Economic interests to be damaged

KARACHI - The foreign trade experts appreciate the resumption of trade talks between the two countries, but fear that the business communitys demands to give a Most Favoured Nation to India could have negative implications for the various sectors of the local industry. The influx of Indian products may grab the most of the part of the local market more than China. The local importers would prefer to import Indian goods into the country on the back of low transportation cost. The importers pay heavy freight charges for the goods being imported from China through sea routes. However, the business leaders have hailed the announcement of opening up border trade particularly from Khokrapar and Monabao as well as at the Wagha Border. The business leaders said that government should consider the import of cheap electricity in order to overcome power crisis and minimise the loadshedding in the country. They welcomed the import of POL products from India. According to Pakistan Economy Watch, demands to accord Most Favoured Nation (MFN) status to India are against the economic and national interests. The local business circles demanding MFN status to India are not fully aware of the repercussions of such a move, it said. Pakistani importers may save a billion dollars per year if India is declared MFN but it can damage local industry, increase infiltration, and trigger terrorism, said Dr Murtaza Mughal, President PEW. He said that India granted MNF status to Pakistan in 1995 but it proved to be a trick as local exports could not pick up due to the non-tariff barriers that include different clearances, inspections, certifications, specifications, labelling, marking and packaging rules etc. In addition, India has also imposed a number of de facto trade barriers to stop Pakistani exporter from making inroads in its market, said Dr Murtaza Mughal. That is why India has kept a soft tone in its demand for MFN status by Islamabad as Indian know that they have never granted real MFN status to Pakistan. Political relations between the two countries are unlikely to become stable soon, therefore it is not advisable to increase dependence on India, he said adding that strategic considerations also matter in the overall scenario. He said that enhanced bilateral trade with India will boost human traffic flow making it difficult to check infiltration. A strain in relations can push the two countries to ditch commitments as experienced in past. India would only be justified in demanding special status if it removes trade barriers and provides opportunities to Pakistani exporters, he said. Indian should also change its attitude which is compelling Pakistan to divert resources to less desirable sectors which is barring development and pushing poverty, said Dr Mughal.