Breakthrough unlikely in Pakistan-India trade talks

[relativiti]

ISLAMABAD: Top trade officials from Pakistan and India will open two days of talks on Wednesday to push commercial ties, as the countries seek to build on goodwill from last month’s successful bout of “cricket diplomacy”.

While no major breakthrough seems likely, on the table would be an Indian offer to export electricity and possibly sell petroleum products to Pakistan, which is faced with an acute energy crisis, officials say.

“There will not be any dramatic changes, of course, but it can help put things on the right track for further progress,” a Pakistani official familiar with trade negotiations with India, said of the trade talks, their first in nearly three-and-a-half years.

“There is nothing specific on the agenda.”

Trade talks are part of a seven-year-old peace process the two sides agreed to resume in February, after the 2008 attacks on Mumbai by Pakistan-based militants killed at least 166 people and stalled the talks.

“There will not be any substantive gains but any positive development will help to improve the environment, and that is essential to take up contentious issues like Kashmir,” said Hasan Askari Rizvi, a political analyst.

After the last round of trade talks held in August 2007, the two sides added some 136 items to their trade basket – which now contains 1,946 goods – before the Mumbai attacks put the process on hold.

At that meeting, the two sides set a target of $10 billion by 2010. Today, even that seems unlikely, and pledges to open banks on both sides of the border remain only on paper.

CRICKET DIPLOMACY

But a visit in March by Pakistan’s Prime Minister Yusuf Raza Gilani to India at the invitation of his Indian counterpart Manmohan Singh to watch a cricket World Cup semi-final between their teams raised hopes for further improvement in their ties.

After the Singh-Gilani meeting, dubbed “cricket diplomacy”, field hockey officials of the two countries are attempting to renew ties and there is talk of more cricket matches.

“We are optimistic. We are meeting after three, four years, and hope to make progress on decisions made in the last meeting,” said a senior Commerce Ministry official involved in the negotiations. “We will push for a decision on opening bank branches in each other countries.”

Pakistan would also likely discuss European Union plans to temporarily waive duties on some Pakistani imports to help it recover from last summer’s floods, which have been frustrated by opposition from India and other members of the World Trade Organisation.

TRADE VS POLITICS

Trade ties between Pakistan and India were severed after the 1965 conflict.

Commercial relations have since recovered, albeit slowly.

Political differences are the major hurdles.

India granted a Most-Favoured Nation (MFN) status to Pakistan in 1996, but awaits a similar gesture by Islamabad, which has linked progress on trade to progress on political disputes, notably Kashmir, the disputed Himalayan region they both rule in part but claim in full.

Pakistani officials also question the utility of MFN status, given the balance of trade which remains heavily tilted in India’s favour, citing “non-trade barriers” such as quality standards and customs procedure against Pakistani exports.

Indian exports to Pakistan stood at $1.2 billion while Pakistan exports totaled about $270 million in the 2009/10 (July-June) fiscal year.

Unregulated and illegal trade, often routed through Dubai and Singapore, is estimated at between $2 billion and $2.5 billion, officials say.
Breakthrough unlikely in Pakistan-India trade talks | Business | DAWN.COM

 

[muse]

I can't quite understand why some Indian observers point to the fact that India have granted Pakistan MFN -- was there some sort of hue and cry in Pakistan that India do this? So if India has done this, it is not in response to some Pakistani demand and now some Indian observers suggest that in not granting India MFN, Pakistan are somehow in some sort of breach - that's really a bit difficult for me to grasp -- what am I missing about this ?

 

[Shinigami]

I can't quite understand why some Indian observers point to the fact that India have granted Pakistan MFN -- was there some sort of hue and cry in Pakistan that India do this? So if India has done this, it is not in response to some Pakistani demand and now some Indian observers suggest that in not granting India MFN, Pakistan are somehow in some sort of breach - that's really a bit difficult for me to grasp -- what am I missing about this ?

when someone grants you a favour, you reciprocate. basic courtesy

 

[muse]

OH, so India have granted a favor? It's not business?? And Pakistanis were clamoring for this "favor"?

Hmmm, man who make love with woman on the slope, not on the level.

