Govt urged to weigh risks, benefits for India trade

LAHORE: Pakistan must weigh all risks and benefits and bring various stakeholders on a common ground before opening trade with India, speakers said on Tuesday.
At a seminar themed “The pros and cons of trade relations with India,” former Federal Commerce Minister Humayun Akhtar Khan said normal trade with India has been under discussion for many years and rigorous assessment of cost and benefits is the only way to take a decision and to move this matter to closure.
On one hand, Pakistan does not have normal trade relations with India and on the other hand, Pakistan and India are members of the South Asian Free Trade Area (SAFTA). This apparent incongruity reflects the reality of our bilateral relations.
The LCCI President Ijaz A. Mumtaz said trade normalization between India and Pakistan is not as simple as it seems to be. There are a number of factors that determine these bilateral trade relations.
“We are in favour, but it has to be done very carefully. Before opening borders, we must have a well thought out plan which is to be finalized in consultation with private sector,” LCCI President said.
Dr. Manzoor spoke largely in support of open trade. He listed the specific risks and benefits of trade with India and said developing economies that are globally integrated experience sustained growth.
Over 60 percent of global trade takes place via the supply chain of MNCs, who make their buying decisions in all parts of the world. He said that Pakistan’s trade policy results in loss in prosperity.
Pakistan risks further growth loss if it is left out from recent moves towards South Asian integration. In his view, Pakistan must find ways to build on South Asia’s dynamism. “Past studies on Pakistan India trade overwhelmingly show significant economic benefits for our economy,” he said.
Possible synergies from linkages with Indian industry far exceed the risks to some of local industry. For example, Suzuki would not have closed its manufacturing of Alto vehicles in Pakistan, if it could access low cost Indian parts supply, Manzoor said.
The pharmaceutical companies could become major exporters if they were to find linkages with Indian companies. Fears of increase in trade deficit are also misplaced as mostly those Indian exports that are presently routed through UAE would divert to Pakistan only.
Aftab Vohra, Head of LCCI’s Pakistan India Trade Committee relied on extensive personal experience of trading on Pakistan’s land border with India. He said Pakistan businesses and consumers would benefit greatly by opening trade route. “It would help both exports from Pakistan and imports from India,” he said, adding that political differences must not impede trade interests.
The seminar was jointly organized by the Institute for Policy Reforms (IPR) and Lahore Chamber of Commerce & Industry (LCCI).