India hails Most Favoured Nation (MFN) status by Pakistan

India hails Most Favoured Nation (MFN) status by Pakistan

On Thursday, November 03, 2011 India’s Deputy Chief of Planning Commission, Montek Singh Ahluwalia hailed the Most Favoured Nation (MFN) trade status granted by Pakistan.

“Well, I think it is a very good development, I think it’s a good move,” said Ahluwalia.

Pakistan’s Interior Minister Rehman Malik said the move would open up new arenas for the two countries to explore.

“We have declared India as a favoured country; I think it’s fantastic,” said Malik.

Federal cabinet on Wednesday, unanimously decided to grant India MFN status hoping that progress in trade ties will help bolster a fragile peace process. The status is yet to receive final clearance from the parliament before it can be made official.

The current development is a major breakthrough that can bolster efforts to improve relations between the nuclear-armed neighbours.

Pakistan also expects New Delhi to remove non-trade barriers against Pakistani goods.

Trade has long been tied to political issues between Pakistan and India. India granted Pakistan MFN status in 1996.

India broke off talks after the November 2008 attack on Mumbai that killed 166 people. Talks with India resumed in February 2011, with political implications likely to outweigh any practical benefits.

The United States (US) hailed a move by Pakistan towards normalizing trade relations with India, saying it is a “very, very big deal” that could open up great economic opportunities.

Pakistani Information Minister Firdous Ashiq Awan had said in Islamabad on Wednesday that the federal cabinet had unanimously approved India as a most-favored nation (MFN).

However, US officials said they understood that the Pakistani cabinet had approved a negotiated path to reach MFN — a move they still described as a major development.

“We don’t yet have most-favored nation status,” State Department spokeswoman Victoria Nuland told reporters.

“We have a decision unanimously approved by the Pakistani cabinet to open a path for full normalization of trade relations with India” as the commerce ministers of both countries agreed in Delhi in September, Nuland said.

“This is a very, very big deal, very important, could lead to really great economic opportunities for both India and Pakistan,” Nuland said.

It “sets the kind of example” that other countries in South and Central Asia should follow toward building an integrated regional economy that Washington has pushed under its “New Silk Road” project, she said.

Washington has sought to put Afghanistan at the center of such a project in a bid to ensure the war-torn nation becomes peaceful and prosperous in the long term.

“We would like to see the opening of trade relations because this will bring prosperity to everybody, break down old barriers,” Nuland said.

“We really applaud Pakistan and India for taking this concrete step to improve their relations. It’s the most tangible thing that they’ve done yet,” she said.

“And our hope is that the process of normalization in both directions, including getting eventually to full MFN, continues and that there is a reduction in non-tariff barriers by India,” she added.

The US has long sought to defuse tensions between India and Pakistan, both nuclear armed nations that have fought three wars since independence from Britain in 1947.

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Posted by Ammar Ahmad on Nov 3 2011. Filed under Pakistan. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry