani economists for the Planning Commission last year said bilateral trade had the potential to grow to $10 billion. More importantly, improved relations between the two largest countries in South Asia would benefit others in the neighbourhood and help the SAARC realise its full trade potential.