Trade ties will reinforce ongoing talks: India, Pak MP | business | Hindustan Times
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Trade ties will reinforce ongoing talks: India, Pak MP

The strengthening of trade relations between India and Pakistan will reinforce the ongoing dialogue between the two sides and make progress truly irreversible, a grouping of parliamentarians of the two countries said today.

business Updated: Jan 18, 2012 22:16 IST

The strengthening of trade relations between India and Pakistan will reinforce the ongoing dialogue between the two sides and make progress truly irreversible, a grouping of parliamentarians of the two countries said on Wednesday.

Following the third round of their dialogue, the parliamentarians said in a joint statement that boosting commercial ties must be viewed in the wider context of trade as the engine of growth and "its welfare-enhancing multiplier effects" that can improve overall life and confer benefits to both countries.

"Fostering improved trade links normally based on optimising comparative factor advantages and endowments will reinforce the ongoing dialogue between the two countries and make the progress truly irreversible in multiple ways uninterrupted by any distracting aberrations," the statement said.

While taking note of plans by India and Pakistan to increase bilateral trade from two billion dollars to six billion dollars in three years, the parliamentarians said expert opinion suggested that the true potential for trade was over 14 billion dollars and "indeed sky was the limit given an enabling policy and regulatory framework".

"These targets may not be so daunting considering that the current informal trade through multiple routes and modalities had already generated a substantial exchange of goods and services and bringing them in the formal channel would be mutually beneficial to both countries," the statement said.

The transition from informal arrangements to a more formal structure needs incentives and encouragement through policy initiatives, they said.

The decision of the two commerce ministers to implement a MoU between India's Trade Promotion Organisation and the Trade Development Authority of Pakistan should be linked to evolving an actionable roadmap to achieve targets set by the two sides within a time-frame.

The parliamentarians made 15 recommendations for increasing trade between the two countries, including ratification of initiatives to move from the current positive list approach to a small negative list regime by February and phasing out the negative list by the end of this year.

They recommended the process of seeking preferential trade agreements within the framework of SAFTA should be completed on a priority basis.

Appropriate measures should be put in place for minimising sector-specific barriers and to foster a dialogue between regulatory bodies of both sides, they said.

Non-tariff barriers deterred the realisation of the trade potential of both sides and priority action should be taken on tangible issues while "recognising the non-discriminatory nature of these measures," the statement said.

"While trade constituted an engine of growth, encouraging investments by both countries would deepen economic relations. The early conclusion of an Investment Protection Treaty would enhance the confidence among the business community," it said.

The parliamentarians suggested that trade links could not be strengthened without requisite financial and banking arrangements and highlighted the need to open bank branches in each other's countries.

They also called for an "enabling and friendly" visa regime. The lawmakers further recommended the strengthening and creating of infrastructure for improving trade links, such as the Khokhrapar-Munabao and Bahawalpur-Rajasthan links and ferry services between Karachi and Gwadar in Pakistan and Mumbai in India.