Negative list violation of WTO obligation: Cabinet informed

Federal Cabinet has reportedly been apprised by the Secretary Commerce Zafar Mahmood that India-specific negative list is a violation of the World Trade Organisation (WTO) obligation which was the basic arguments he gave to defeat his counterparts in other ministries, well-informed sources told Business Recorder.
Ministry of Industries and Ministry of Textile Industry were the main opponents of early phasing out of negative list without weighing up the impact of existing trade between the two countries. On February 29, 2012 Cabinet Secretary, Nargis Sethi, in her compliance report informed the Cabinet that necessary meetings had been held with all the relevant ministries/divisions including Ministries of Industries, Textile Industry, Production and National Food Security. This resulted in finalising a list of 1209 items which represents consensus of all stakeholders.
According to official documents, the Cabinet was briefed that the 5th round of talks for normalisation of trade relations with India was held during the tenure of the present government as a follow-up of the Cabinet decision of 2nd November 2011 "to normalise trade relations with India." The Ministry of Commerce spearheaded the process of trade normalisation for grant of Most Favoured Nation (MFN) status to India. During the 6th round of Commerce Secretary level talks held on 14-16 November 2011, at New Delhi, it was agreed that the process of normalisation of trade relations will be phased. First, the negative list would be announced by February 2012 and then it would be phased out after Cabinet''s approval by December 31, 2012.
This process of formulation of negative list began in April 2011 and was based on extensive consultations which included both public and private sectors. A revised list of justifiable items was included in the negative list, culminating into 1335 lines initially.
The Cabinet was further informed that for the sake of academic neutrality and transparency, Institute of Business Administration (IBA) Karachi was assigned the task of examination of the proposed list/tariff lines which prepared a final negative list of items while not recommending 699 tariff lines for inclusion. To obviate the possibility of exposing the local industry to shocks, trade defence laws are operative in the country (including National Tariff Commission Act, 1990, Antidumping Duties Ordinance, 2000, Countervailing Duties Ordinance 2001 and Safeguard Measures Ordinance 2002). Brotherly countries like Turkey have imposed such safeguard measures even against Pakistan particularly in the textile industry.
It was explained that in line with the principles of being a free trading country and complying with Safta concessions agreement, the negative list has to be phased out with India as per the given deadline of December 31, 2012. Additionally, under the WTO law, it is obligatory for Pakistan to adopt a non-discriminatory approach towards all members. Therefore, India-specific negative list remains a violation of the WTO obligation.
Regarding the difference of opinion on the timeline for the phase out period of the negative list, the secretary commerce explained that the process of trade normalisation should be completed by the end of 2012, as even if only one item remains in balance in the negative list it would negate the MFN basis of trade. Thus opening up of the Indian market for Pakistani businessmen would generate up to $369.76 million and Pakistan should take advantage of it. It would also result in drop in prices particularly for medicines and vaccines as they are cheaper in India. Besides the economic advantage accruing from such a process of normalisation of trade the flexibility would be appreciated globally as a positive step towards peace in the region.
The Cabinet decided in principle to make appropriate changes in the trade defence laws in consultation with the stakeholders to allay apprehensions of the industrial sector for using these laws more effectively against any unfair practices or injury to local industry by Indian imports.
Cabinet also decided that phasing-out of the negative list, with the timeline of 31st December 2012 in principle is subject to further progress regarding provision of level playing field for Pakistan''s exports to Indian markets. Ministry of Commerce would bring the case for complete normalisation of trade relations with India to Cabinet for approval after further negotiations with India.
The Cabinet directed that the citizens may be educated on the benefits of the normalisation of trade relations between the two neighbours through a media campaign and seminars, etc, by Ministries of Commerce and Information and Broadcasting.