Elite in the govt oppose border trade with India

December 03, 2012 - 7:10:39 am

ISLAMABAD: Pakistan has missed a self-imposed deadline for allowing all tradable items through land routes from India because of stiff resistance from land-owning elite in the federal cabinet.

The two countries had agreed in September to open the Wagah border and other land routes for trade in all commodities, including agricultural produce, by the end of October. It was learnt that the cabinet is reluctant to take up the summary on the issue owing to resistance from its members and parliamentarians.

 An official said it appeared to be a very difficult decision for the government at a time when it was going to complete its tenure in the next few months.

The general election will most probably be held in May.

“No one can afford to take a decision that could send a negative message to voters,” he said. The People’s Party’s constituency consists mostly of landowners and farmers in southern Punjab, Sindh and Khyber Pakhtunkhwa.

“The election will cause a delay in the liberalisation process launched in April,” the official said. 

The commerce ministry had submitted a summary seeking approval of the decision allowing India to export more than 5,600 items by land, especially through the Wagah border, as against the current list of a mere 100 items allowed to enter Pakistan.

India also missed the deadline set for it to reduce the sensitive list by 30 per cent under the South Asia Free Trade Agreement (Safta) last month. The products placed in the sensitive list are allowed for trade, but the flows are restricted through tariff.

Contrary to this, Pakistan has 1,209 items on the negative list, disallowing their trade through any route from India. Pakistan also set a deadline to phase out the negative list by December 31 as part of the trade liberalisation programme. India had agreed to phase out the negative list by April next year and confine the sensitive list to 100 items. 

“I don’t see these commitments being honoured in the present circumstances,” the official said. In reply to a question, he said the government was not backtracking from its decision, putting down the delay to “procedural hiccups”.

A commerce ministry official said the agricultural lobby was trying to sabotage the liberalisation process. 

Recently, India’s Minister for Commerce and Industry Anand Sharma had called for both nations to continue moving forward towards a non-discriminatory trade regime and said that any perceptions that come in the way of this process should be addressed by better understanding of the benefits of normalisation of relations.

At a meeting with members of the Pakistan Business Council in New Delhi Sharma expressed satisfaction over the trade normalisation between the two countries.

“Pakistan government has taken some steps to move towards full normalisation of trade relations with India by making the transition from a ‘Positive list’ to a ‘Negative list’ for imports from India. This process must be taken to its logical end by phasing out the negative list and eventually according most favoured nation (MFN) status to India,” he said.