ISLAMABAD - Pakistan and India on Wednesday signed three agreements on customs cooperation, mutual recognition and redressal of trade grievances that would help in addressing the issues related to non-tariff barriers between the two countries.

On the other hand, Pakistan is expected to grant the Most Favoured Nation (MFN) status to India by the year-end as it is likely to phase out the Negative List by then.

Commerce Minister Amin Fahim and his Indian counterpart Anand Sharma witnessed the signing ceremony of the agreements, which would ensure confidence-building of the business community on both sides of the border and enable the two countries to address the issues related to non-tariff barriers systematically.

Addressing a joint press conference, Anand Sharma said economic engagement would bring prosperity, peace and stability in the region. “This is the option (trade) to normalise the relations between the two sides.” Through liberalisation of trade, the Indian minister said, Pakistani businessmen would get access to the market of 1.2 billion of population.

Talking about the opening of bank branches, Sharma said both the central banks were scheduled to hold a meeting in Mumbai in the first fortnight of next month. Fahim said the cabinet had deferred the summary of Negative List to address the concerns of relevant stakeholders, which would be done by end of this month.

According to a joint statement issued after the talks, a meeting of experts group on electricity is planned next month in Lahore to finalise the modalities of electricity supply between Pakistan and India. Similarly, both sides also agreed that first meeting of the expert group on trade in petroleum products would be held in the first week of March at New Delhi.

The joint statement further states the joint working group of the Ministry of Interior (Pakistan) and Ministry of Home Affairs (India) is working on agreement on visa facilitation for the movement of businessmen across the border.

It further says the Trade Development Authority of Pakistan (TDAP) has planned to organise Lifestyle Exhibition in New Delhi in March after the successful ‘India Show’ in Lahore.

The two ministers reiterated that both sides would adhere to the roadmap drawn up by the commerce secretaries for full normalisation of trade relations. It was agreed that Pakistan would move from a Positive List to a small Negative List by the end of this month. It is expected that the phasing out process would be completed by the end of 2012.

The understanding is that when the transition to Most Favoured Nation (MFN) is effected, all items other than those in the SAFTA Sensitive List would get preferential access at peak tariff level of 5 per cent by the December 31, 2012.

According to the statement, the commerce secretaries had also agreed to advance the preferential trading arrangement agenda through SAFTA. This too shall be done in a sequences manner.

When Pakistan will notify its Negative List, discussions shall be launched on reducing the size of the sensitive lists and drawing up a programme for phasing in tariff liberalisation on such items. Tariff liberalisation for up to 30 per cent on the Sensitive List shall be considered by India within the four-month period of the notification of a smaller list by Pakistan.

After the Negative List is dismantled and trade transitions fully to MFN/SAFTA basis, the sensitive lists shall undergo further liberalisation.

The Pakistani side expressed it deep appreciation for the support extended by India to get the EU package in the World Trade Organisation (WTO).

The Attari-Wagah border check post is expected to be operational by April 2012. Similarly, opening of Munabao/Khokharapar route for trade would also be explored in consultation with various stakeholders.

A joint working group is also scheduled to be constituted, which would report to the respective governments before the next the round of talks between the commerce secretaries.

Earlier, the Indian minister addressed the Pakistani business community and said they came here with open hearts.” We would work the betterment of the people of two countries,” he added.

Agencies add: Indian official sources said they had raised the Pakistani government’s decision to defer the finalisation of the Negative List and an assurance was given by Amin Fahim that Pakistan was committed to the timeframe it had earlier given to the New Delhi.

The commerce secretaries of the two countries on November 14-15 in New Delhi had agreed to widen market access for Indian goods by moving from a Positive List (PL) to Negative List (NL) trade regime by February.

Pakistan maintains a “positive list” of 1,945 items which are allowed to be imported from India.

The two countries struck a deal called Customs Cooperation Agreement to help avoid arbitrary stoppage of goods at each other’s ports.

A bilateral cooperation agreement on Mutual Recognition between Pakistan Standard and Quality Control Authority (PSQCA) and Bureau of Indian Standards (BIS) and agreement on redressal of trade grievances between Pakistan and India were also signed.