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The Express Tribune

Published Date: Feb 25, 2014

Trouble moving forward No NDMA status for India unless concerns addressed

In yet another setback to the already flagging trade
normalisation process, Pakistan said on Monday it would not enter into any
bilateral trade agreement until India addressed core concerns relating to
non-tariff barriers hampering exports of Pakistani goods.

Pakistan would not grant Non-Discriminatory Market Access
(NDMA) to India until New Delhi addressed Islamabad’s concerns about non-tariff
barriers, said Sartaj Aziz, Adviser to Prime Minister on National Security and
Foreign Affairs.

He was responding to a media question whether by the end of
February Pakistan would grant NDMA status to India. The term NDMA has been
coined by both the nations after the Most Favoured Nation (MFN) status
triggered fierce resistance.

The difference between NDMA and MFN is that the latter
enjoys protection under the World Trade Organization Treaty while the former
would primarily be a bilateral arrangement.

Aziz was speaking after attending a seminar on “Economic
Policies for Inclusive and Sustainable Development in South Asia”. The
conference was jointly arranged by Germany’s Friedrich Ebert Stiftung institute
and Sustainable Development Policy Institute.

The German institute had launched a project called “South
Asia Regional Forum on Economy of Tomorrow” about two years ago. Its main
objective is to identify an alternative development path for growth and forming
coalitions for its implementation.

There were expectations that New Delhi would soon announce
some concessions and relax restrictions on movement of goods. In response,
Pakistan would approve NDMA status for New Delhi within a week.

Pakistan’s reluctance to step up trade normalisation highlights
the deep-rooted mistrust between the two countries. Earlier, Indian commerce
minister cancelled a scheduled three-day visit to Pakistan, saying Islamabad
was not fulfilling its commitments.

According to analysts, the non-tariff barriers are adversely
affecting Pakistan’s exports. For instance, despite granting MFN status to
Pakistan by India in 1996, Pakistan’s exports to India remained negligible
compared to Indian exports to Pakistan.

The obstacles to trade normalisation are also hurting trade
with the South Asian region and between South Asia and Central Asia.

Aziz said without a rapid growth Pakistan could not solve
problems of poverty and security. The country should take inspiration from
India, China and Bangladesh, he added, while admiring their growth models.

He pointed out that Pakistan was aiming for 5% growth in the
next three years while India was not happy even with 5% and aspiring for 7-8%
economic expansion.

He emphasised the need for inclusive and sustainable growth,
which also benefitted marginalised groups of society. He said a prerequisite to
inclusive growth was land reforms that also ensured benefits to small
landholders.

He said the mindset of the country’s elite was also one of
the prerequisites. The extent of decentralisation and attitude of bureaucracy
were also necessary for inclusive growth. Terms of trade in agriculture were
also one of the prerequisites for inclusive growth.

Speaking on the occasion, former finance minister Dr Hafiz
Pasha said Pakistan fared better than many South Asian countries in reducing
poverty and ensuring equitable distribution of wealth.

Referring to a study of the World Bank that summarised
trends between 1980 and 2008, Pasha said Pakistan managed to reduce poverty by
two-thirds despite the fact that per capita income grew on average 2.5% per
annum. He described the achievement as striking and remarkable.

According to him, during the period under review, employment
increased 3% per annum compared to less than 2% in South Asian countries.