"We will not let the rulers declare India our favourite country" declares a graffiti tag on Kashmir Road in Karachi. This public service message was presumably brought to us by the Difa-e-Pakistan Council, if the attribution (which was in the same color of spray paint) is to be taken at face value.
The misinterpretation of most favoured nation as favourite nation is rife. Even as delegations have poured across the Pakistan-India border in recent months and there have been sporadic embraces at the highest level such as President Zardaris trip to Ajmer Sharif; the rhetoric against better relations with India is deafening.
While political point scoring continues on both sides of the issue and the border, policy debate must not be compromised and the liberalising of trade has to be phased in a manner that is cognizant of the potential risks to this process. This is the thrust of "Managing India - Pakistan Trade Relations", a paper presented at the Woodrow Wilson Centre Conference on India-Pakistan Trade, in Washington, last month.
The major industrial sectors of Pakistan appear to be in support of easier trade with India, with the exception of some such as pharmaceuticals, automobiles and paper and board. At the moment, out of 1,209 items on Pakistans negative list, 614 items belong to these three industries. Besides these industries, the impact of trade liberalisation on the SME sector remains a wildcard.
Dr Ishrat Husain, the author of the paper mentioned earlier, has stressed that "managing transition from the positive to negative list is quite critical to the future evolution of the relationship (between the two countries)." Viewed in the context of popular rhetoric misguiding public perceptions of trade liberalisation, it becomes evident that image management and media management is also crucial for both governments.
While the Indian government must be persuaded to implement temporary, voluntary export restrictions to ensure that Pakistani markets are not flooded, the Pakistan Government should also be more vocal about the potential advantages to this economy.
A recent report co-produced by the PIDE, the Asia Foundation and CUTS highlights that "can count on savings of about $206.18 million each year, if just 44 items currently on the countrys sensitive list are allowed to be imported freely from within the region". Whats more, the consumers of pharmaceuticals will be the single biggest beneficiaries of such a relaxation.
Clearly, there are potential risks to local industries and the liberalisation of trade with India will produce losers as well as winners on either side of the border. However, given that trade in this region had prospered for centuries prior to the independence of Pakistan, it is evident that the consumers of the subcontinent will be the biggest gainers.
It is this bounty that should be considered a key deliverable to the people of this region and both governments would do well to keep their eyes on this prize.
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