Sources in the WTO have revealed that India is using delaying tactics for the time-bound European Union unilateral trade concession to Pakistan. While the government has been beating the drum over its landmark ‘composite dialogue’ in India, sources in the WTO have revealed to Profit that ‘things remain dicey at this stage’ with India now raising concerns over some items included in the trade package. What is most important to realise is that the EU drafted the package very carefully and tried to adopt a win-win approach, which is to say that they tried to ensure that there were little if any consequent commercial disadvantages for EU member states or other trading partners like India. More significantly, if these delaying tactics by India continue, there might be a chance that Pakistan will not be able to secure the EU unilateral trade concessions.
Indian surprise
This would imply that both the countries will be back to square one, after what were touted to be ‘historic meetings’ between the commerce ministers of both the countries. Such Indian intransigence for the Pak-EU trade deal will surely retard progress made in trade diplomacy, sources explained. What is most surprising is that while Pakistan has been taking active steps to cut down the negative list of products, in its attempt for trade liberalisation, and is also making sincere efforts for giving access to Indian investors to exploit business opportunities in Pakistan, India has proven yet again that it is not willing to budge on its stance despite repeated assurances. Intriguingly, the joint statement issued after the ministerial level talks between the commerce minister of Pakistan Makhdoom Amin Fahim, and his Indian counterpart Anand Sharma, made no mention of India removing its objections to the Pak-EU trade deal. Moreover, sources in Geneva have also confirmed that they have not received any formal intimation in this regard. Pakistan’s foreign minister Hina Rabbani Khar speaking to the Pakistan National Assembly had said, “The Indians are also talking in terms of partnership of a strategic nature with Pakistan over a long time, which is indicative of growing confidence between the two countries. Both Pakistan and India have indicated their desire for peace and forward movement on all issues.” It is ironic that this statement is being made in the backdrop of India once again raising item-specific issues over the Pak-EU preferential trade agreement.
European concessions
EU leadership decided to give Pakistan specific tariff concessions in the form of autonomous trade preferences under which 75 Pakistani products would benefit from duty free access to European markets. This decision was taken by the European leadership taking into account the sacrifices Pakistan has made in the war on terror and the devastating floods last year, which had a combined total impact of $43 billion on Pakistan’s economy. “Pakistan should not be afraid to grant MFN status to New Delhi as it would not hurt Pakistan’s trade interests,” prime minister Manmohan Singh said recently in his meeting with Pakistan’s commerce minister Makhdoom Amin Fahim. Interestingly, however, while the government had decided to take steps to granting MFN status to India, the matter was not debated in parliament. Granting MFN status to India has met stiff resistance in Pakistan with Jamat e Islami and PML-N, the second largest political party opposing it on the grounds that it was not discussed with members of the parliament.
Pulling at the strings
In another development, it has been learnt that the Afghan-Pakistan trade agreement was undertaken after immense pressure from Washington. This trade agreement will have severe repercussions for the indigenous industry, which exports goods worth approximately $2 billion to Afghanistan. Sources in the commerce ministry have pointed out that Pakistan does not stand to benefit from this arrangement. It is even more intriguing that Pakistan’s chief negotiator privately agreed to give India and Afghanistan trade access through the Wagah border. According to a wikileaks cable, “Under a multi-year plan to open the Wahgah border, in return for Afghanistan’s full compliance with the re-export study’s recommendations, Pakistan would allow Afghan trucks unimpeded access to the Pakistan side of the Wahga border in the first year. In year two, permit Afghan trucks unimpeded access to the Indian side of the Wahga border. In year three, permit Afghan trucks to return from India with certain Indian goods. In year four, permit Afghan trucks to return from India with an expanded number of Indian goods and in year five, grant Afghanistan full access to India in terms of transport and Indian imports.” This decision has been taken without taking concerned stakeholders on board, and this step would prove disastrous for the indigenous industry in Pakistan. Not only will the country be exposed to the risk of Indian goods being smuggled to Pakistan, but will also be exposed to re-export of Indian goods from Afghanistan to Pakistan.
On whose orders?
The question arises that who gave the respective ministry the right to take these decisions without involving the respective stakeholders and chambers of commerce on board, and why has the decision been made in secrecy? Commerce ministry sources have also confirmed that these decisions were in fact taken under the wraps, and were made without the input of the concerned authorities. The source further said government officials were under immense pressure from Washington to go ahead with the transit trade agreement, which will have disastrous consequences for the economy, and subsequently the country.