The commerce secretaries of India and Pakistan have agreed on a number of measures to 'normalise trade as a follow-up to Pakistan having given India Most Favoured Nation (MFN) status. These measures are supposed to lead to a normalisation of trade between the two South Asian neighbours. The central aspect will be a moving from a 'positive list of items which can be traded, as at present, to a 'negative list of items which cannot be traded. Pakistan is supposed to notify the 'negative list by February, and the lists would be phased out by the end of the year. In the whole discussion, Pakistan was as careful as India to avoid any mention of the real issue dividing the two countries, that of Kashmir. Apart from Kashmir, the agreement between the two countries would also serve to destroy Pakistani industry, when faced with a flood of Indian goods being dumped. The grant of MFN status was bad enough, but the forward movement must raise the prospect not just of enhanced trade with India, but also the operationalisation of the provisions of the Afghan Transit Trade agreement allowing India to move goods to Afghanistan by road. As if the MFN goods were not enough, the ATT goods would open the floodgates to Indian goods within Pakistan. In all of this, two factors are not accounted for. First comes the Kashmir issue, which intimately concerns Pakistan because, as Quaid-i-Azam put it, Kashmir is Pakistans jugular vein, and thus it is very much concerned with Indias illegal occupation of the state and its refusal to allow its people the exercise of their right of self-determination. Second comes the fact that India takes a mercantilist view of foreign trade, and the MFN status followed by the latest measures are aimed at increasing Indian exports, with Indian industry protected against all comers by a slew of non-tariff barriers which even the recent SAARC Summit was obliged to take notice of. If the increase in trade also includes any increase in Indian imports, the latest measures would be deemed a failure. The present government is being taken along a path that suits the USA because it wishes to reward India by helping it solve its regional problems. The USA should know that India, irrespective of justice and sustainability, wants to continue its illegal occupation of Kashmir and to obtain all the benefits of increased trade. None of the parties concerned should have any illusions that the use of trade to improve Pak-India relations will fail, as will any efforts not giving the Kashmiri people their inalienable right of self-determination.