Pakistan , India can dominate world trade under WTO

PAKISTAN and India can dominate world trade if both the countries can have a long-term trade policy. "One of the major reasons of low volume of trade" between the two countries, "is lack of confidence and unclear policies", says Mr. Azher Saeed Butt, Co President, India Pakistan Chamber of Commerce & Industry. In an interview by Amitabha Sen the IPCCI Co President lamented that the Most Favoured Nation Status that India accorded on Pakistan is meaningless as "as no privileges have been given to Pakistan under MFN".

While observing that the Kashmir is the determining factor mot only in making the bilateral relationship stronger but in shaping up SAARC as a very powerful regional block in South Asia as well. "I am strongly of the view that once the Kashmir issue is resolved the entire SAARC region will witness considerable growth in intra-regional cooperation", said Mr. Butt.

Here we present Mr. Azher Saeed Butt, Co President, IPCCI

AS: Both Pakistan and India being “natural partners for trade” as you had rightly pointed out at a FICCI-PHDCCI organized interactive session last year, in reality the trade volume between the two neighbouring countries stands at an extremely low level. Could you suggest some confidence building measures that would ensure full exploitation of the bilateral trade potential of these two countries?

ASB: The trade volume between Pakistan and India is not to the desirable extent despite the fact that both the countries have great potential and they can compliment each other in various sectors. One of the major reasons of low volume of trade is lack of confidence and unclear policies. Both the countries should announce long term trade policy to further strengthen the trade and economic relations and legalize the unofficial trade.  

AS: At the same meeting you said that IPCCI would ensure “economic engagements become win-win situation”. What is IPCCI strategy in that direction?  

ASB: There is no doubt that the economic engagements between the two countries will create win-win situation for both of them. The greater economic activities between the two countries are the need of hour which will ultimately create a conducive and friendly atmosphere for conducting business.  

AS: Could you please tell us the sectors that offer vast potential of Indo-Pak cooperation?

ASB: Since the trade between the two countries is confined to limited sectors it is difficult to identify the vast potential areas. However Pakistan's textile has an edge while India has advantage in industrial sector because of cheap labour and mass production. I would suggest that the business community of the two countries should have the liberty to make joint ventures and explore the potential of third country.

AS: It is not only trade alone, strong political will as well has to be there to ensure a stronger South Asia and in that respect India and Pakistan have major roles to play. What would be your expectation from India as a big brother? What is your expectation from the Pakistan government as well?  

ASB: Pakistan and India are major members of SAARC. This regional bloc when compared with the other blocs has not achieved the desire result. The main reason is political issues between Pakistan and India particularly with reference to Kashmir issue. There can not be any development in any sector without resolving the Kashmir issue. I expect India and Pakistan to make serious efforts in solving the Kashmir issue without any delay.

AS: Some key political issues like Kashmir are identified as major roadblocks towards greater trade flow between the countries. Do you think those are the only issues that stand in the way to boost up the bilateral trade or there could be other reasons as well? 

ASB: I am strongly of the view that once the Kashmir issue is resolved the entire SAARC region will witness considerable growth in intra-regional cooperation. In SAARC region India has geographical advantage bordering with all SAARC Countries while Pakistan is only bordering with India. If both countries resolve Kashmir issue not only the intra-regional trade will improve but also gain a major share in the world trade.  

AS: Under SAFTA both the countries are supposed to trade freely, subject to certain restrictions. On the other hand there are some constraints that are limiting free trade between these two countries. How to strike a balance between the two?

ASB: After implementation of SAFTA the member countries of SAARC will allow free trade amongst themselves. However every member of SAARC will protect its industry. I am of the view that before implementation of SAFTA all disputes including Kashmir issue should be resolved to get fruitful result from SAFTA. If intra-regional cooperation gets going we can join hand to establish SAARC Bank, SAARC Airline, SAARC Shipping line. We have been talking about SAFTA but if we see the ground reality Pakistani and Indian nationals are still facing visa problems. I strongly support the opening of Visa Office in major cities of both the countries and visa should not be restricted to one or cities.  

AS: India had long back accorded MFN status on Pakistan but not received similar response. How would you like to at this issue? 

ASB: India has given MFN status to Pakistan it is useless as no privileges have been given to Pakistan under MFN.

AS: WTO Hong Kong outcome, as you are aware, could not do much to solve major issues except that developing nations have come much closer and united. Against this backdrop, what role you would be expecting from India and how Pakistan can complement India’s role in achieving the ultimate objective of protecting the trade and commerce and agriculture of developing nations in an era of globalization? 

ASB: Pakistan and India are not only the important members of SAARC but they can jointly dominate the world trade under WTO. India and Pakistan are both agricultural countries and their economic are dependent on agriculture. Both countries should device policies to protect the agriculture sector under WTO.  

AS: Closely linked with WTO, is the issue of globalization. Some time back Hon’ble President Musharraf said: “We need to correct the economic asymmetry that exists around the world; the fruits of globalization must be distributed in favor of the have-nots”.  How to ensure such evenness? Do you think WTO can play an effective role in this respect knowing the fact that rich and developed nations’ block can yield much wider and stronger influence on the outcome of WTO?   

ASB: Globalization under WTO will certainly bring challenges to the developing countries. To overcome these challenges I am of the opinion the members of the regional blocs should make combined efforts to give protection to their regions' LDC members.

27th March 2006