Superstitious neighbours

What logic implies, and how the narrative misrepresents priorities

The Pakistan-India bilateral relationship is quite the ‘riddle wrapped in a mystery inside an enigma’. It is a relationship which breeds on cynicism instead of trust and narrative instead of logic or rationale. There are more dark clouds than silver linings in this relationship whether digging out the history or foretelling the future.

Logic says, being next door neighbours and having a varying degree of economic development, the two countries must enjoy an endless and profitable economic and trade relationship. But the narrative says that the two countries have been at loggerheads since the very start, so they can’t be trading partners, because it can be risky for national security. Logic again implies bilateral economic relationship can still prosper a great deal without compromising national security interests, and we have examples around the world like China-Taiwan profitable trading relationship despite being foes politically and militarily, but the narrative still seems to have an overriding effect in the Indo-Pak relationship.

In such a superstitious relationship, where perceptions take precedence over reality and apprehensions over certainty, the stakeholders from both sides of the border need to tread a very careful path, especially when it comes to bilateral negotiations. Each and every term used in the negotiations must be carefully glossed over and both sides must make sure that everything must have a practical meaning and scope.

Logic says, being next door neighbours and having a varying degree of economic development, the two countries must enjoy an endless and profitable economic and trade relationship. But the narrative says that the two countries have been at loggerheads since the very start, so they can’t be trading partners

Non-Tariff Barriers (NTBs) are the costs, other than tariffs, which have a bearing on the trader. Another altogether different thing is a Non-Tariff Measure (NTM). Public and private stakeholders from Pakistan often mistake one for the other. The latter are permissible under WTO rules provided they are non-discriminatory as between domestic and third country suppliers and also implemented in a transparent manner. But the perceptions of Pakistanis are not always wrong. The thing is that NTBs generally tend to go beyond the measures taken at the border and often reach out to the trade facilitation measures covering customs clearance procedures, transport and transit infrastructure logistics, etc.

So, when a cheaper available alternative is not provided, even though it is available, in the trader’s perception, this can constitute an NTB. It can be safely assumed that there always remains a possibility that when the NTMs are not implemented in a transparent manner or within a reasonably accepted period of time, they can easily be translated into NTBs. But, when India is applying Sanitary and Phyto-Sanitary (SPS) measures purely for the purpose of securing the health of its masses in a transparent manner, it is not an NTB, but an NTM.

On the other hand, India says that there are two major NTBs imposed on its products by Pakistan. One is the continuing imposition of a negative list of 1209 items on India’s exports to Pakistan and the second one is the restriction on imports of tradable products through Wagah-Attari border with an exception of 137 agricultural items.

Now it is to be seen in the best interest of the two countries that whether the above-mentioned NTBs are constructive or destructive in nature and whether they are NTMs or NTBs in the first place.

India says that there are two major NTBs imposed on its products by Pakistan. One is the continuing imposition of a negative list of 1209 items on India’s exports to Pakistan and the second one is the restriction on imports of tradable products through Wagah-Attari

Speaking at a conference on India-Pakistan Trade in Lahore University of Management Sciences (LUMS) Consultant UN ESCAP, Indira Nath Mukherjee was of the view that after initial opposition to opening up trade with India, not only has the harsh opposition from Pakistan Auto Industry (a highly protected sector in Pakistan) is diminished; on the contrary, business opportunities for trade in auto parts with India are becoming visible. He said that car assemblers of Pakistan were willing to import completely knocked down (CKDs) parts but remain opposed to the import of completely built-up units (CBUs). He further said that Suzuki and Toyota have affiliates in both the countries and with trade in auto parts being permitted; these companies can import car components from whichever of their affiliates or their vendors produce them more cheaply.

Mukherjee further asserted that Pakistan’s apprehensions of being swamped by Indian manufactured goods (currently in Pakistan’s negative list for India) are exaggerated. He made a point how these very products are being imported preferentially or duty-free from China. He said benefitting from a free trade agreement (FTA) with Pakistan, China is making deep inroads into the Pakistani market, while the share of India in Pakistan’s imports remained miniscule.

About trade through Wagah-Attari , it may be hoped that through logical and fair negotiations, this impasse can also completely be done away with, as the import of 137 agricultural items is already underway and it is a watershed moment in itself, as it never happened throughout the tumultuous history of bilateral relationship between the two countries.

Pakistan and India share a lot in terms of language, history, cultural norms and values, so without compromising their national security interests, both of these countries should do their best to enjoy a symbiotic relationship, the fruits of which must be reaped by the masses of these two countries.