Date:08/08/2003 URL: http://www.thehindu.com/2003/08/08/stories/2003080803481200.htm

National

`MFN status will serve as indicator of Pak. intentions'

By Our Diplomatic Correspondent

NEW DELHI AUG. 7. The External Affairs Minister, Yashwant Sinha, said today that Pakistan extending the Most-Favoured Nation (MFN) status to India would indicate whether Islamabad wanted to have "normal trade and economic relations" with New Delhi or not.

Replying to a written question in the Rajya Sabha, Mr. Sinha said Pakistan had not yet extended MFN status to India citing extraneous security, political and economic reasons. "In accordance with the Shimla Agreement of 1972, a Protocol on Resumption of Trade was signed by India and Pakistan on January 23, 1975, which provided that trade would be on MFN basis as provided for in the General Agreement on Trade and Tariffs," he said.

"India has accorded MFN status to Pakistan in conformity with its general approach. Contrary to its obligations, including under the WTO, Pakistan has not yet extended MFN treatment to India... The Government has drawn attention to Pakistan's intention to have normal trade and economic relations if it is seen to be committed to improving bilateral and regional economic cooperation,' Mr. Sinha said.

In response to another question, Mr. Sinha said Pakistan had formally suggested on July 24 that the two countries meet to "discuss modalities" to ensure the resumption of rail services. "India would move ahead in a step-by-step manner building on the success achieved and the confidence generated,'' he said. "Both countries have appointed High Commissioners and the Delhi-Lahore bus service has been resumed from July 11, 2003. Pakistan has indicated its willingness to host technical-level discussions for resumption of civil aviation (links). Both sides have released prisoners. There have also been important exchanges in the context of business, cultural and people-to-people contacts,'' Mr. Sinha said.