The Commerce Secretary level talks between India and Pakistan held in Islamabad on April 27 and April 28 were significant for a number of reasons.
For starters, trade talks between the two countries resumed after a hiatus of nearly three years. The talks were suspended following the Mumbai attacks. But the thaw emanating from the latest bout of 'cricket diplomacy' has paved the way for cooperation in the sphere of trade.
One of the significant outcomes of the renewed talks was Pakistan's commitment of granting MFN status to India by October. Till now, the issue of granting MFN status was linked to the Kashmir issue. Pakistan this time, according to Dawn, chose to link up such a concession to the removal of non-tariff barriers by India.
Interestingly, according to the news report, the Pakistan Commerce Secretary Mr Mahmood made the point that Pakistan had never linked MFN with political issues, including Kashmir, in the past. A formere Commerce Secretary, Tasneem Noorani, however contradicted Mahmood and said that the grant of MFN status was linked not only to the elimination of barriers but also with political issues such as Kashmir.
The next most important set of decisions were to set up groups of experts on both sides to examine the feasibility of trade in electricity, petroleum products, and other issues such as the building of cross border pipelines and expanding trade through road routes such as Wagah and Attari and train routes like Munabao and Khokhrapar.
The Indian side also expressed its unequivocal commitment to clearing the decks for increased trade with Pakistan. India assured that the new Integrated Check Post at Wagah would be fully functional by October. The two also pledged to increase trading hours on the Wagah-Attari border, facilitate faster movement of cargo and allow movement of large container trucks'. These measures are expected to considerably increase the bilateral trade, currently pegged at 2 billion.
While economic engagement between both the countries can only be lauded as it benefits both the sides economically, and creates a lobby of positive stakeholders, optimism over its long term consequences should be tempered with caution. It would be naïve to believe that one agreement between governments can change the bilateral dynamics, especially between two neighbours which have been at logger heads over several contentious issues since 1947. First, it does not take long for the countries to disengage on all fronts during times of tension, as was clearly evident after Mumbai. So what would happen to these talks in case tensions erupt in the not too distant future? There is a good possibility that governments would again suspend dialogue, and once again the lobby inimical to peace between both countries would gain currency.
Considering the tenuous nature of the bilateral relationship, experts believe it would be more useful to allow the business community a freer hand to negotiate policies of trade and commerce and not restrict them to offering recommendations. Such interest groups on both sides can exert considerable pressure on their respective governments to bridge the trust deficit. Imtiaz Alam, President of the South Asian Free Media Association, said :'One of the biggest impediments to economic cooperation between the two countries is the tardy pace of negotiations which can be attributed to the political set up and the bureaucracies. It is time that business chambers from both countries sat together to sort out problems and road blocs to trade'. Such a process will not only clear the road blocs to trade, but also ensure that the process of dialogue will have added momentum.
Secondly, the de-hyphenation of Kashmir from the question of granting MFN status to India does denote a shift from the past, but it remains to be seen whether the civilian government in Islamabad by taking such a measure expects some sort of 'face-saving' from the Indian side. Commenting on the trade talks between India and Pakistan, Fakhir Malik of The Jang, one of the most widely read newspapers in Pakistan, said that, ' while we welcome political and economic engagement between the two countries, it is also important that core issues such as Kashmir and Siachen are not obliterated, and are given serious consideration by India'.
Economic benefits of trade between the two countries, may strike a chord with a vast section of the Pakistani populace, but certainly not with the army and radical elements who have traditionally thrived on anti-India sentimentd. It remains to be seen how the civilian government strikes a balance between political constraints and economic challenges.
Tridivesh Singh Maini is Associate Fellow, ORF
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