Pakistan likely to grant MFN status to India by June 2013

Pakistan industry council today said Pakistan is expected to grant the much-awaited Most Favoured Nation (MFN) status to India by June, a move which would further normalise trade ties between the two countries.

"Now general elections (in Pakistan) will take place... then within a month, by June it (MFN) should be granted," Bashir Ali Mohommad, a member of the Pakistan-India Joint Business Council said here.

He was speaking at a function jointly organised by the Research and Information System for Developing Countries and Commonwealth Secretariat.

The council was formed following a decision by the two countries to create the body to boost commerce and economic ties.

Pakistan has already missed a December 31, 2012 deadline to end a negative list regime for trade and give MFN-status to India.

Further, Mohommad asked the Indian government to share the list of items which have been removed from the sensitive list, under the South Asia Free Trade Agreement (SAFTA).

India has agreed to reduce its sensitive list, maintained under the SAFTA, to only 100 items from present list of 614 items by April 2013.

 However, Least Developed Countries under SAFTA already enjoy the privilege of a drastic reduction in sensitive list.

"...Those items have not been notified (yet). This is where Pakistan side is really requesting India to make this list public before we grant the MFN status," Mohommad said.

However, Director in the Commerce Ministry, Indira Murthy, said Indian government will not notify the list till the neighbouring country granted the MFN status to India.

"It is specially specified in the 7th Round of talks held between secretaries of India and Pakistan in September 2012 that India will cut down its list of 100 items and notify it only when Pakistan gives MFN status and removes the land restrictions on Attari-Wagah border," she said.

India granted MFN-status to Pakistan in 1996. However, Pakistan has been postponing implementation of its decision to grant MFN treatment to India with several deadlines missed believed to be due to its domestic political compulsions.

Since then, several Pakistani federal ministers have said that the move to grant MFN status had been delayed so that the government could hold consultations with its domestic industries that have expressed reservations about the move.

Mohommad said India should act as an elder brother and should remove hurdles to trade.

Elections in Pakistan are scheduled to be held on May 11.

India and Pakistani sides had agreed to increase bilateral trade from the current level of over two billion dollars to six billion dollars by 2014.

Mohommad said, "...The two countries have been trying to normalise the relations. By-and-large, there have been some successes, but the story is of missed opportunities due to lack of decisive political actions at critical moments which have affected the trade."

He said both the countries have made some important agreements which are being implemented or are under implementation. This includes Visa Facilitation Agreement, Agreement on Customs Facilitation and Dispute Resolution Agreement.

India and Pakistan have taken several steps to normalise trade relations since the two countries resumed their peace process in 2011 after a gap of over two years following the Mumbai terror attacks.

In March last year, Pakistan had moved to a negative list regime for trade with India from the positive list regime. This had opened the Pakistani market for about 7,000 Indian goods against about 2,000 earlier.