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| Rift between Delhi and Islamabad persits | | Pak not to give India 'most favoured nation' status | | BL KAK
NEW DELHI, APR 2: A sensational official signal from Islamabad: No SAFTA (South Asia Free Trade Agreement) and MFN (most favoured nation) status for India. Thr reason: Pakistan would suffer once India got SAFTA and MFN status.
If New Delhi had expected Islamabad to grant MFN status or other trade-related concessions to India under the SAFTA during the 14th SAARC summt in New Delhi on April 3-4, Pakistan was reported to have decided to act differently. Another significant signal from Islamabad: Although trade talks would be central to the summit, the dream of a free-trade area would continue to remain hostage to the rivalry between Pakistan and India for the foreseeable future, as Pakistan had made it clear that trade depended on the resolution of outstanding issues.
But as a face saver, Pakistan, according to this signal, will never say at the SAARC forum that progress on SAFMA should be linked to progress on the core issues, including Kashmir. Pakistan had been discreetly exploiting various technical issues to withhold the MFN status for India. Islamabad does not want anyone to draw comparison with Pakistan's signing of a free-trade agreement with China.
In fact, an official message from Islamabad: No comparison with the agreement signed with China, as it does not make things that can compel Pakistan culturally to buy. The Indians can use airwaves to change consumer patterns. Secondly, China is not a strategic competitor.
Pakistan's officialdom is reported to be of the view that India’s non-tariff barriers, hidden levies and surcharges had been helping Pakistan confront its assertions. India has one of the most secretive non-tariff barriers, and many countries, including the US, have already sued it at the WTO, according to Pakistan officialdom.
SAFTA came into force on July 1, 2005, and aims to establish free-trade areas by 2015. So far, tariffs have been reduced twice among the SAARC members, and a third cut in rates will take place on July 1. Where other countries apply across-the-board tariff cuts, Pakistan only reduces taxes on a list of 1,074 items from India.
Islamabad's reported standpoint: India’s efforts to bring Pakistan into a trading arrangement to blunt political issues would certainly fail, but Pakistan had apparently no objections to easing travel restrictions. An important agenda item of SAARC would be multi-model transportation across the region, which would facilitate road, air and rail links, and Pakistan insists that it has shown willingness to hold talks on it.
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