Karachi: Pakistan Association of Auto Parts & Accessories Manufacturers PAAPAM Chairman, Munir K Bana, has said that the industrialists and agriculturists of Pakistan are being wrongly accused of creating hurdles by lobbying against MFN status to India.
He said that they are only asking that the cabinet’s decision of February 28, 2012 should be implemented in letter and spirit, whereby the cabinet had approved phasing out of Negative List subject to further progress regarding provision of level playing field for Pakistan’s exports. This decision of the cabinet also directed that further negotiations should be carried out with India in this regard.
Bana further pointed out that, removal of Non tariff barriers NTB’s by India is the only impediment for removal of negative list and that would be the only way to achieve a level playing field required by the cabinet. He added that an impression is being created that everything is proceeding well from the Indian side while Pakistani Govt is being forced to withdraw because of lobbying from industry representatives.
Usman Malik, Vice Chairman PAAPAM said ‘No doubt, trade with India will help the economies of both the countries, provided all unjust barriers are removed by India’. Pakistan’s automotive industry is a vocal proponent of free trade with all countries including India, he added, yet there is a need that the economic planners should take the nation into confidence on all matters pertaining to trade with India.
‘We should not misguide the nation by stating that Pakistan is bound under the WTO regime to grant most favoured nation status to India. This is not true, as article XXIV of the General Agreement on Tariffs and Trade GATT that has been incorporated in WTO regime clearly grants special status to India and Pakistan,’ Munir Bana stated. He added that its paragraph number 11 states that the article is not binding on the two countries and therefore, in the presence of this article, the Government of Pakistan should not grant MFN to India in haste because this would benefit India only through having free access to the Pakistani market.
Usman Malik asked the government to ponder on the fact why Pakistan has failed to make any inroads in Indian market in spite of having MFN status from India for more than a decade. ‘The reason is that the Indian trade regime is rigidly anti-import and their policy makers have cleverly erected barriers against imports from other countries, especially Pakistan,’ he added.
Bana said import of many items in India is allowed on a specific tariff which is low, subject to a minimum tariff. In actuality, the tariff is very high for low value products. The importer thus has to pay whichever tariff in final analysis is higher. For example, fabric in India can be imported at 10 percent duty or Rs 150, whichever is higher. ‘This way an Italian fabric costing $15 per yard would pay Rs 150 equivalent to $3 duty while Pakistani fabric valued $2 would also pay Rs 150, which in other words comes to 150 percent duty,’ he reasoned.
He further said that a fair solution in this regard would be to allow Indian imports against similar parameters of tariff and nontariff conditions that are present in Indian import regime. ‘A free trade anywhere in the world benefits the trading partners. That is why economists plead for free trade. However, there is no free trade in Indian import regime due to unclear tariff regime and numerous nontariff barriers,’ he added.