NEW DELHI, Jan 22:
Asserting that India and Pakistan have “some way to go” before there can be normal trade ties, India today said enhancing trade and investments are “held hostage” to political issues between the two countries.
Addressing a economic think-tank -ICRIER- Foreign Secretary Sujatha Singh said a business environment free from terror and violence has to be created to enhance trade ties.
“Unfortunately, we seem to have some way to go before getting to the point of the one or of the other, or to the point where we can actually have a situation on the ground of normalised trade relations between Pakistan and India.”
“The exception, unfortunately, has been Pakistan, for a variety of reasons, much of it hostage to political issues between our two countries which are a legacy of our history and the tragic events surrounding partition,” Singh said.
She also said Pakistan’s argument that there are strong non-tariff barriers in India do not stand up to close scrutiny.
“… It can be no one’s serious argument that the lack of flight connections between Delhi and Lahore, the visa regime… Or India’s quality and safety certification procedures that are accepted around the world, are in some way aimed at creating a regime of non-tariff barriers against Pakistan-made-goods,” she said.
The secretary said that both the sides should have to create a business environment free from terror and violence.
“Trade and terrorism are incompatible. The challenge is to create an environment where we can focus on the trade and the economic agenda, and work towards growing connectivity and linkages between our two economies,” Singh added.
Further, she said that political will is important to implement the required measures to boost trade and investment ties.
“The desire is certainly there on both sides, especially at the business level…Pakistan is presently in the middle of its economic reforms and I am sure that economists in Pakistan fully understand the opportunities that are ready to be grasped and the additional policy space that will be created if Pakistan’s economy opens up for trade with the largest economy in the region,” Singh added.
On the agreed roadmap to normalise trade relations, she said that India did not insist on reciprocity on the road map but Pakistan have to take the first step towards that direction.
According to the Commerce Secretaries a fully normal trading regime between the two countries would look something as follows: There would be normal trade along all trading points including the Attari-Wagah land border post; Pakistan would confer ‘non-discriminatory market access’ status to Indian goods entering Pakistan, as India had done for Pakistan in 1996.
Both sides would undertake a significant reduction in their SAFTA ‘sensitive lists’ that governs bilateral trade, to only 100 items each. Finally, both sides would reduce tariff limits to 5 per cent, for all tradable goods.
To achieve these aims a sequential road map was also worked out, according to which Pakistan would announce the normalisation of trade on Attari-Wagah followed by India introducing a ‘first tranche’ of reductions in the present SAFTA sensitive list of 614 items by 30 per cent.
Pakistan would confer ‘non-discriminatory market access’ to Indian goods, accompanied by India introducing a second tranche of reductions of its SAFTA sensitive list to bring it down to 100 items.
She said it was now for Pakistan to take the first step as specified, in order to trigger the subsequent actions that have been agreed to by both sides.
Ms Singh India saw the election of Prime Minister Nawaz Sharif in May 2013, with a strong mandate to reform the Pakistani economy, as an opportunity to move ahead on this positive agenda.
The Foreign Secretary, however, said Pakistan had not been moving forward as desired.
“In August last year when we received a suggestion to move ahead with bilateral trade in gas and electricity, we responded rapidly by sending a technical team to Lahore, and readied ourselves for a return visit from Pakistan which did not take place. This month (January 2014) we responded positively when Pakistan expressed readiness to lift all restrictions on trade at the Attari-Wagah border. Meetings were thus scheduled for both the Commerce Secretaries and Commerce Ministers on the margins of the recent SAARC Business Leaders Conference to prepare for its modalities. Once again we were disappointed,” she said.
She pointed out that India also recently discussed the possibility of accelerating the pace of normalisation of bilateral trade- of compressing all the steps of the September 2012 Road Map into one grand announcement, and exploring the possibility of compressing the time taken to reduce tariffs on tradable goods faster than the 3 years allowed under SAFTA to a shorter period of 6 months or 1 year.
She said the recent announcements made by the two Commerce Ministers to accelerate trade normalisation and achieve implementation of the agreed measures before the end of February 2014 were welcome developments.
The Foreign Secretary did not agree with those in Pakistan who were arguing that India was creating some non-tariff barriers. “While it is true that India must take more steps to liberalise its external sector, it can be no one’s serious argument that the lack of flight connections between Delhi and Lahore, the visa regime operating between the two countries, or India’s quality and safety certification procedures that are accepted around the world, are in some way aimed at creating a regime of non-tariff barriers against Pakistan made goods,” he said. (Agencies)
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