Mfn Status to India

MFN to India The Pakistani eyeshot look into Paper 2012 Zoya Mohsin Awan BBA2K9(s) 4/24/2012 Hatred, enmity, war a few of the some an another(prenominal)(prenominal) things we come to with our neighboring rude India. 1965, 1975 and the Kargil War of 1999 with Kashmir already a b unrivaled of contention, Pakistan has skipped loops by still gaining thought of granting just about promote Nation Status to India on the handling t fitting. Since WTOs Charter requires every signatory to grant MFN military position to other WTO members, on that point arent many ifs and furthers to ponder.What real is open for make do is whether we want to sw apiece(prenominal)ow the pill now, on our terms, or later when it susceptibility be forced down our throats on person elses terms (India still hasnt hold inn the violation of this basic rule to WTO). No matter which stance we chose, cardinal thing is certain this is the deal which defines the future(a) course of Pakistan. And th is is the deal which mogul be our chance of actually becoming what we strike the potency to become Pakistan. Introduction Pakistan and India go for been under the lime-light ever since the partition of the sub-continent.During the 1960s, Pakistan was labelled the Asian tiger slice India the wicket Case. Today however, the roles urinate been reversed. Through- issue this period, the Indo-Pak wad kept showing a vary trend to the negative side as shown by the figure below The pile of traffic has remained low generally. MFN operate ons towards the relaxation of profession which not altogether would split up a forward momentum to the integration of twain(prenominal) countries frugalally, but would also compound their image on the international platform.Cheaper be of production, exchange of skilled labor, education influx and the worry of the US and europiuman scrimping into this comp matchlessnt would process give the in one sheath coveted locating of S byh A sia, tooshie to the forces who originated it. Hence, a carefully reconciled MFN location should be granted to India in coif to achieve the long-term prosperity of our country. The scotch Perspective aft(prenominal) going finished a large array of natural debating this let out, two schools of thoughts generally emerge the protagonists, who brave the idea of non-discriminatory trade mingled with some(prenominal) countries.And the antagonists, who believe such a measure, would only harm the frugality by let free-flow of cheaper Indian legals into the Pakistani foodstuff and well, get our options down on the Kashmir issue. The former moots, that by doing so not only do we get devil to a capableness market which is 8 to 9 measure great than ours, but it also gives us a dependable foundation of unwashed dependence to minimize the security concerns across the duck.India is swooping rooks and pawns off the economic chess identity card towards becoming the third big gest economy of the world, in the startle drift it leads us up to a stalemate, this government agencyment could be put to advantage for some(prenominal) countries. After all, India cannot keep prospering in a sustained manner if it neighbored by a nation terrorized by political and economic destabilization. So it would be an opportune time for Pakistan to bask in Indias glory. Practically speaking, this is the only modal value we could work towards a productive political debate for twain the countries especially since the environmental flesh after Mumbai attacks of 2008.After all, a long-standing heartsease line of battle can only nurture, if it guards within the deeply ingrained seed of mutual benefit. On the other hand, the antagonists argument that this free-trade would open the floodgates to cheaper Indian products which in turn could harm Pakistans economy majorly. However, this could be a imperious impact upon the Pakistani consumer since they profits nettle to im ported Indian goods at a lower price. We also nonplus Taiwan, Hong Kong and withal China who are on our MFN describe and pack bombarded us with fierce disputation in the past.Yet if our industries did not cave in to them and withheld own-selves then why fear India? Besides, if the Pakistani market demands a particular good from India, MFN military position or not, it would be contraband cross b pitch anyway so why not legalize it to brace our own interests. Take the example of the Indian Cinema, years and years of culture seeped by means of the media towards us, while the Wagha Border remained bolted shut. The only issue here is, the Pakistani tax-payer is paying outlying(prenominal) more than it usually would submit referable to the added layers of cost of go-between trade via Dubai.Conversely, this newsworthiness has drawn a mixed reception from all the quarters of the problem community. Some, comparable the auto-parts, pharmaceuticals and consumer goods industries , face hard-hitting competition. They fear that India is trac slacken bankrupt quality goods at a lower cost of production cod to the economies of scale. On the other hand, industries ilk textile, pastime and agriculture are in kick upstairs of granting the Most Favored Nation status to India.These industries argue that trade estimated trade of more or less $13 one thousand million with India is being carried out illegally via cross-border smuggling and personal baggage. Also, corroboratory trade of an approximate worth of aroung $3-4 billion via third parties like UAE, Afghanistan, and Bangladesh is costing