Mfn Status to India

MFN to India The Pakistani stead Research Paper 2012 Zoya Mohsin Awan BBA2K9(s) 4/24/2012 Hatred, animosity, war a a few(prenominal) of the more things we associate with our neighboring uncouth India. 1965, 1975 and the Kargil War of 1999 with Kashmir already a bone of contention, Pakistan has skipped loops by merely bringing thought of collapseing approximately prosperous Nation position to India on the discussion t qualified. Since WTOs Charter requires wholly(prenominal) signatory to grant MFN status to some otherwise WTO members, in that respect arent m whatever ifs and exactlys to ponder.What reall(a)y is open for debate is whether we regard to sw stand the pill now, on our terms, or later when it might be forced cut our throats on somebody elses terms (India cool it hasnt taken the violation of this basic principle to WTO). No librate which stance we chose, one thing is certain this is the deal which defines the future run-in of Pakistan. And this is the dea l which might be our chance of actually becoming what we set about the effectiveness to become Pakistan. Introduction Pakistan and India stupefy been under the lime-light ever since the sectionalisation of the sub-continent.During the 1960s, Pakistan was labeled the Asiatic tiger while India the Basket Case. immediately however, the roles have been reversed. Through-out this period, the Indo-Pak switch over kept showing a varied impulsion to the negative side as shown by the figure below The quite a little of condescension has remained low generally. MFN works towards the liberalization of grapple which not exclusively would give a forward momentum to the integration of some(prenominal) countries scotchally, but would also enhance their image on the international platform.Cheaper exist of production, re-sentencing of skilled labor, education influx and the interest of the US and European sparing into this division would help give the once coveted status of southw estward Asia, back to the forces who originated it. Hence, a carefully reconciled MFN status should be grant to India in order to achieve the long-term prosperity of our country. The Economic billet After going through a large array of hooey debating this issue, two schools of thoughts generally emerge the protagonists, who support the idea of non-discriminatory trade amongst both countries.And the antagonists, who believe such(prenominal) a measure, would lone(prenominal) harm the sparing by letting free-flow of cheaper Indian goods into the Pakistani market and wholesome, narrow our options down on the Kashmir issue. The former debates, that by doing so not only do we get access to a potential market which is 8 to 9 seasons greater than ours, but it also gives us a skilful foundation of mutual dependence to minimize the security concerns across the border.India is swooping rooks and pawns run into the economic chess board towards becoming the third biggest parsimoniousn ess of the world, before it leads us up to a stalemate, this situation could be put to avail for both countries. After all, India outhousenot keep prospering in a prolong manner if it neighbored by a nation terrorized by policy-making and economic destabilization. So it would be an opportune time for Pakistan to bask in Indias glory. Practically speaking, this is the only focusing we could work towards a productive political debate for both the countries especially since the environmental strain after Mumbai attacks of 2008.After all, a long-standing peace arrangement can only nurture, if it contains within the deeply internal 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 positive impact upon the Pakistani consumer since they gain access to imported Indian goods at a lower price. We also have Taiwan, Hong Kong and even china who are on our MFN list and have bombarded us with fierce challenger in the past.Yet if our industries did not cave in to them and withheld own-selves past wherefore guardianship India? Besides, if the Pakistani market demands a particular good from India, MFN status or not, it would be smuggled cross border anyway so why not legalize it to perk our own interests. Take the example of the Indian Cinema, years and years of culture seeped through the media towards us, while the Wagha Border remained bolted shut. The only issue here is, the Pakistani tax-payer is paying far more than it unremarkably would have due(p) to the added layers of woo of go-between trade via Dubai.Conversely, this news has worn-out a mixed reaction from all the quarters of the strain community. both(prenominal), same the auto-parts, pharmaceuticals and consumer goods industries, face hard-hitting competition. They fear that India is yielding better quality goods at a lower cost o f production due to the economies of scale. On the other hand, industries kindred textile, entertainment and agriculture are in favor of granting the Most Favored Nation status to India.These industries argue that trade estimated trade of close to $13 billion with India is being carried out illegally via cross-border smuggling and face-to-face baggage. Also, indirect trade of an approximate worth of aroung $3-4 billion via third parties same UAE, Afghanistan, and Bangladesh is costing us a higher mark-up since the intermediary adds up their cost as vigorous. So it is better to legitimize this ongoing process and guide some probable gain out of this situation. In support of this argument, I quote the former Finance Minister of Pakistan and Vice President of the cosmos Bank, Shahid Javed Burki what economics told us is that when trade between a huge and junior-grade 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 overmuch as feared. publish in The Express Tribune, April 3rd, 2012. Free-trade spurs competitiveness which would encourage our local anesthetic industries to raise their standards and induce quality goods. It has never really hurt any country and all the benefits from recent experience in the European Union, Asian etc, are there for everyone to see.It would in fact take a page from the book of joke Locke by helping us attain a common groundwork of mutual-coexistence and economic interdependence to rely upon. The Regional military position southeasterly eastside Asia by abroad-spectrum consensus is the least integrated of regions economically due to the disparity and animus between Pakistan and India. Regional cooperation is must to attract heavy investment in todays globalised world. Diminutive and splintered markets do not attract endowment fund by substantial investors.The European Union may be attempt to save the euro but one of Europes most real successes is the creation of the frontier-free single market where goods, services and people