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India not granted MFN status, says Gilani

One thing you guys need to understand that there is not only the influence of foreign policies or for that matter govt individuals on granting MFN status to india but there are many other factors involved as well. Like the presence of foreign companies in Pakistan may it be through FDI, Non-equity arrangement or exports they know that trade with india means lost of market share for them , and for monopolies it will be a nightmare ..to avoid that they will be lobbying the govt and in some cases the govts of their countries directly do that......

Even because of such lobbying Pakistan has lost many of its local companies.... Like you can take the example of Adam cars which was a local company producing cars, trucks and SUVs but in its initial phase the huge lobbying from Japan to govt resulted into no support by govt for the local company resulting into the closure of that company ...because if it would have grown it would have been a direct competitor to Japanese companies and may have taken a chunk of market share from them due to the cost leadership factor ......

Similarly there are other examples too.... so rather then yelling here or blaming to a specific person or entity will not do a good to anyone ....try to look out for different prospects that are affecting the proposition

When in 1991 India opened up its market to foreign countries, we had few local manufacturers TVS, TATA and Mahindra and other joint manufacturers like Suzuki with Maruti India, Honda group with Hero group, Bajaj and others.

Today we have VW, Nissan, BMW, Honda, Renault, Mercedes, Hyundai and you name it. TVS, TATA and Mahindra have still survived and are competing very well with the new players. It is time protectionist mindset is replaced by a quest to search for better products to the end customer. A value proposition is all that each company should focus on. Just saying local industries can't compete indicates a sense of underestimating once own industries.

---------- Post added at 01:28 PM ---------- Previous post was at 01:26 PM ----------

Give India MFN status already. Stupid politicians. It's a win-win situation for both countries.

Thanks for your comments. Such comments are rare on PDF.

It is not a win for some Pakistanis if India's win is involved. It is only a win if Pakistan wins and India is not involved or when Pakistan wins and India loses.

:cheers:
 
When in 1991 India opened up its market to foreign countries, we had few local manufacturers TVS, TATA and Mahindra and other joint manufacturers like Suzuki with Maruti India, Honda group with Hero group, Bajaj and others.

Today we have VW, Nissan, BMW, Honda, Renault, Mercedes, Hyundai and you name it. TVS, TATA and Mahindra have still survived and are competing very well with the new players. It is time protectionist mindset is replaced by a quest to search for better products to the end customer. A value proposition is all that each company should focus on. Just saying local industries can't compete indicates a sense of underestimating once own industries.

---------- Post added at 01:28 PM ---------- Previous post was at 01:26 PM ----------



Thanks for your comments. Such comments are rare on PDF.

It is not a win for some Pakistanis if India's win is involved. It is only a win if Pakistan wins and India is not involved or when Pakistan wins and India loses.

:cheers:


Very relevant point. All nations are now integrated into the global economy of the world, a far cry from the protectionism that destroyed the world 70 years ago. Pakistanis industries will obviously suffer with the entry of superior Indian companies, but it will allow our companies to raise their bar as far as efficiency is concerned. In the end, consumer wins by procuring not only superior products, but at lower prices.
Many industries will be wiped out by foreign investment, but that is the modern economic world. Pakistan will be forced into focusing on producing the goods and services that it has a competitive advantage in. We have to stop thinking from the point of view of local industries and more so from the point of view of a global village. Pakistan will, in the long term benefit greatly from global competition. We will have certain industries that will compete against the best in the world and expand internationally, while others, that are far from efficient, will fall by the way side. Consumers will gain better products and will help propel the economy forward.
If we prevent Indian companies from competing against the domestic ones, we are limiting diversity in the market place and if Pakistani products truly are superior, then Indian counterparts will have no chance anyways. If not, then Pakistanis can learn from them and produce better goods and services.
Its better to have a big pie and share it with others, than to have a tiny one all to one's self.
 
