The Hindu : Economics must play dominant role in Indo-Pak. ties: Sinha

Online edition of India's National Newspaper
Tuesday, Jul 08, 2003

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Economics must play dominant role in Indo-Pak. ties: Sinha

By Amit Baruah

The External Affairs Minister, Yashwant Sinha, with (from left) Ilyas Ahmed Bilour, president of the India-Pakistan Chamber of Commerce and Industry, A.C. Muthiah, president, Federation of Indian Chambers of Commerce and Industry (FICCI), and Aziz Ahmad Khan, Pakistan High Commissioner-designate, at an India-Pakistan trade meeting in New Delhi on Monday. — Photo: V.V. Krishnan

NEW DELHI July 7. Economics should play a dominant role in India-Pakistan bilateral interaction so that the two countries could meet the challenge of living together as good neighbours, the External Affairs Minister, Yashwant Sinha, said today. Addressing 100 business leaders from Pakistan at the third meeting of the India-Pakistan Chambers of Commerce and Industry (IPCCI), Mr. Sinha said that chambers of commerce of the two countries could play a "critical role'' in ensuring the primacy of economic relations. He reiterated his proposal for a "South Asian Union'' to further trade relations in the region and said India was prepared to enter into discussions on the issue "from tomorrow''.

Speaking at the meeting, the Pakistan High Commissioner-designate, Aziz Ahmed Khan, said that "addressing outstanding political issues'' on the basis of "sovereign equality and mutual benefit'' would promote trade ties between the two countries and in the rest of South Asia. ``Trade and economic cooperation flourish in an atmosphere of peace, amity and cooperation... low intra-regional trade in South Asia can only be attributed to the persistence of suspicion-prone and conflict-relations between the two major countries of the region — India and Pakistan.''

Mr. Khan expressed concern at what he termed the "one-sided'' export growth strategies. "Ultimate trade restrictive policies not only impeded growth of trade but also adversely affect all partners in the region. For example, although India has extended the MFN (most favoured nation) status to Pakistan, throughout the last decade we have suffered an adverse balance of trade vis-à-vis India.'' Pakistan, Mr. Khan said in his first public speech after arriving in India, felt that mega-economic projects like the Turkmenistan-Afghanistan-Pakistan and the Iran-Pakistan-India gas pipeline projects would help in "promoting trust and regional economic cooperation'' between New Delhi and Islamabad.

Mr. Sinha said the intention was not to wish away the difference that existed in South Asia. Referring to both the South Asia Preferential Trading Arrangement (SAPTA) and the proposed South Asian Free Trade Area (SAFTA), he said minimal progress had been made on these fronts. ``After eight years and four rounds of SAPTA negotiations, intra-SAARC (South Asian Association for Regional Cooperation) trade forms only four per cent of the total trade of South Asia. The number of products on which preferential tariffs have been exchanged with Pakistan, is in particular, minimal. Back in 1997, SAARC had decided at the summit-level to have a free trade area by 2002. However, till the beginning of 2002, only one meeting had taken place and efforts continue to be made to delay this process. We are now in the second half of 2003, and not a single meeting has taken place this year on SAFTA despite the Kathmandu summit mandate for a speedy conclusion of the talks to finalise the framework treaty.''

Mr. Sinha tried to put at rest apprehension that larger economies will inevitably swamp smaller neighbouring countries. "For example, out of the $1.8 billion worth of trade with China in 2002, Pakistan's exports are quite substantial and to the tune of $750 million. There is no need to harbour any special fears about India.''

Senator Illyas Ahmed Bilour, new IPCCI chief, said that SAARC visa-holders had been restricted to specific cities for travel purposes when they crossed the border at Wagah. He also claimed that giving the MFN status to India was "not that important'' an issue. This could be extended to India by Pakistan at any time, but the two countries needed to begin trading. South Asia was the only region that had failed to form a regional trading bloc in the current era of "globalisation'' due to "our bitterness'', the Senator said.

The Federation of Indian Chambers of Commerce and Industry (FICCI) president, A.C. Muthiah, called on the Pakistani business community to impress on its Government to allow free trade with India. He too called for free travel between the two countries. Not only should businesspersons get visas-on-demand, they should be free from "police reporting'' and not restricted to a single port of entry or exit. He suggested the resumption of air links at the earliest.

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