Pak defers decision to switch to negative list trade regime

Pakistan today deferred a key decision on switching to a negative list regime for trade with India after several stakeholders expressed reservations over the move, Information Minister Firdous Ashiq Awan said.

The Cabinet put off the decision on the Commerce Ministry's proposal to finalise a negative list as part of measures to normalise trade relations with India because "all stakeholders were not on board", Awan told a news conference.

The interior and textiles ministries were among the stakeholders who had expressed reservations over the proposal.

Since enough homework had not been done on the proposal, Prime Minister Yousuf Raza Gilani had decided to defer the matter, she said.

An official statement said the Cabinet meeting chaired by Gilani had "directed the Ministry of Commerce to consult all stakeholders before the preparation and finalisation" of the  negative list.

The Cabinet gave its approval for the signing of three agreements aimed at boosting trade with India, the statement said.

These are agreements on cooperation and mutual assistance in customs matters, a bilateral cooperation agreement for mutual recognition between the Bureau of Indian  Standards and the Pakistan Standard and Quality Control Authority, and an agreement on redressing trade grievances between the two sides.

The agreements are scheduled to be signed following talks in Islamabad tomorrow between visiting Indian Commerce Minister Anand Sharma and his Pakistani counterpart Makhdoom Amin Fahim.

Sharma arrived in Pakistan on Monday with a 120-member business delegation. Sources said that the proposal for switching over to a negative list regime is expected to be taken up at the next cabinet meeting to be held in about a fortnight.

Pakistani leaders had earlier said that the government intended to put in place the negative list by March and then move towards giving India Most Favoured Nation (MFN) status by the end of the year.

There has been stiff opposition to the Pakistan government's trade liberalisation measures from some sectors like textiles, pharmaceuticals and auto manufacturers, which have traditionally enjoyed a monopoly.

The Pakistan Pharmaceutical Manufacturers Association has argued the sector should not be opened to India once it is given MFN status.

Under the existing positive list regime, the two sides can trade less than 2,000 items. The negative list will include only the items that cannot be traded, significantly expanding the scope for bilateral commerce.