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Why no MFN to India

Leading Pakistan dailies say that the nation's trade ties with India remain hostage to diplomacy over Kashmir.
None | By Meenakshi Iyer, New Delhi
UPDATED ON MAR 30, 2006 12:06 PM IST

That India has registered a trade surplus of about $260 million in its trade with Pakistan, is a good news.

That Pakistan has decided to extend the South Asian Free Trade Agreement (SAFTA) to India from July 1, 2006, is also a good news.

But despite all the goodies, the nuclear-armed neighbour refused to grant the Most Favoured Nation (MFN) status to India.

As Pakistan's leading daily Daily Times puts it: "While a host of governments, led by the US, are flocking to India to build stronger ties with an economy that may eventually rival China, Pakistan's business ties with India remain hostage to diplomacy over Kashmir".

Political pundits will agree that better trade between the South Asian neighbours shall need parallel progress in resolving political disputes.

"The grant of MFN status to India should be contingent upon settlement of contentious issues with Pakistan," says The Nation corroborating their stance.

"It is tirade one moment, trade the next...When India is negotiating with Pakistan, matters can take a turn for the worse any moment even in presence of West-inspired models as the South Asian Free Trade Agreement," The News International says.

India has granted Pakistan the status of Most Favoured Nation. But Islamabad has not reciprocated so far.

It says that India must first remove non-tariff barriers apart from, of course, making a progress on peace bid.

"If trade is the basis of good relations and global economics are to be abided by, mutual trade has to be liberated from various restrictions that are in place right now. For instance, India has a high tariff in place for goods from Pakistan to the disadvantage of traders here," The News International says.

Even while the Indo-Pak trade talks, which began on March 27 were on, Pakistan's Foreign Ministry spokesperson made it amply clear that they will not do a rethink on granting MFN status until tariff and non-tariff barriers were removed.

That this rhetoric from the Pakistani media follows an olive branch offered by Prime Minister Manmohan Singh to Pakistan -- called the friendship treaty -- after President Musharraf's comment on "no initiative on India's part" must have again surprised the South Asian hawks.

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