ISLAMABAD, April 28: The government put the political issues like Kashmir aside and offered to grant India the most favoured nation (MFN) status on Thursday, linking it only with the removal of non-tariff barriers by the latter. At the conclusion of a two-day meeting, the Pakistani delegation, headed by Commerce Secretary Zafar Mahmood, assured the Indians that the MFN status would be granted by October.

The Indian delegation was led by Commerce Secretary Rahul Khullar.

Pakistan also agreed to negotiate a bilateral preferential treaty by reducing customs duties on products of export interest of both countries.

At a press conference after the meeting, Mr Mahmood claimed that Pakistan had never linked MFN with political issues, including Kashmir, in the past.

But his statement was contradicted by former commerce secretary Tasneem Noorani, who had initiated talks on trade under the composite dialogue with India in 2004-05. He told Dawn that the MFN had been linked at that time with progress on political issues and elimination of barriers by the Indian government.

High Commissioner to India Shahid Malik told Dawn that liberalisation of the trade regime with India would boost Pakistan’s economic growth. Pakistani businessmen would get cheaper raw material which could help increase exports, he added.

When asked about the Indian claim that there were no Pakistan-specific trade barriers, Mr Malik said Pakistan had identified 27 barriers in 2007 which hindered its exports to India. But, he added, no action had been taken by India so far.

For example, India rejected 90 per cent visas to Pakistani businessmen which, he said, was one of the barriers in promotion of trade.

Zafar Mahmood said that no Pakistani businessmen had objected to the grant of MFN status to India. “We are in the process of getting feedback on the issue from all stakeholders, including chambers of commerce,” he said, adding that it was a desire of the business community to grant the MFN status to India.

In reply to a question, Mr Mahmood said that Pakistan would keep a negative list with India to protect the interest of domestic industry. He said Pakistan was trading on preferential lines with China, but its industry was not facing any problem. “We have nothing to fear in liberalising bilateral trade with India.”

He said the issue of Delhi’s opposition at WTO to European Union’s decision to provide duty-free access to Pakistani goods was not raised with the Indians during the meeting.

He said Pakistan had an open investment regime and would welcome Indian investments. There were no restrictions on opening of bank branches subject to fulfilling conditions laid down by central banks of the two countries, he added.

A joint statement of 20 points agreed by the two sides was issued after the talks.

It was agreed that a group of experts from the two countries would examine the feasibility of trading electricity. The group will be formed by the end of June and its first meeting is expected before October.

The group will address issues like suitable routes for transmission lines and funding mechanism.

A group of experts will be set up before June 15 for trading all types of petroleum products. It will discuss trade arrangements, building of cross-border pipelines and use of road/rail route, including that of Munabao-Khokrapar.

The first meeting of the group is expected to be held before September.

The two sides agreed to form a working group to identify sector-specific barriers to trade. Its first meeting will be held by September.

They agreed to open a second gate at the Wagah border and new dedicated roads for passenger and freight traffic. A joint technical group for promotion of trade and travel will meet in June.

Pakistan agreed to remove restrictions on land route trade with India before October. A sub-group on customs cooperation will meet in New Delhi before June 15. It was agreed to establish regular direct contact on matters relating to delay in clearance of trade consignments, trade document requirements and other customs cooperation.

A joint working group will monitor implementation of the decisions taken at the meeting. Commerce secretaries will meet biannually to oversee the functioning of the working group.

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