ISLAMABAD: The government has promised to complete the negative list for trade with India by the end of this month but differences between two key ministries concerned on certain points are making it difficult to give it a final shape.

The commerce ministry wants only a limited number of items on the negative list and its total elimination in nine months, but the industries ministry proposes that the phasing out of the list should begin three years after its notification and it should be made ineffective in five years.

Commerce Secretary Zafar Mahmood, who is the architect of the policy of trade liberalisation with India, has announced that the cabinet will take a final decision on Feb 29. “All the ministers concerned will be there to take a decision on the issue,” he said.

On Feb 14, the prime minister had asked the commerce ministry to hold consultations with all ministries before preparing the list.

The ministry of industries has forwarded to the commerce ministry the reservations of local industries which have proposed that more products should be added to the list of 636 items.

“We have consulted all stakeholders, but it may not be possible to consider all their proposals,” Mr Mahmood said, adding that the consultation process was still under way.

He said that in accordance with the commitment made by Commerce Minister Makhdoom Amin Fahim to the Indian government during his visit to New Delhi last year the negative list should be eliminated by the end of this year before giving the statues of most-favoured nation to that country.

Nabeel Hashmi, Chairman of the Pakistan Association of Automotive Parts & Accessories’ Manufacturers, told Dawn that the commerce ministry had contacted his association six months ago and asked it to hold consultations with the WTO Cell in the Trade Development Authority of Pakistan, a subsidiary of the ministry, to finalise recommendations. But the WTO cell still did not know what was happening and how the negative list would be eventually prepared, he added.

Mr Hashmi said that his association was not against trade with India. “We are only demanding that government departments should undertake necessary capacity building and introduce internal mechanism as done by India to ensure that our own industry will not suffer.”

But the whole machinery of the commerce ministry was working on a one-point agenda — to get the proposed summary approved by the cabinet in its next meeting. If approved, the summary will allow import of another 2,000 items from India in addition to 1,946 products already on the positive list.

At the same time, India has linked trade facilitation under Safta to Pakistan’s commitment at bilateral level and Safta sensitive list to Pakistan’s negative list.Pakistan has already made a 20 per cent reduction in the sensitive list under Safta. However, the commerce secretary defended the linking of a bilateral trade arrangement with a South Asian agreement.

The ministry of industries in its report said the trade liberalisation would succeed from the point of view of promoting growth of Pakistan’s complimentary measure in terms of assured supply of energy and mark-up at par with neighbours was necessary.

The local industry needed a level-playing field and consistency in policies to gain from trade openings, it said.

It further said that the phasing out should be linked to proportionate measures by India towards reduction of non-tariff barriers, etc. In case India failed to remove the trade barriers as committed for a given duration, phasing out should not be allowed for that year/period, it added.

Phasing out at each level will be carried out after an in-depth consultation with the ministry of industries and other stakeholders. The phasing out in each year was not to be done automatically but should be weighed against commensurate measures taken by India, said the report.