Mfn Status to India

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  • Topic: Most favoured nation, India, Economics
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MFN to India– The Pakistani Perspective
Research Paper

2012
Zoya Mohsin Awan BBA2K9(s)
4/24/2012

Hatred, enmity, war; a few of the many things we associate with our neighboring country India. 1965, 1975 and the Kargil War of 1999; with Kashmir already a bone of contention, Pakistan has skipped loops by merely bringing thought of granting Most Favored Nation Status to India on the discussion table. Since WTO’s Charter requires every signatory to grant MFN status to other WTO members, there aren’t many if’s and but’s to ponder. What really is open for debate is whether we want to swallow the pill now, on our terms, or later when it might be forced down our throats on somebody else’s terms (India still hasn’t taken the violation of this basic principle to WTO). No matter which stance we chose, one thing is certain; this is the deal which defines the future course of Pakistan. And this is the deal which might be our chance of actually becoming what we have the potential to become - ‘Pakistan’.

Introduction:
Pakistan and India have been under the lime-light ever since the partition of the sub-continent. During the 1960’s, Pakistan was labeled the ‘Asian tiger’ while India the ‘Basket Case’. Today however, the roles have been reversed. Through-out this period, the Indo-Pak trade kept showing a varied trend to the negative side as shown by the figure below:

The volume of trade has remained low generally. MFN works towards the liberalization of trade which not only would give a forward momentum to the integration of both countries economically, but would also enhance their image on the international platform. Cheaper cost of production, exchange of skilled labor, education influx and the interest of the US and European economy into this region would help give the once coveted status of South Asia, back to the forces who originated it. Hence, a carefully reconciled MFN status should be granted to India in order to achieve the long-term prosperity of our country.

The Economic Perspective:
After going through a large array of material debating this issue, two schools of thoughts generally emerge; the protagonists, who support the idea of non-discriminatory trade between both countries. And the antagonists, who believe such a measure, would only harm the economy by letting free-flow of cheaper Indian goods into the Pakistani market and well, narrow our options down on the Kashmir issue. The former debates, that by doing so not only do we get access to a potential market which is 8 to 9 times greater than ours, but it also gives us a dependable foundation of mutual dependence to minimize the security concerns across the border. India is swooping rooks and pawns off the economic chess board towards becoming the third biggest economy of the world, before it leads us up to a stalemate, this situation could be put to advantage for both countries. After all, India cannot keep prospering in a sustained manner if it neighbored by a nation terrorized by political and economic destabilization. So it would be an opportune time for Pakistan to bask in India’s glory. Practically speaking, this is the only way we could work towards a productive political debate for both the countries especially since the environmental strain after Mumbai attacks of 2008. After all, a long-standing peace arrangement can only nurture, if it contains within the deeply ingrained seed of mutual benefit.

On the other hand, the antagonists argument that this ‘free-trade’ would open the floodgates to cheaper Indian products which in turn could harm Pakistan’s economy majorly. However, this could be a positive impact upon the Pakistani consumer since they gain access to imported Indian goods at a lower price. We also have Taiwan, Hong Kong and even China who are on our MFN list and have bombarded us with fierce competition in the past. Yet if our industries did not cave in to them and withheld own-selves then why fear India? Besides, if...
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