Pakistan Grants MFN Status to India

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LAHORE: Pakistan’s Foreign Minister Hina Rabbani Khar said that the country has made a principled decision to grant the Most Favoured Nation (MFN) status to the neighbouring country of India. “A principled decision has been made to declare India as a Most Favoured Nation,” she said responding to a question in a point of order during a National Assembly session on Wednesday.

Khar said that positive signals are being received in connection to the outstanding disputes with India. “We want progress on not just one but all issues with India on a permanent basis besides the normalisation of bilateral relations,” she added.

In return for the MFN status grant, India has to lift non-tariff restrictions on imports from Pakistan. Currently, India opposes the European Union tariff concession package for Pakistan.

For many years, New Delhi has been demanding that Islamabad grant India MFN status, however, Pakistan has been refusing it. India granted this status to Pakistan in the mid-90s.

Both countries are members of the World Trade Organisation (WTO) and under the WTO agreements, the MFN principle is supposed to ensure that WTO members do not discriminate against one another, allowing all countries in the organisation to benefit equally from the lowest possible tariffs.

Currently, Pakistan has given access to India to less than 2,000 products on its positive list whereas there are 12,000 on the negative list. The status of negative and positive lists for trade between the neighbouring countries will be deleted as a result of the change in MFN status.

Two weeks ago, Pakistan’s Senior Minister for Commerce and Trade went to India on a five-day visit along with an 80-member delegation of leading Pakistani businessmen. The delegation visited India on the invitation of Indian Commerce Minister Anand Sharma. It was the first such official visit since the Mumbai attacks in November 2008, which derailed a budding peace process between the two countries.

In the recently concluded ministerial-level talks, the two countries vowed to double bilateral trade to $6 billion from $2.7 billion in three years.

In April this year, Pakistan had agreed, during a meeting of Commerce Ministry officials, to move towards the MFN status for India as soon as possible. The country has also been facing pressure from some politicians at home who want the MFN status to be linked to resolution of the longstanding Kashmir issue.

The APP of Pakistan adds: Hina Rabbani Khar said, “There are a number of achievements regarding relations with India. We have achieved ground on trade with India. For the first time in history, the Indian foreign minister attended the reception of the Pakistani foreign minister in New York.” She said responding to a question, “Pakistan wanted good relations with India by sticking to its principled stance on Jammu and Kashmir in accordance with the will of the Kashmiri people and to be determined through a free and fair plebiscite under the UN auspices.”

During the past three years, the Jammu and Kashmir dispute has been discussed during all bilateral interactions between the leadership of the two countries as well as at the Foreign Secretary level.

“I raised the Jammu and Kashmir issue with my Indian counterpart at the ministerial meeting in New Delhi in July 2011. The joint statement of the ministerial meeting underscored the need for continued discussion of Jammu and Kashmir in a purposeful and forward-looking manner with a view to finding a peaceful solution by narrowing divergences and building convergences,” she added.