us a higher mark-up since the intermediary adds up their cost as well. So it is remedy to legitimize this ongoing process and reap some probable gain out of this situation. In support of this argument, I advert the former Finance Minister of Pakistan and valetudinarianism President of the World Bank, Shahid Javed Burki what economics told us is that when trade betwee n a long and small economy started, smaller economy always benefited from that and what I believe that at macro level Pakistan would benefit, especially in industrial and agricultural sectors. Some sectors might get hurt, but not practically as feared. Published in The bear witness Tribune, April 3rd, 2012. Free-trade spurs competitiveness which would encourage our local industries to hassle their standards and produce quality goods. It has never really hurt any country and all the benefits from recent experience in the European nub, Asian etc, are in that location for everyone to see.It would in fact take a scalawag from the book of John Locke by fate us attain a joint ground of mutual-coexistence and economic interdependence to entrust upon. The Regional Perspective southeast vitamin E Asia by abroad-spectrum consensus is the least integrated of vicinitys economically due to the disparity and animosity between Pakistan and India. Regional cooperation is must to roo t for obese investment in todays globalised world. Diminutive and splintered markets do not attract endowment by substantial investors.The European Union may be try to save the euro but one of Europes most monumental successes is the construct of the frontier-free single market where goods, services and people can circulate untrammeled by border restrictions. Similarly, Association of southeasterly eastern United States Asian Markets (ASEAN) is working towards building a prevalent market for the whole region by following the European Unions lead. It is high time India and Pakistan bushel aside their differences (or at least take small cadences towards resolving them) for the general welfare of the whole region.If we create an economic bloc like the sorts of EU or Middle-East, it would ensure a better talk terms position vis-a-vis other countries. in spite of appearance the protective walls of regional economies, both countries would achieve specialization in various sub -sectors of the manufacture. Moreover, the fortify of zygomorphous trade would provide a mutual cushion against financial or stock market shocks. With these two countries beat into one economic power, all of South Asia could become a better place monetarily.Another aspect of the MFN status would be to make up the connectivity with central Asia. If Indian goods are permitted to journey through Pakistan, then the whole region will benefit. For illustration, the Indian state of Punjab is several(prenominal) thousand kilometers away from the seaports, but the farmers in that respect and in the nearby states would be able to send their agricultural products to Central Asia if these are allowed freely through Pakistan. Same goes for Indian textiles and all the landlocked states which would be facilitated by their proximity to the Pakistani ports.The advent of MFN status will also help spot the implementation of the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas channel, as a n ew environment of trust and cooperation prevails. regular(a) more significantly, natural gas via pipeline will provide the Indian and talent deprived Pakistani industry with a massive boost in sectors ranging from petrochemicals to fertilizers galvanic power production will cast up dramatically and a myriad of new commercial uses will be supported. In diminish Pakistan could profit from the easy pass over tip off that it would receive as a royal house and it would only be possible if MFN status is rendered toIndia. Social Perspective Trade is one kind mobilizer which would generate benefits for both countries as well as their people. Talking more or less Pakistan singularly, 61. 3% of the people (according to the HDI reports) in Pakistan pass away below the poverty line. With a 15. 4% un job rate, Pakistan should not forego any opportunity that provides job opportunities to its masses. Poverty is but a challenge that can be get the best by pursuing sustained pro-poor p olicies. iodine such policy is the granting of MFN status to India and lifting the trade barriers across border.India is a gigantic market and would provide a smaller country like Pakistan with access to a greater market and change magnitude the demand for their product. This in turn would hoist the output and employment levels in both countries. Secondly, Since India shares a border with us, the freight cost and ease of access would increase the flow of a various product base at a lower cost, saving our countrys foreign exchange substantially. Pakistan could turn in entree to quality products in sectors like IT, electronics, displace gear etc.Thirdly, this legitimization might curb social atrocities like smuggling and illicit trade. This would increase the government revenue for Pakistan since all the goods would be traded under their accord. Another faucet where India surpasses many others in this region is its IT infrastructure. India is expected to contain the next Silicon Valley of the speed of light considering its growth in the IT sector. Pakistan could benefit vastly from the inflow of this technology while India could gain advantage by the progress Pakistan has make in its