Actually our Kahmiri brothers were not happy with this: :angel:

MUZAFFARABAD - Pakistanis should rise and compel their government to withdraw a decision to grant Most Favoured Nation (MFN) status to India, a Kashmiri separatist leader said on Sunday. Kashmiri separatists have rejected the Pakistan-India trade pact, saying it was being done under pressure from the United States. “Pakistani government is taking dictation from America and this deal is also result of that dictation,” Syed Ali Geelani said in a telephonic address to the Muzaffarabad Press Club, from Srinagar, the capital of Indian-held Kashmir. “It is a great source of pain for us to see Pakistan granting MFN status to India when Indian security forces are raping our women and destroying Islamic culture,” said Geelani. “I appeal to the Pakistani nation to protest on this development so that the government is compelled to take back its decision,” he said. Pakistan Muslim League – Nawaz (PML-N) President Nawaz Sharif, PML-N Convener Raja Farooq Haider and Jamaat-ud-Dawa (JuD) chief Maulana Abdul Aziz Alvi have assured support to Geelani. “The entire nation is ready. We will not step back an inch from our stance because freedom is our destination,” Alvi said.

Or it may be that opposition was successful in convincing the GOP for this...
 
Give India MFN status already. Stupid politicians. It's a win-win situation for both countries.

It's not a win-win! It's a win-lose! We already suffer from Chinese imports! Why make it worse for ourselves! Our economy is in the slumps and security situation is a cause for worry! This is exactly the WRONG time to be doing this! Not to mention the betrayal towards our dear Kashmiri brothers!

Only when our internal strength (economic + security) starts growing again, and has grown back up to a certain level, should we even consider taking a look at this down the line in the future!

I dont know how it will be a win situation for us, already our markets are flooded with chinese products , from pencil to electronics Chinese products are everywhere at a much cheaper price as a result local companies have suffered alot , Due to the inflation and poverty rate people focus more on buying cheap products rather than analysing the cost vs benefit ratio. If india will be allowed MFN status it means our markets will be flooded with indian products as well due to the size of their country and the number of companies and amount of production ...as a result the remaining companies will also cripple ...until and unless there is calculated amount of tariff charged which can make indian products at power with the local products in terms of price or may government should provide subsidies to local companies but seems highly unlikely due to the corrupt nature of government...For me there should surely be trade with india but in limited manner , there should be a quota system or an arrangement through which both countries can export goods to each other of same total worth

Agree with this!

Also, the segment of the population that benefits from trade with India will sort of become like an "India Lobby" inside Pakistan! Now tell me if that is the sort of thing we need! Especially at a time when our economy is in the slumps and internal security situation being not-so-great! Who knows what kind of things this "India Lobby" might start pushing for inside Pakistan, due to the 'benefits' they get from the other side of the border! Not trying to be mean to anyone -- just putting forth some concerns I consider to be significant!
 
When in 1991 India opened up its market to foreign countries, we had few local manufacturers TVS, TATA and Mahindra and other joint manufacturers like Suzuki with Maruti India, Honda group with Hero group, Bajaj and others.

Today we have VW, Nissan, BMW, Honda, Renault, Mercedes, Hyundai and you name it. TVS, TATA and Mahindra have still survived and are competing very well with the new players. It is time protectionist mindset is replaced by a quest to search for better products to the end customer. A value proposition is all that each company should focus on. Just saying local industries can't compete indicates a sense of underestimating once own industries.

You are tilting towards the concept of closed economy vs open economy...the things you have quoted happen when india became an open economy previously it was a closed one...after that foreign companies started to come in india ....but here the situation is different...we are already an open economy...and we have got what we can.... the issue with india is of trade and not anything else its not like that Pakistan is a closed economy so we should make a transition ....rather we already have multinational companies working here....the question is not about whether we should allow foreign companies or not rather its about we should allow india to directly export to Pakistan or not
 
You are tilting towards the concept of closed economy vs open economy...the things you have quoted happen when india became an open economy previously it was a closed one...after that foreign companies started to come in india ....but here the situation is different...we are already an open economy...and we have got what we can.... the issue with india is of trade and not anything else its not like that Pakistan is a closed economy so we should make a transition ....rather we already have multinational companies working here....the question is not about whether we should allow foreign companies or not rather its about we should allow india to directly export to Pakistan or not

If you really think Pakistan is an open economy then well think again.

Why do I not see Indian banks opening in Pakistan? Why is ICICI or Yes bank stopped from setting up lending outlets in Pakistan. They would love to lend money to Pakistan given the high interest rates prevailing in Pakistan.

Why are the Indian bikes that many Pakistani youth wish to ride not available?

Why are cosmetic brands that sell in dozens in every street corner routed through Dubai instead of letting demand and supply decide the inflow?

Food for thought !


