Though Indian Commerce Minister Anand Sharma did not immediately get the Most Favoured Nation (MFN) status that his country wants from Pakistan. But during his negotiations in his current visit, he got the assurance of MFN status by the end of the year, when Pakistan will have finished phasing out its negative list for imports, Indian products are supposed to be imported at a maximum tariff of five percent, except for items on the SAFTA Sensitive List. Pakistan is presently on a positive list, whereby items which are on the list can be imported from India, and will move to a negative list (consisting of items whose import from India is forbidden) as a transitional phase. According to the joint press conference by Mr Sharma and his Pakistani counterpart, Senior Minister Makhdoom Amin Fahim, the two sides are sticking to the timeframe agreed by the commerce secretaries. The joint press conference came after the signing of three agreements, on customs cooperation, mutual recognition between the two countries’ standards authorities and removal of trade grievances. The agreements were described as a move towards dismantling non-tariff barriers and as confidence building measures for businessmen.
Amid all this activity, there was no mention of the core issue dividing the two countries, that of the Indian denial of the right of self-determination to the Kashmiri people. While the two sides are willing to discuss electricity, which both suffer shortages of, and petroleum, which both import, they have not discussed water, which India is damming in Kashmir even though it belongs to Pakistan under the Indus Waters Treaty. The latter, in particular, because it involves Pakistani agricultural products which India has its eyes on, is very relevant to the talks. The two sides are talking only because they are pushed into doing so by the USA, which has adopted mutual trade as its latest mantra. It should be recognized that trade has not stopped the two countries from going to war, because they did so in 1965 in the presence of trade relations. As a result of trade, peace will not result, nor even the prosperity promised by both India and the USA, but the destruction of what remains of Pakistani trade and industry.
Mr Sharma told the Pakistani side that the trade talks should not include the Kashmir issue or other problems. This reflects the Indian mindset, particularly since Mr Sharma belongs to a Congress-led government. India wants to drop the Kashmir issue, even though it is basic to the relationship. It also wants to practice an outmoded mercantilism, and wishes to increase its surplus with Pakistan. The present government should take a firmer line, and make India first end the existential threat it poses Pakistan, such as by its interference in Balochistan, before ending other problems. Only then can trade come on the agenda.