Prime Minister Yousuf Raza Gilani with his Indian counterpart Manmohan Singh.
ISLAMABAD: Commerce secretaries of Pakistan and India meet here on Wednesday in what has been described here as a new effort to expand bilateral trade. The talks have remained stalled since the Mumbai terrorist attacks about two years ago.
During the two-day talks, a number of issues are expected to be taken up for furthering commercial ties, an area where the Indian side has been eager to take the dialogue ahead to any extent, despite there being no progress in other areas of concern like Siachen and Kashmir.
Trade talks were part of the composite dialogue that was launched seven years ago for restoring normal relations between the two countries.
An official in the commerce ministry told Dawn on Tuesday that although Pakistan had no specific agenda for the meeting it would raise the issue of Indian obstruction to approval of the European Union trade package at the Geneva-based WTO.
Indian Commerce Secretary Rahul Khullar arrived here on Tuesday at the head of a six-member delegation which will be assisted by the Indian high commissioner, deputy head of mission and commercial consul. It is learnt that Pakistan will press for an end to the Indian opposition to the EU package which will be taken up for consideration early next month at the WTO.
The Indian government has blocked the passage of a waiver from WTO members for implementation of the package to help flood-affected people in Pakistan.
Sources said that Pakistan could offer to consider more items of Indian interest in the positive trade list.
The Indian delegation was expected to hand over a list of items to the Pakistani side, the source added.
Pakistan unilaterally expanded the positive list in February, setting the stage for full resumption of trade talks. The items on the positive list, 1,946 goods, can be traded between the two countries.
According to official figures, Pakistan added 42 items to the list during 1979 to 1986, 249 items in 1988-89, 328 in 1989-2000, 14 in 1998-99, six in 2000-01, 10 in 2001-02, 78 in 2002-03, 80 in 2004-05, sugar cement and oats in 2005-06 and 438 products in 2008.
The list of tradable products with India had 591 items in 1997 and the number increased to 1,938 in 2008.
This means that the country has diverted its potential global trade of over $5 billion towards India by including new importable items in the positive list.
However, the opportunity was not used effectively because of tension between the two countries in the wake of the Mumbai attacks.
The Indian government has already offered to export electricity and petroleum products to Pakistan. “This offer will be discussed at length at the meeting,” an official said.
The Indian delegation may raise the issue of most-favoured nation (MFN) status with Pakistan’s top tax officials. India accorded the MFN status to Pakistan in 1996.
This is unlikely to be a crucial issue because the balance of trade is heavily tilted in favour of India. Pakistan’s exports to India are worth $270 million and imports $1.2 billion.
But informal trade flows between the two countries through third countries like the UAE run into billions of dollars.
Another official said Pakistan had not benefited from the composite dialogue negotiations as its exports were still facing numerous barriers in the Indian market.
Some businessmen recently voiced their concern over Indian buyers’ reluctance to buy products from Pakistan after the Mumbai attacks. “Some people are issuing statements equating buying any products from Pakistan to sponsoring terrorism in India,” an Islamabad-based businessman said. How could a Pakistani exporter get contracts from Indian buyers in the environment created by such baseless allegations, he asked.
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