LAHORE: Pakistan has linked the phasing out of its negative list by December 2012 with the removal of non-tariff barriers (NTB) by India.
"Pakistani cabinet took a historic decision on February 29, 2012 of reducing negative list to only 1,209 items. However, the cabinet decided that this list will be phased out by December 31, 2012 provided India assures level playing field for Pakistani traders," said federal commerce secretary Zafar Mahmood.
"My task really starts now, said Mahmood while delivering the keynote address at the 2nd Aman Ki Asha Indo-Pak Economic Conference, a joint initiative of the Jang Group and Times of India, which started here on Monday.
Speaking at session-II of the conference titled 'Take Off: Converting Promise to Potential; Mahmood in his speech on 'Opening Markets for Pakistan' said, "our friends in India can do a lot in ensuring level playing fields for traders hailing from the other side of the border". He said several such opportunities had been lost in the past due to inconsistency in negotiation and other factors. In order to capitalise on present advancement in negotiation between two nations, he observed, "We are going to open trade talks to tap real potential of bilateral trade. I find a lot of sincerity in our Indian friends and counterparts to move ahead in right direction".
He was of the view that India had given concessions in trade to all countries in South Asian Association for Regional Cooperation (SAARC) except Pakistan and Sri Lanka. India has trade relations with Sri Lank as it signed a free trade agreement (FTA) with it.
Talking about facilitating bilateral trade, he said, India can give special treatment to traders of Pakistan in line with existing global trade rules under World Trade Organisation.
A concession can be given to Pakistan bilaterally that would not be obligatory to pass on to the other country as well. "We can get advantage of this legal provision of WTO and I sincerely hope that my counterpart in India would be able to convince their government about this issue. India is a big country and a big country needs to have a large heart as well," he observed. Referring to the history of trade relations between the two nations, the commerce secretary said that Indo-Pak relations had been termed parallel to USA-Canada ties on the eve of partition. In this background, trade continued between two nations even during uneasy early post-partition period when tension on other issues were high.
Regarding progress on trade-related issues in the last couple of decades, Mahmood said, India abolished negative list in 1995 but trade could not be initiated. Business circles were talking about non-tariff barriers imposed by India that hinders cross border deals, asking for level playing field for traders.
"It was my own conclusion after going through outcome of bilateral negotiation that concluded couple of years back. It was realised lately that something drastic would have to be done to kick start trade between the two countries," he maintained. For this purpose, he said, "I decided to take guidance from the local private sector. From January 2011 to April 2011, I visited all main cities of Pakistan to get feedback from business community about bilateral trade relations. I participated in functions arranged by almost all major chambers not once but twice to get an insight into minds of business community regarding trade relations with India. After completing consultation with business community, we started talks on trade issues with India," he added.
Talking about NTBs imposed by India, he said, at time custom authorities imposed double duty on consignment dispatched to Mumbai. In order to avoid such treatment, he added, one leading exporter from Pakistan had been left with no option but to bypass Mumbai by opting direct but costly air route to Delhi for delivering his consignment.
To address such issues, he said, Pakistan signed several agreements with India including Custom Cooperation Agreement and Mutual Recognition Agreement. This exercise was aimed at addressing trust deficit between the two nations.
He said one of the prime reasons of this trust deficit was successive in confronting attitude of India in recent years. Pakistan got concessions from European Union in 2001 while India started opposing this move and kept it opposing for three years and finally we lost this case. Again following massive floods of 2010, India opposed European Union move of granting duty concession to Pakistan for its export.
He continued to say that trust deficit would not end if India continues to oppose Pakistan at different international forums. After making hectic efforts, he said, India resorted to withdraw its opposition.
After making concerted efforts, now India import regulators are constantly in touch with Pakistani exporters for facilitating mutual trade. Following such efforts, now a lot of trust deficit is no more there, he said.
Session chair, Hussain Dawood, who is also the chairman of Dawood Group and Engro Corporation, said presence of real luminaries of business and trade from both India and Pakistan here at Economic Conference is a great honor for us. These prominent personalities did commendable services in their respective countries for economic development. He added that such efforts ultimately contributed in poverty alleviation as well.
Talking about relations between India and Pakistan, he said, "Unless we have a shared vision and work together to change sentiments about each other, we could not succeed in this regard".
He added that "we must influence our respective governments, media and academia in order to improve bilateral ties". These efforts will also help in effectively facing challenges, if any, in future, he maintained.
Speaking on the occasion, Vice President Confederation of Indian Industry (CII) Ajay Shriram has said that besides genuine trade barriers, unawareness about the Indian import regime is a major reason for the difficulties faced by Pakistani exporters to India.
He said CII has raised many issues to remove impediments to trade between the two countries. He said there is a general lack of awareness about each other's trade activities. He said there is a fear of investment safety. He said proper trade route for exports is an issue that can cut down cost. There is a need to open multiple air routes instead of current restricted flight routes, he added.
Shriram said both countries should allow opening of banks from their respective countries. Pakistan, he added, should allow transit of Indian goods to Afghanistan. He said India's edge in information technology (IT) could be exploited to the benefit of Pakistan where large English speaking population could be engaged by the Indian IT sector for mutual benefit of people of both countries.
Textile sector entrepreneur Bashir Mohammad Ali said that though there is a trust deficit between the two countries, trade between the two countries continues to flourish- however, mostly through undocumented channels.
He said there are many anomalies in Indian trade regime. Bangladesh, the second largest exporter of apparel after China, has been accorded preferential treatment in India while Pakistani textiles are subjected to 35 percent duty. He said textiles from Pakistan still enter India through informal trade depriving the Indian government of the revenues. He said the same was happening with Indian goods coming to Pakistan which has been rectified after Pakistan abolished the positive list.
Ali said that China, the largest global textile exporter, would opt out of the textile trade by 2030 leaving a huge $350 billion apparel market open for grabs. Pakistan and India could capture a major chunk of this trade if they strengthen their strong textile sectors through mutual trade, he said.
Former president of CII Sunil Kant Munjal said the ice has just started melting and would gain momentum if the interaction between the two governments and private sector increase their interaction and discuss the real issues. He said after the opening of economy, many Indian companies have gone global and there is no reason that why they could not do it here. "The government only needs to facilitate us and the rest can be carried out by the private sector," he said.
"Pakistan is sitting on the epicenter of the world as trade is shifting towards the region where it is located" said MCB Bank chairman Mian Mohammad Mansha. He said, "we have borders with China and India, two of world's largest growing economies. Central Asian countries, he added, are at the same air distance as is Lahore from Karachi.
He said both governments should get together to remove the trade hurdles. He said private sector should act as pressure group. "We have done so in Pakistan and have brought all the major political forces on board in this regard" he said, adding that he even convinced the agencies about the benefit of regional trade for Pakistan. He claimed that property values in Lahore would double as soon as free trade with India becomes practical. He said instead of opening two or three trade routes, the entire border between India and Pakistan should be opened for trade.
"We should not worry about the trade deficit with India as long as the economy is growing," he said. Pakistan needs to grow at 8-9 percent per annum like India and China, he said, adding that for this, the size of the government has to be very small.
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