can spread untrammeled by border restrictions. Similarly, Association of South East Asian Markets (ASEAN) is working towards building a common market for the whole region by equaling the European Unions lead. It is high time India and Pakistan set aside their differences (or at least take small go towards resolving them) for the overall welfare of the whole region.If we create an economic axis of rotation like the sorts of EU or Middle-East, it would ensure a better dicker position vis-a-vis other countries. Within the protective walls of regional economies, both countries would achieve specialization in various sub-sectors of the industry. Moreover, the streng soing of bilateral trade would provide a mutual cushion against financial or contrast market shocks. With these two countries forging into one economi c power, all of South Asia could become a better place monetarily.Another aspect of the MFN status would be to increase the connectivity with central Asia. If Indian goods are permitted to transit through Pakistan, then the whole region will benefit. For illustration, the Indian state of Punjab is several 1000 kilometers away from the seaports, but the farmers there and in the nearby states would be able to send their agricultural products to Central Asia if these are allowed freely through Pakistan. very(prenominal) 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 complete the instruction execution of the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline, as a new environment of trust and cooperation prevails. sluice more significantly, natural gas via pipeline will provide the Indian and energy deprived Pakistani industry with a massive ascension in sec tors ranging from petrochemicals to fertilizers electric power production will increase dramatically and a myriad of new commercial uses will be supported. In egest Pakistan could profit from the easy transit fee that it would receive as a royalty and it would only be assertable if MFN status is rendered toIndia. Social Perspective Trade is one social mobilizer which would give back benefits for both countries as well as their people. Talking about Pakistan singularly, 61. 3% of the people (according to the HDI reports) in Pakistan extend below the poverty line. With a 15. 4% unemployment rate, Pakistan should not forego any opportunity that provides job opportunities to its masses. Poverty is but a challenge that can be overcome by pursuing sustained pro-poor policies. One such policy is the granting of MFN status to India and lifting the trade barriers across border.India is a huge market and would provide a smaller country like Pakistan with access to a greater market and inc rease the demand for their product. This in turn would nose the output and employment levels in both countries. Secondly, Since India shares a border with us, the encumbrance cost and ease of access would increase the flow of a respective(a) product base at a lower cost, saving our countrys foreign exchange substantially. Pakistan could have entree to quality products in sectors like IT, electronics, transport 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 evaluate to contain the next Silicon Valley of the century considering its growth in the IT sector. Pakistan could benefit immensely from the inflow of this technology while India could gain wages by the progress Pakistan has made in its agriculture and industry.Both countries could complement all(prenominal) others needs and strengths and hence prove beneficial to their people. The cultural Perspective With the advent of the prospect of MFN policy, both countries have started aiming towards more engaging business conditions hence easier visa-processing procedures have been bought on the discussion table since November 14, 2011. This would repair the static tourism industry between both countries. Both have many historical and religious places significant to the other.This would not only generate additional foreign exchange revenue, it would also help increase the people-to-people inter-group communication 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 gel when theyre keep abroad, out of the influence of their respectively acrid medias. Delegations of trade bodies, academics, artists, sportsmen, social scientists and media personnel office could be exchanged.This would invoke the once unbreakable cultural bond between both nations considering how much value we place upon common games like play and hockey. Threats and Concerns Although the benefits of granting the inevitable MFN status to India are tremendous, every step Pakistan takes should be keep an eye on and well-thought of. There is no harm in protecting ones own-self against any potential threats that might occur due to any sharp move we make, after all there are years of enmity that we need to overcome before taking huge steps.Firstly, WTO provisions allow members to impose safeguards constricting imports (for temporary periods) should such imports unfairly or naughtily injure domestic producers. Pakistan should rightfully use this clause in campaign 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 second issue that should be considered is that India, despite its liberalization 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 valuable while the trade deficit tilts highly towards Pakistan. We should bring this issue on the WTO summits and appeal to India to either 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 prime examples of apprehension at granting 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 authorised plan. Concessions should be granted to concern ed parties for instance, the automobile industry should be guarantee that auto-parts would be imported instead of wholly assembled cars. Unbridled, unmanaged and uncontrolled liberalization of trade would lead to chaos in any economy huge or small. Or policies could be formulated 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? policy-making differences between India and Pakistan aside, there is no harm in trading with all(prenominal) other. Our leaders must take into consideration 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 c ountries, has strong interest in the maintenance and strengthening of the bilateral rules-based trading system represented by the WTO. The current situation in South Asia indicates that there are large unexploited 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) Dawn Newspaper and Articles. &8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8 212&8212&8212 1 . http//www. ishtiaqahmad. com/item_display. aspx? isting_id=725&038listing_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 mark-up 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. html