 

[Pfpilot]

There is a reason Pakistan hasnt given India MFN status. Indian companies, producing on far larger economies of scale and with lower costs in the form electricity and Im assuming gas have very little to fear from smaller Pakistani firms that struggle to even keep their plants running due to chronic energy shortages. If Pakistan allowed Indian products to enter the country without the tariffs and quotas currently in place, it would decimate the local economy.

Essentially you would have cheaper products and more variety, which is great for the consumer but would be painful in the short term, till Pakistan would find its own competitive advantage in certain industries. With politicians vying for short term legitimacy, its unlikely they would risk the loss of industries and jobs in the short term for the sake of long term economic vibrancy.

 

[JayAtl]

I can't quite understand why some Indian observers point to the fact that India have granted Pakistan MFN -- was there some sort of hue and cry in Pakistan that India do this? So if India has done this, it is not in response to some Pakistani demand and now some Indian observers suggest that in not granting India MFN, Pakistan are somehow in some sort of breach - that's really a bit difficult for me to grasp -- what am I missing about this ?

what you are missing is that one country is allowing another to export anything pretty much to its market and the other country is not doing so... I'd suggest reading up on what MFN entails. India should renege MFN status seeing that Pakistan could do without its market. forget the fact that even china seeks a FTA w/ India . The whole world seeks one because of india's vast market...and is willing to reciprocate

 

[JayAtl]

There is a reason Pakistan hasnt given India MFN status. Indian companies, producing on far larger economies of scale and with lower costs in the form electricity and Im assuming gas have very little to fear from smaller Pakistani firms that struggle to even keep their plants running due to chronic energy shortages. If Pakistan allowed Indian products to enter the country without the tariffs and quotas currently in place, it would decimate the local economy.

Essentially you would have cheaper products and more variety, which is great for the consumer but would be painful in the short term, till Pakistan would find its own competitive advantage in certain industries. With politicians vying for short term legitimacy, its unlikely they would risk the loss of industries and jobs in the short term for the sake of long term economic vibrancy.

first MFN does not mean no traffics imposed. second you have given it to other countries including china. third - it works both ways , there are Pak goods that cheaper from pak vs made in india. And we are talking about Indian goods / services that are complimentary to Pakistanis needs because of lack of infrastructure in those fields. i.e. it's not about cottage industries as an example or cheap goods , that china has decimated industries in Pakistan..

 

[Veeru]

There is a reason Pakistan hasnt given India MFN status. Indian companies, producing on far larger economies of scale and with lower costs in the form electricity and Im assuming gas have very little to fear from smaller Pakistani firms that struggle to even keep their plants running due to chronic energy shortages.

Bull crap.

Do u want to believe us that India manufactures products at a far larger scale and cheaper then china?????

You have FTA with china remember??

 

[Time Assassin]

Trades a Trade.

Money is Money.

Just appreinate the fact that something is happening between Pakistan and India other than a war. You don't need to be crictical on every little thing. Just sit back and relax.

Next time a power-cut happens at my Pakistan home and the electricity comes back on, i am going to say Thank You India. No joke

 

[Zeeshan360]

There is a reason Pakistan hasnt given India MFN status. Indian companies, producing on far larger economies of scale and with lower costs in the form electricity and Im assuming gas have very little to fear from smaller Pakistani firms that struggle to even keep their plants running due to chronic energy shortages. If Pakistan allowed Indian products to enter the country without the tariffs and quotas currently in place, it would decimate the local economy.

Essentially you would have cheaper products and more variety, which is great for the consumer but would be painful in the short term, till Pakistan would find its own competitive advantage in certain industries. With politicians vying for short term legitimacy, its unlikely they would risk the loss of industries and jobs in the short term for the sake of long term economic vibrancy.

U have FTA with China .
Chinese products are cheaper than that of India.
China has already destroyed u r market . Few days back there was a news that Sialkot sports products showed a sharp decline .

It's blessing in disguise that India shouldn't increase trade with Pakistan . Chinese are alrdy destroying their domestic market

 

[Zeeshan360]

Trades a Trade.

Money is Money.

Just appreinate the fact that something is happening between Pakistan and India other than a war. You don't need to be crictical on every little thing. Just sit back and relax.

Next time a power-cut happens at my Pakistan home and the electricity comes back on, i am going to say Thank You India. No joke

During 1996 or 98 Pakistan offered India 2000MW .
Now see where u are and where we are