MFN status to India: Pakistan links implementation to removal of NTBs

Pakistan has linked implementation of the Most Favoured Nation (MFN) status to India''s removal of tariff and non-tariff barriers (NTBs), official sources told Business Recorder. "Federal Cabinet has just given a green signal to ink MFN status with India without any timeframe. However, Pakistan will not move forward in this direction until India takes satisfactory measures to remove NTBs," sources added.
Indian High Commissioner to Pakistan, Sharat Sabharal, who was enthusiastic over Pakistani cabinet''s decision regarding MFN status to his country, met Senior Commerce Minister, Makhdoom Amin Fahim in his chamber in the Parliament House and thanked the Minister for this bold and much needed step. According to sources, Pakistan also wants to sign Mutual Recognition Agreement (MRA) with India, which would bind the two countries to accept certification of each other''s agency. "Such an arrangement will minimise the possibility of use of NTBs," the sources maintained.
According to sources major non-tariff barriers are as follows: (i) visa and travel restrictions; (ii) inter-provincial movement of goods; (iii) limited number of ports and inland custom posts for imports; (iv) customs clearance and customs valuation; (v) state trading enterprises (STEs); (vi) excessive use of trade defence measures; (vii) tariff rate quotas (TRQS); (viii) technical standards and regulations; and (ix) import regulations. The para-tariff/non-tariff barriers in India enhance red-tapism for their application in a trade restrictive manner and deny market access in India to a considerable extent.
India maintains very high tariff on agriculture commodities (average tariff 90 percent) and at the same time composite duties (ad valorem+ specific duty) on textile manufactures, which in some cases exceed 100 percent. Indian Prime Minister, Dr Manmohan Singh, at a meeting with the Pakistani Commerce Minister in New Delhi expressed his government''s willingness to normalise bilateral relations on a fast track basis. Commerce Ministry has already initiated consultation with other stakeholders on merits and de-merits of switching over from positive to negative list of importable items from India.
"Singh had emphasised that instead of delaying grant of MFN status both sides may discuss and address genuine issues and remove apprehensions for normalisation of trade and commerce relations," the sources added. Both sides will jointly work towards enhancing bilateral trade within three years, from current levels of $2.7 billion per annum to about $6 billion.
According to sources Indian Prime Minister argues that Pakistan''s apprehensions that MFN status to India would lead to adverse affects on Pakistan''s indigenous industry is not correct. He assured Pakistani Commerce Minister that India does not want any adverse affect on Pakistan''s economy or industry. Commerce Secretary, Zafar Mahmoood, sources said is expected to leave for New Delhi to lead inter-ministerial delegation which will participate in 6th round of talks on economic and commercial co-operation. Indian team will be led by Secretary Commerce Anand Sharma.
Pakistan and India held 5th round of talks on economic and commercial co-operation at the level of Commerce Secretaries on April 27-28, 2011 in Islamabad in continuation of the negotiations initiated under the composite dialogue in 2004. During this round, both sides agreed to liberalise trade and create an enabling environment for the private sector. The business community of both countries has welcomed the decision of the Pakistani Cabinet.