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NDMA to replace MFN for India
* Cabinet all set to approve bilateral trade agreement
By Sajid Chaudhry
ISLAMABAD: A leap forward in liberalization of trade between Pakistan and India, Federal Cabinet is expected to approve Non-Discriminatory Market Access (NDMA) to India in its upcoming meeting, official sources in the Ministry of Commerce informed Daily Times.
Both sides have reached a broader understanding to move forward on the issue of liberalizing bilateral trade and overcome associated obstacles, however, formal signing of the NDMA would provide legal infrastructure for the purpose and regulation of trade.
The idea of signing NDMA was conceived when the term Most-Favoured Nation (MFN) status became controversial especially in Pakistan. The NDMA would provide India almost all the benefits as need to be allowed under MFN as per World Trade Organization’s framework.
Federal Cabinet, officials said, would however be informed on the concerns of the farmers community who have expressed grave concerns over the NDMA to India, as they believe that bureaucracy have not protected their rights while agreeing to such Trade Liberalization Programme.
Earlier, farmers community was given a firm assurance, but on ground, they have witnessed flood of Indian agriculture products in recent years leaving Pakistani farmers to bear losses.
A summary will be moved to the cabinet shortly in this regards, and it is expected that both countries will notify changes by March 31, according to sources. Abolishing of negative list containing few hundred items maintained under bilateral Trade Liberalization Programme (TLP) agreed between the two countries would exactly mean allowing Non-Discriminatory Market Access (NDMA) to India.
However, the sources explained that Pakistan would continue to maintain negative list notified under South Asia Free Trade Area (SAFTA) agreement, signed between SAARC trading block comprising South Asian nations, containing around to protect its infant industries and other sensitive areas of economy.
Although both the countries have agreed to bring down the existing negative list maintained under SAFTA to just 100 from existing few hundred items, but the reluctance from other SAARC member countries is not creating enabling environment for both Pakistan and India to complete this process quickly.
According to sources, Pakistan will abolish the Negative List of 1,209 items which cannot be imported from India under the NDMA agreement. Pakistan, in 2012, took a giant step by replacing the Positive List of 1,946 items, which could be imported from India, with the Negative List.
As a first step towards NDMA, Pakistan will allow India to import all goods through the Wagah-Attari border. The border would also remain open 24 hours a day. Earlier, approval of the Economic Coordination Committee of the Cabinet was required for import of any product from India via land route, later, ECC allowed Ministry of Commerce to decide this issue itself for quick decision making purposes. Allowing all importable products from India via land route was the major demand of the local trade and industry as it was felt as quite economical, especially the import of machinery, raw materials and semi-finished products. The NDMA would also provide frame work for sifting existing labour intensive bilateral trade to modern containerized movement of goods across the border. Allowing more rail and road links for trade purposes is the major demand of the business community especially in Sindh and any progress in this regard would really mean actual trade openness between the two countries.
Sources further explained that once the process of NDMA is completed, authorities might consider speeding up investment liberalization process as India has already allowed Pakistani investors to Invest in India. There was no restriction in Pakistan for the Indian investors, however, authorities still believe that a broad legal frame is required for investment liberalization, the sources said.
Courtesy www.dailytimes.com.pk