The love/hate relationship

India and Pakistan are in many ways very similar and yet in other ways very dissimilar. The socio cultural over lap is visible. Sharing a history of many traditions and values emphasising the role of families and women and sharing the hierarchical legacy of the British raj, both countries after converging for many years, have started diverging distinctly. While India has traditionally been a more closed to the world political system where the communistic thinking dominated for quite some decades. Pakistan, with its open market philosophy, has always been trade and foreign investment friendly. However, of late India has changed its stance and has really opened up its huge economy to foreigners who have queued up to enjoy the product hungry sizable Indian middle class. Pakistan meanwhile has found it difficult to invite investors or to find a ready market for it products overseas due to its huge security and stability problems.

With this situation, the decision to grant the MFN status to India has received a mixed reaction. For economists MFN should be a logical reciprocation by Pakistan. If a country has given one to us we must equate the balance by doing the same. For the politicians MFN is not that simple and since the political relationship has been fractured for quite sometime granting a concession like this will make them unpopular with the public. For the public the literal meaning of this status is not acceptable. In their minds how can we declare India as our favorite nation since India has been so allegatory and condescending about Pakistan. In truth MFN is just a reciprocal arrangement where by member countries prefer to trade with each other on concessionary basis to boost up trade with all around.
The issue of Indo-Pak trade has been debated and discussed too many times. Every time the conclusion is the same. They should. They can raise the trade from a paltry billion to six billion and more. Yet there are always the skeptics. Some feel that the Indian goods will flood the markets and result in a loss of business and a loss of jobs. The recent protest by the Pakistani cinema industry on the free import of Bollywood cinema is based on the premise that the presence of Indian movies has seriously dented the development of Pakistani movie industry. This argument though true is really a fear-based protest that just contradicts the stance of the free trade proponents. Any industry protected from competition becomes retarded. In the case of Pakistani movies it is not the Indian movies but their own inefficiency that has destroyed the industry. The standard of movies had become so low and crude that the masses preferred to stay away from them. Whenever a good movie has been made it has brought accolade and revenues. The latest movie by ShoaibMansoori.e BOL has beaten all records in the country and has actually been hailed as an Oscar qualifier not only at home but in India as well. Thus the lesson is that quality will always win over any competition and market forces are the true test of any trading activity.
However, the issue of trade in today’s era is not just of tarrifs being high or low but of trade being free and fair. Though India has been propagating that they have granted Pakistan MFN status Pakistan’s entry into Indian markets is still not fair and free. The reason being that India has cleverly used non tariff barriers to make the trade difficult and hindered. Non tariff barriers are not an imposition of duties and taxes but of standards and documentation that make it difficult for the foreigners to enter and compete with Indian competitors. Pakistani cement exports have been lying on Indian ports for months due to product standards and testing being imposed on them which not only cost time but money as well deterring further imports in the country. Most clever countries like Japan have used non-tariffs to ward off rice and many other imports in the country
The see saw relationship of Indo Pakistan has done a lot of damage to the trade potential of this region. The solution to this problem is not to abstain from granting MFN status to India but to grant it and then prepare a strategy of negotiating on removing non-tariffs on Pakistani exports. In case the Indians are not receptive to this idea, the solution is not to condemn MFN but to also reciprocate with imposing non-tariffs on selective Indian imports. After all when you cannot join them beat them.

The writer is ananalyst, consultant and CEO of FranklinCovey Pakistan and can be reached at andleeb.abbas1@gmail.com

The love/hate relationship | Pakistan Today | Latest news, Breaking news, Pakistan News, World news, business, sport and multimedia
 
If you really think Pakistan is an open economy then well think again.

Why do I not see Indian banks opening in Pakistan? Why is ICICI or Yes bank stopped from setting up lending outlets in Pakistan. They would love to lend money to Pakistan given the high interest rates prevailing in Pakistan.

Why are the Indian bikes that many Pakistani youth wish to ride not available?

Why are cosmetic brands that sell in dozens in every street corner routed through Dubai instead of letting demand and supply decide the inflow?

Food for thought !

Thats just for india and not for the rest of the world ...its similar like saying why not a MCB bank in india .... there have been cold and hot relations b/w these countries therefore never allowed such facilities to each other but to the rest of the world....We already have many foreign banks operating in Pakistan like HSBC,RBS etc If we haven't allowed only india to operate in Pakistan doesn't mean we are a closed economy....
 

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