Commerce, textile ministries'' dispute over negative list not resolved yet

Dispute between the Commerce Ministry and the Textile Ministry over the negative list for India is not settled yet and the textile sector, accounting for 60 percent of total export revenue, fears massive damage to local industry if trade is normalised with New Delhi. Officials in the Commerce Ministry acknowledge that the Textile Ministry did express its reservations over the deal with India but add that the reservations were not backed by a rationale.
"The Textile Ministry just stated that negative list will have a negative effect on textile sector but did not give any justification at any forum," commented one of the officials of the Commerce Ministry. The intensity of differences over the negative list of 1209 items between the two ministries can be gauged from the fact that the Commerce Ministry is yet to get approval of the negative list from the Law Ministry for notification; though the Ministry of Industries has already uploaded the list on its website to facilitate industry.
Commerce Secretary Zafar Mahmood argues that India-specific negative list is a violation of the World Trade Organisation (WTO) obligation which was the basic arguments he gave to convince his counterparts in other ministries. 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 in 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 examining 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).