Pakistan and India are poised to sign three agreements later this month when the commerce secretaries of the two countries meet to facilitate the expansion of trade in line with the requirements of the Most Favoured Nation (MFN) status that Pakistan granted to India some time back. These agreements relate to cooperation in customs affairs, action on complaints about trade matters and acceptance of each other’s quality control authority, PAQCA and BIS. A noteworthy point in India’s scheme of developing bilateral commercial relations, according to reliable sources, is that while allowing investment by Pakistani entrepreneurs in India, it has conditioned it on being channelled through the Indian government. However, it is of interest to keep in mind here that earlier it had adopted the same policy towards another neighbouring Muslim country, Bangladesh, though for the rest of the world with which New Delhi has this arrangement, there is no such restriction; they can directly do investment without taking the government’s into confidence. Reportedly, India has also reduced the sensitive items list by about 30 percent; thus, allowing the additional import of 106 textile products and 155 agricultural goods from Pakistan.

Apart from these measures aimed at increasing the scope of bilateral trade, negotiations are under way to make it possible for Pakistan to get 500MW of electricity from across the border. Two rounds of talks have already taken place to thrash out the issue and the third is scheduled in October. Similarly, discussions will be held soon to finalise arrangements for the import of petroleum products, including LNG, from India.

It sounds ridiculous that without the resolution of crucial disputes with India, Pakistan should be developing trade ties with it. We have every justification for demanding the settlement of at least the core issue of Kashmir before entering into any commercial arrangement with New Delhi, as we have traditionally maintained. As common sense dictates, MFN status would open the floodgates for Indian products to Pakistan which would find it hard to send across its own goods not only because of their high cost of production, but also the hurdles New Delhi invariably places on their import. The emerging scenario in which cheaper Indian products would swamp Pakistan’s market, driving out of competition its own manufactured goods and agricultural produce, does not bode well for our already struggling economy. One would have wished that the authorities addressed the causes (loadshedding) for the closure of an increasing number of industrial units as well as the causes (phenomenally high tariff) for so raising the cost of production that the goods go out of competition, before rushing into giving the MFN status.

Add to this the neglect of the Kashmir dispute with the prospect of turning Pakistan into a wasteland, and we have a gloomy future. There is no other way to retrieve the situation but to insist that time has come for India to give up its intransigence and enter into serious negotiations with Pakistan to settle Kashmir and other disputes in a just and fair manner.