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CUTS International

Published Date: Dec 11, 2013

Neighbours and boundaries cannot be changed, but mind sets will need to be changed: Khurram Dastagir Khan

"Neighbours and boundaries cannot be changed, but mind
sets will need to be changed", said Mr. Khurram Dastagir
Khan, Minister of State for Commerce and Textile
Industry, Pakistan.

He was speaking at the 11th CUTS 30th Anniversary
Lecture event organised by CUTS International and
Sustainable Development Policy Institute here today
(http://www.cuts-international.org/30thAnniversaryLectures/).

"Global integration is extremely important in order to
strengthen trade relations among countries.
Operationalization of SAFTA was a limited success story
for India and Pakistan, as inter-regional trade has not
been effective though there is huge potential, said Mr
Khan. "Thus, we would need to recognise liberalisation
of trade among SAFTA countries, ensure more market
access and create level playing field among the
nations".

Mr Khan emphasised that we need to have consistent and
sustainable relation to get over with poverty in the
region. Bilateral trade equation is complex and any
untoward incident can derail the process of dialogue.
The need of the hour is for relations between India and
Pakistan to be uninterruptable.

He said that one question which is often asked by
stakeholders in Pakistan i.e. will expansion of trade
with India benefit to Pakistan or endanger its domestic
industries.

According to Mr. Khan, the trade between India and
Pakistan is a win-win situation for both the countries,
as supported by studies done undertaken by CUTS and SDPI.

He shared with the audience that even a 10% share of
access to markets in India will double the market boom
in Pakistan. He emphasised that we cannot have a
favourable trade balance with all countries and he
acknowledged that we do have a negative trade balance
with India.

Khan said that it was India who granted MFN to Pakistan
in 1996, however, instead of trade rising between the
countries, our experience has been the opposite. He
emphasised that it is imperative that India must reduce
the non-tariff barriers and provide a level playing
field. What we want is to have a non-discriminatory
access to both countries’ economies.

"It is a well-known fact that bilateral trade between
India and Pakistan is currently far below what it
ideally should be. There is ample literary evidence
available on the underutilization of trade opportunities
that exists between India and Pakistan" said by Mr.
Pradeep S Mehta, Secretary General, CUTS International.

While both countries have been successful in bringing
forth trade reforms that advanced their respective
levels of trade integration with other trading partners,
leaders of both countries have been apprehensive about
exploring trade with each other, the main reason being a
longstanding miscalculation of the net of economic gains
and political losses out of trade.

Mehta further mentioned, CUTS studies have shown that
facilitating trade in these products can easily triple
the current volume of bilateral trade and take to about
US$12bn per annum. The benefits to consumers and
producers in both countries owing to enhanced bilateral
trade would be manifold.

In conclusion, Mr Mehta mentioned that it is heartening
to note that the track 2 level efforts that we have been
carrying forward with partner organizations like SDPI
and a large number of stakeholders from both countries
are gaining traction.

Our effort has been one of the important ingredients in
keeping alive the bilateral dialogue process. We need to
expand the scope and reach of the ongoing dialogues by
including and participating in a wider set of
stakeholders in the dialogues. One of the tools that we
have in mind is that of civil-military dialogues on
areas of bilateral economic cooperation including trade.

Also speaking on the occasion were Mr. Aqdas Ali Kazmi,
Former Joint Chief Economist, Planning Commission of
Pakistan; Mr. Amin Hashwani, Hashwani Group, Karachi;
Mr. Shaban Khalid, President, Islamabad Chamber of
Commerce and Industries, Islamabad and Dr T C A Raghavan,
High Commissioner of India to Pakistan, who Chaired the
session.

Dr Raghavan briefly spoke about the importance of
Pakistan and India relationship and the fact that they
both face nearly the same challenges. Thus, it important
for effective collaboration between India and Pakistan,
as one can learn from other and he was of the opinion
that such collaborations would be fruitful.

According to Dr Raghavan, there are two key issues one
needs to focus on i.e. Policy i.e. how do we move
towards a more stable trade relationship and challenges
pertaining to infrastructure. He emphasised on the need
for longer trading hours, opening of more border
crossing points and that all trading points should be
open for all trading items between the countries.

Dr Hashwani, laid emphasis on the need to privatise the
peace process. According to him, businesses don’t have
baggage and they can be effective problem solvers. Thus,
the governments on both the sides, should put the
businesses on peace process and they should be part of
the decision making process.

Towards the end, he emphasised that there is need to
connect emotionally, if we want nations to come
together. He suggested using cricket as a platform to
ensure better integration among the countries and
suggested formation of a regional team (India and
Pakistan players) and rest of the world.

Mr. Shaban Khalid, mentioned that the business community
is excited about the future. He drew the attention of
the audience on the Negative and Positive List and
provided an example i.e. steel is being imported into
Pakistan from India via Dubai, which increases the cost
of the product. Thus, there is a need to advocate for
review of negative and positive list between the
countries.

Mr Khalid also emphasised on the need for harmonisation
of quality standards. He mentioned that we have
different quality standards in both countries, which has
led to a lot of problem. He gave the example of cement
from Pakistan lying on Indian borders because of
certification issues.

The Minister, Mr Khan also released a CUTS publication:
"Building Peace through Trade-The Future of
India-Pakistan Trade & Economic Relations".

There was a lively Q&A session, when numerous micro and
macro issues were raised by the over 100 participants in
the hall.