MFN granted without due diligence: Sakib Sherani

In a special lecture on “The cost of economic non-cooperation in South Asia” organised by Sustainable Development Policy Institute (SDPI), the speakers present at the occasion said trade between India and Pakistan has high growth potential and peace prospects because when countries trade with each other, the conflicts are most likely to be resolved.
While highlighting the critical issues and comparative advantages, the speakers also said peace would prosper, if trade relations between India and Pakistan are strengthened. Trade will help to increase people to people contact and if there are any disputes, as is likely to happen, they will use dialogue to resolve them.
Dr Abid Suleri of SDPI said our traditional trade destinations such as euro zone and America are in crisis and there is a huge need to explore alternate trade avenues. “We believe first trade has to be initiated which will further lead to normalisation of overall relations and we need to turn challenges into opportunities,” he added.
Pradeep S Mehta, Secretary General, Consumer Unity and Trust Society (CUTS), International said the goods and equipments are informally traded through either a circuitous route or clandestine channels which increase the cost from 17 to 35 per cent respectively for the importer country.
Though official bilateral trade figures are pegged at slightly less than $400m, illegal trade is $1.5-2bn whereas, informal trade is another $1b, adding that some talk of a range of $2-8b. Official trade figures apart, informal and illegal trade are mere estimates, but indicate the huge potential for formal trade.
He said the plight of the consumer and the producer, be it in India or Pakistan is rather unpleasant. India should consider a preferential tariff and reduced non-tariff barriers formula for Pakistan.
“While a large share of gains to Indian consumers will be through Pakistani exports in plastic-based articles, minerals and mineral fuels, Indian exports in pharmaceutical ingredients and electrical equipment will significantly reduce the burden of Pakistani consumers,” he added. He said if strong economies always dominated bilateral trade, then China and the US would dominate all economies with which they have a trade surplus.
He said regional trading blocs may be an instrument for peace and prosperity as proved in other parts of the world. He added trade and commerce have been the most effective ways of establishing peace between rival nations. “It is expected that the resumption of the composite dialogue process between India and Pakistan will give a fillip to bilateral trade, besides facilitating early execution of various gas pipeline projects such as, Iran-Pakistan-India (IPI) and the Turkmenistan-Afghanistan-Pakistan-India (TAPI) projects,” he hoped.
Sakib Sherani, former economic advisor, government of Pakistan said the trade with India is a plus point, but Pakistan has given MFN status to India in a rush manner; without any sectoral study and consultations with stakeholders. He said there is huge potential, but opportunity cost for Pakistan is very much high despite sitting in the middle of two fast growing economies of the world such as, India and China.
According to him, MFN status is no longer a big issue concerning trust-deficit, but the deepening water issues including, Kashmir dispute that India and Pakistan will have to act to genuinely address the trust-deficit and peace prospects.