Indo-Pakistan trade ties

Pakistan's opening up to India, speaking in terms of trade and economic relations, has rightly been termed the marking of 'a small step' for the world trading system but surely 'a giant step' for Islamabad. At a time when Pakistan is struggling to have an economic growth rate of 3.0 per cent, over the border Indian economy is growing at about 8.0 per cent a year. Pakistan's new-look foreign policy has therefore come out of the shell to embrace the economic realities of the day. It is now all set to grant India the status of the most favoured nation although India accorded the same 15 years ago. Easing visa restrictions, customs procedures and other measures required to facilitate the process are likely to follow soon. In fact, Pakistan's grand scheme includes both China and India -fast growing economies as they are - for creation of a mammoth regional trade grouping after the model of North American Free Trade Agreement. There is nothing wrong for Pakistan to consider its bilateral trade relations with India as a prop for coming out of its moribund economy, particularly when its so-long bitter rival has withdrawn its objection from preferential European Union (EU) market access for it after last year's floods. If this is a policy shift for Pakistan, it is no less an economic review for New Delhi. If the two nations do come closer, no one else has reasons to complain. But when economic interests are dictated by unfair considerations or existing arrangements are by-passed undermining in the process others' interests, there is every right for the aggrieved partyparties to move for protection of the same. Since India, Pakistan and Bangladesh along with other nations of South Asia are members of a trade forum called South Asian Free Trade Area, it is only natural that avenues were explored to see how best it could be made an effective setup. The other point that asks for a closer scrutiny is the impact 75 commodities from Pakistan enjoying preferential access to the EU market will have on export from Bangladesh to the same market. Let this be noted that the EU is the largest importer of Bangladeshi goods. Caution should be taken to see that tariff concession offered to Pakistan does in no way harm Bangladesh's trade and economic interests. Pakistan's export to the EU estimated at US$ 1.2 billion is likely to increase by $136 million on account of the confessional access of its goods to that market. Economic compulsions are definitely proving stronger for both Pakistan and India to form a trade partnership but if it is inclusive rather than exclusive, so much the better for all nations in the region. Undeniably, every nation is a competitor of every other nation but then economic realities today have proved beyond doubt that collectively there is a better chance of making more gains than it is bilaterally or trilaterally possible.