ISLAMABAD, Sept 19: Pakistan and India will formally sign three crucial agreements on Thursday to give a fillip to economic activity between the two countries as they move ahead with the trade liberalisation process adopted a few months ago to build a legacy of peace and prosperity in the region.
“We have finalised these agreements related to customs cooperation, mutual recognition of required standards and the mechanism to address grievances for boosting the trade between the two countries”, Commerce Secretary Muneer Qureshi told Dawn on Wednesday.
A high-level 19-member Indian delegation led by the Indian commerce secretary arrived in Islamabad for two-day talks with his Pakistani counterpart beginning on Thursday.
Both countries have already vetted the draft agreements from their respective cabinets for signing. “This is one-way of facilitating the trade between the two countries”, Mr Qureshi remarked.
Pakistan has already flung open the doors for trade with India by raising the number of items that can be imported from that country from 1,946 to almost 5,600 since March 1, 2012.
To reciprocate this major shift in Pakistan’s policy towards India, the Indian government last month lifted its ban on foreign investment from Pakistan to create goodwill for further deepening the liberalisation process between the two countries.
An official source requesting anonymity told Dawn that the commerce ministry has also sent a summary to the cabinet seeking a blanket approval for import of all tradable items from India through the Wagha border.
Currently, the government has only allowed import of 135 items from India via the land route of Wagha. “This will be another milestone in trading relations with India”, the official said, especially as the land route will enhance bilateral trade volume.
An official statement issued said that the two sides will also discuss cooperation in broad areas including power and petroleum products along with the opening of bank branches in each other countries.
India has already shown willingness to export electricity and petroleum products to Pakistan. However, the two sides are fine-tuning the modalities for trade on petroleum and power sectors.
The issues of phasing out of a negative list and preferential arrangements under South Asia Free Trade Area (SAFTA) will also be discussed.
From January 1, 2013 India will be able to export all its products to Pakistan without restrictions. However, according to the official it has yet to be finalised whether this deadline will be met or extended further.
India exported goods worth $2.33 billion to Pakistan last year, while Pakistan’s exports amounted to just $330 million. The volume of bilateral trade is expected to reach $6 billion by 2014, mostly to the benefit of Indian exporters.
The official said the complete phasing out of the negative list is linked with removal of non-tariff barriers (NTBs) by India.
At the last meeting, India had linked trade facilitation under SAFTA to Pakistan’s commitment at the bilateral level and SAFTA sensitive list to Pakistan’s negative list. “We have already complied with the Indian demands on these two crucial issues”, the official said, adding now that it was India’s turn to reduce the sensitive list and remove the NTBs.
Pakistan has already identified a list of NTBs that was hurting Pakistan’s exports to India. However, India has more expertise in NTBs and defended it on the plea that technically these were not Pakistan-specific.
Pakistan has already made a 20 per cent reduction in the sensitive list under SAFTA and Islamabad has linked further phasing out to proportionate measures by India towards reduction of non-tariff barriers, etc.