agriculture and industry.Both countries could complement each others posits and strengths and because prove beneficial to their people. The Cultural Perspective With the advent of the prospect of MFN policy, both countries have started aiming towards more amiable business conditions therefrom easier visa-processing procedures have been bought on the discussion table since November 14, 2011. This would invigorate the static tourism industry between both countries. Both have many historical and religious places significant to the other.This would not only generate superfluous foreign exchange revenue, it would also help increase the people-to-people contact between both countries. Eventually, once the masses start interacting, peace would follow automatically between both regions. Generally, the relations between once brethren Pakistani and Indians are cordial and friendly. A common example would be how well Pakistanis and Indians gelatin when theyre living abroad, out of the catch of their respectively acrid medias. Delegations of trade bodies, academics, artists, sportsmen, social scientists and media personnel could be exchanged.This would invoke the once unbreakable cultural bond between both nations considering how much value we place upon common games like cricket and hockey. Threats and Concerns Although the benefits of granting the needful MFN status to India are tremendous, every step Pakistan takes should be guarded and well-thought of. There is no harm in protecting ones own-self against any potential threats that might occur due to any hurried move we make, after all there are years of enmity that we need to overcome forward taking bulky steps.Firstly, WTO provisions allow members to impose safeguards constrictive imports (for temp orary periods) should such imports unfairly or seriously injure domestic producers. Pakistan should rightfully use this clause in case Indian goods start flooding the Pakistani market and ruin local producers. After all, trade should be liberalized but not at the cost of local industries. The insurgent issue that should be considered is that India, despite its loosening of trade to Pakistan in 1993, is still a restricting domain to us due to high tariff and non-tariff barriers.Prohibitive NTBs have made our exports to India highly expensive while the trade deficit tilts highly towards Pakistan. We should bring this issue on the WTO summits and appeal to India to both reduce these NTBs and other trade restricting clauses or grant a similar status quo to India. Pakistans business community generally has reservations because it does not have competitive pricing in many industries and goods. The automotive and pharmaceutical industries are gear up examples of apprehension at grantin g India access to our market.In order to maintain local stabilization, we need to have all stakeholders to this situation aboard before we chalk out any definitive plan. Concessions should be granted to concerned parties for instance, the gondola industry should be assured that auto-parts would be imported instead of wholly assembled cars. Unbridled, unmanaged and rampant liberalization of trade would lead to crazy house in any economy huge or small. Or policies could be hypothesise in such a way that they would be strict at first (as Indias have been since 1993) and then slowly tighten the nose and India shows signs of economic conciliation.Conclusion In retrospect, is it really possible for Pakistan to identify India with bilateral economic prosperity, cross-border trade of culture, and easier visa transit? Political differences between India and Pakistan aside, there is no harm in trading with each other. Our leaders must take into esteem long-term benefits. India has a much better managed economy, but it cannot afford openness. On the other hand, Pakistans economy is not so closed, and it could take advantage in this regard.Pakistan, like other developing countries, has strong interest in the maintenance and strengthening of the three-cornered rules-based trading system represented by the WTO. The current situation in South Asia indicates that there are large untapped opportunities for intra-regional trade that could be mutually beneficial. diplomatic efforts towards this objective however utopian, is well perceived to be the beginning of soft-ties between both countries. After all, it is said that where diplomacy ends the potential for war begins to take shape.Bibliography 1) Beteille, T. (2011). Pakistans Most Favored Nation Status to India A Win-Win for the Region? blogs. worldbank. org . 2) Brown, C. (2006). The Implications of Liberalization of Trade with India. 3) Dr Monnoo, Kamal (2012). MFN status to India An analysis www. nation. com. pk . 4) Gupta, Sorojit. (2012). Pakistan to grant MFN status to India this year. www. timesofindia. com. 5) snap Newspaper and Articles. 1 . http//www. ishtiaqahmad. com/item_display. aspx? isting_id=725&listing_type=1 2 . http//blogs. worldbank. org/endpovertyinsouthasia/pakistan%E2%80%99s-most-favored-nation-status-india-win-win-region 3 . http//www. eastasiaforum. org/2011/12/03/what-the-most-favoured-nation-decision-means-for-india-and-pakistan/ 4 . http//www. himalmag. com/component/content/article/3644-magic-pipes. hypertext markup language 5 . http//nayyab. wordpress. com/2010/05/08/rising-unemployment-in-pakistan/ 6 . http//www. aninews. in/newsdetail2/story22210/india-welcomes-trade-ties-with-pak-eyes-mfn-visa-easing-process. hypertext mark-up language