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Pakistan-India trade agreement


On the sidelines of a SAARC business conclave in New Delhi, the Commerce Ministers of Pakistan and India, Khurram Dastgir Khan and Anand Sharma respectively, arrived at an agreement to allow round-the-clock movement of trucks and containers through the Wagah-Attari border crossing, with trucks allowed to offload their cargo in Amritsar and Lahore rather than at the border. The agreement represents a thaw or turnaround in the tense relations between the two countries since trouble flared up on the Line of Control (LoC) since the beginning of 2013. That tension has recently abated because of meetings between the Directors General Military Operations of both sides as well as brigadier level exchanges. The agreement also recognizes the need to implement a more liberal visa regime for businessmen if trade is to be enhanced. In financial year 2012-13, that trade was barely $ 2.5 billion, against the estimated potential of $ 10 billion. Islamabad missed the December 31, 2012 deadline for abolition of the negative list, comprising 1,209 items that cannot be imported from India. Nor has it so far reciprocated India’s extension of Most Favoured Nation status to its neighbour. Instead, Pakistan has decided to offer India non-discriminatory access to its market, provided this is reciprocated by the other side. In addition, both countries have agreed to push forward on granting three banks of either side permission to open branches in the other country. They have further agreed to convene meetings of technical working groups of customs, railways, banking, standards organisations and energy. The Joint Business Forum Chief Executive Officers of companies of both countries will be convening meetings of its sub-groups on diverse sectors such as textiles, tourism, energy, engineering, pharmaceuticals and others. Mid-February promises a great deal of interaction. First and foremost, the third meeting of the Joint Business Forum will take place in Lahore at that time. The Indian Commerce Minister, Anand Sharma, is expected to lead a business delegation to Lahore at the same time. The Federal Chamber of Commerce and Industry and the Trade Development Authority of Pakistan are planning an “India show” in Lahore on or around those dates to build on the success of a similar India show in Lahore in February 2012. As part of the show this year, artists from both countries will jointly create paintings expressing the common heritage of the people of both countries. So Lahore next month offers much in regard to promoting trade and business between the neighbours, an effort that has once again acquired momentum after a hiatus of more than a year.
While these developments are welcome since the economic advantages of freer trade and investment in each other’s countries by the business houses of Pakistan and India are obvious, unfortunately anything related to the two countries cannot and should not be taken for granted. To illustrate, the barter trade across the LoC between the two sides of Kashmir has been suspended after Indian authorities accused a Pakistani truck arriving from Azad Kashmir of carrying heroin. The truck has been seized by the Indian authorities and the driver arrested. Meetings between the officials of both sides to resolve the matter according to the Standard Operating Procedures for the trade have failed despite the arrest in Azad Kashmir of the owners of the truck in question. The Pakistani authorities want the truck and its driver returned to be tried in Pakistan, while the Indian authorities are insisting that since the offence took place on the Indian side, they would deal with the matter according to their own laws. Until the matter is resolved, trade remains suspended and 49 trucks from Azad Kashmir and 27 from the Indian side remain blocked, along with their drivers, etc. The need is for the higher authorities to intervene and sort out the matter in the interests of restoring the trade and freeing the involuntary ‘guests’ detained by either side. This latest incident, if added to stories of Indian traders being harassed on spurious grounds for importing goods from Pakistan and the incessant penchant for both countries to tumble into confrontation at the drop of a hat, indicates the shoals and reefs ahead. Both countries should take a leaf out of China’s book and understand that where countries, particularly neighbours, face intractable long standing problems, the ‘doable’ should be prioritised, amongst which trade and business relations pave the way for progress on other issues.  *

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Aaj Kal