Pakistan must remain cautious over MFN issue

Although Pakistan has declared India to be its ‘Most Favoured Nation’ or MFN, the cross-border rivals are still seeking an explanation as to what this status actually means. The premiers of both nations are scheduled to meet at the Saarc Summit on Thursday,
November 10 and Manmohan Singh is likely to seek details of this title from Yousuf Raza Gillani.

The Pakistani Cabinet cleared grant of MFN status for establishing a non-discriminatory trade regime with India last Wednesday but the foreign office clarified the next day that clearance was for normalisation of bilateral trade relations that will "culminate”
with MFN.

Currently, Pakistan allows import of just 1933 items from India and once the MFN status is effective, India will be able to export a lot of items across the border, including petroleum products, farm products, pharmaceuticals and textile machinery apart
from a host of consumer goods.

Pakistan imports around 6800 items from other countries and India will enjoy the same luxury and treatment as other countries. However, Indian analysts believe that businessmen will not shift their entire output to Pakistan and that it will take a substantial
amount of time to reduce the trust deficit between both countries.

A major concern for India is the 26/11 incident and the Indian media asserts that people, in general, will not be comfortable on the thought of promoting business with a country which cannot control terrorism and other such activities.

Pakistan, on the other hand, could use MFN as a bargaining chip for pushing India to move fast in the area of liberalising the business visa regime, removing hurdles in the cross-border movement of goods and gaining more access for items such as textiles
and cement.

While business is a priority for every country, integrity should not be compromised in the process. Pakistan should not go overboard and negotiations with India should be done on the basis of equality. India cannot ignore the fact that Pakistan is strategically
strong and has its borders covered as efficiently as India. Threatening will do no wonders to Pakistan, which has strong support from other neighbouring countries.

However, if things do go well, regional prosperity will flourish and the benefit will be shared on either side, more towards India maybe.

Posted by Hammad Malik on Dec 19 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