The Politics of MFN

Zafar hopes that Pakistan keeps its promise of granting MFN to India as the region is desperate for peace and tranquility

(Mr. Zafar Choudhary, 35, was born in Rehan village of Rajouri district. He received his post graduate degree in Journalism from the University of Jammu. Mr. Choudhary is a Journalist and Policy Analyst based at Jammu (Jammu and Kashmir, India). He is founder Editor of Epilogue Magazine and Honorary Director of Indus Research Foundation (IRF), a think tank, research and resource centre on issues of historical and contemporary importance within and around the region of Jammu and Kashmir. A non-political, non-governmental Trust, IRF promotes the entire region of undivided Jammu and Kashmir as a bridge between India and Pakistan and essential link between Central and South Asia. Zafar is regularly engaged in tracks of peace processes on Kashmir and he writes a popular weekly column known as 'This, That & The Other' appearing every Friday in Srinagar based English daily 'Rising Kashmir'.)

Don’t Let the ‘Favour’ Go

With India-Pakistan relations rooted in history of drama and theatrics, the Islamabad tantrum over the much delayed Most Favoured Nation (MFN) status to India is hardly surprising. Two extreme developments within 24 hours are depressing and disappointing but the fact that Pakistan reached close to looking at India as a neighbour and partner in progress offers much convincing hope.

On Wednesday, Islamabad surprised the political, diplomatic and business community in India by announcing that the federal cabinet has granted India the MFN status, something awaited since 1996. The announcement evinced gratefully positive response from India with Commerce Minister Anand Sharma saying “we deeply appreciate this positive gesture that Pakistan has taken”. Sharma and his Pakistan counterpart Makhdoom Mohammad Ameen Faheem have been piloting a new wave of economic relations between both countries since early this year. The Pakistan Commerce Ministry statement quoting Cabinet decision was placed on the government’s Press Information Department’s website only to be removed Thursday morning when the Foreign Office in Islamabad burst the euphoric bubble. The Foreign Office spokesperson said that the Cabinet has approved a Commerce Ministry proposal of normalisation of trade ties with India. On being insisted by the reporters at her Press Conference the spokesperson said that normalisation of ties of would culminate in MFN status –a deepening ambiguity. The Ministers and Secretaries in the Commerce Ministry of both countries have been hammering out obstacles for long and this year alone it appeared twice happening sooner than later.

With Prime Ministers Manmohan Singh and Syed Yusuf Raza Gillani slated to meet in Maldives on November 11-12 during the SAARC summit, it was widely expected that Pakistan take step forward toward further normalisation of ties. MFN status could have been an indicator of such intentions. Even as the Pakistan Peoples’ Party government is getting reconciliatory and pragmatic towards bilateral ties with India despite the Kashmir bone in their neck, the opposition parties and other radical groups don’t want any bilateral progress while Kashmir being on the burner. The newly emerging India-Pakistan spirit of accommodation that is seen anchored in pragmatism is being scuttled by Pakistani opposition parties and the radical groups wanting their country to look towards India in context of Kashmir only. Knee jerk on long pending MFN status to India is the latest case in point. Opposition wants government to link it up with Kashmir. Well, progress on Kashmir is important but a level of comfort between India and Pakistan is much more important for achieving the desired progress. Good business relations could be a password to friendly political and diplomatic ties. Pakistan, like any other country, can’t live in isolation and India certainly wants a healthy neighbour around. Progress on bilateral ties like MFN status could be seen as reflection of the courage, will and ability of both countries and sorting out their issues at their own and the same time progressing into the future with shared benefits for each other.

Recent Background

The back-foot after Wednesday’s announcement of Cabinet decision on MFN status disappoints in more ways than one given the stupendous progress made in past few months. In a bilateral meeting held in Islamabad ending April this year, the Commerce Secretaries of India and Pakistan, Rahul Khullar and Zafar Mehmood agreed to take on board each other's concerns regarding the trade regimes in either country and explore new avenues for bilateral trade while side-stepping the ‘so-called' ticklish issues that dominate mainstream discourse. A joint statement issued at the end of their meeting set a timeline for addressing the identified doables including Pakistan granting the MFN status to India and moving to a negative list approach in tariff lines, and New Delhi amenable to addressing Islamabad's concerns regarding Non-Tariff Barriers that restrict the flow of Pakistani goods into India. Following months saw much progress in both countries achieving a level of political and diplomatic comfort. Visit of Foreign Minister Hinna Rabbani Khari to New Delhi in July further cemented the ties.

After a meeting of Commerce Ministers in New Delhi on September 28, Pakistan agreed to operationalise MFN treatment to India. A joint statement issued at the conclusion of talks between India’s commerce minister Anand Sharma and his Pakistani counterpart Makhdoom Muhammad Ameen Faheem gave enough indications to this effect. The joint statement said the two ministers mandated their commerce secretaries to “pursue with vigour” the task of fully normalising bilateral trade relations. They agreed that their countries would cooperate for a high ambition of preferential trade relations under the framework of South Asian Free Trade Agreement (SAFTA). This was interpreted by in India as amounting to Pakistan agreeing to operationalise MFN status and trade experts saw it as a major breakthrough in bilateral economic relations. Faheem had said on September 28 “we have agreed to actively pursue MFN to India”. Things are moving forward according to plan. We are looking forward to achieve the target". The joint statement further said “they (the two countries) agreed that all mutual obligations contracted under SAFTA would be implemented with full sincerety.” The major mutual obligation contracted under SAFTA is to provide MFN status by all member countries to each other to facilitate free trade in the South Asian region. Pakistan is the only country which has not granted MFN status so far to India. All other countries have granted MFN status to each other in the region.

Kashmir: Hope, not obstacle

However, as the day came closer to operationalise the MFN status, the Pakistani opposition parties started raising stumbling blocks. The main opposition party PML (N), a bipartisan parliamentary panel on Kashmir and pro-establishment political outfits opposed the decision in unison as they felt it might hamper stand on Kashmir. Foreign Minister Hina Rabbani Khar informed the National Assembly a fortnight ago that the government had, in principle, decided to give India MFN status and a formal announcement was likely any time. The loudest opposition to the plan comes from the Pakistan Muslim League-Nawaz (PML-N) which said it did not want war with India but had ‘serious concerns’ on giving New Delhi the MFN, a privilege through which one country gives trade concessions to the other. A parliament’s special committee on Kashmir, Jamiat Ulema-e-Islam- Fazl (JUI-F) and Jamaat-e-Islami (JI) also joined the chorus against what is seen as a big leap forward to normalise relations between the two nuclear-armed rivals. This attitude of the opposition parties is too disappointing and regressive. However, the hope of India and Pakistan moving forward as friends and partners in progress can be traced in the statement of Information Minister Firdous Ashiq Awan, who, while announcing the Cabinet ‘decision’, said, “the two parts of Kashmir are already trading across the Line of Control (LoC), bus services were operational, and that the Kashmiri leadership had been engaged on the issue (of MFN)”. The trade across the Line of Control in Kashmir, though on life support system since birth, should be guidebook for India-Pakistan trade ties. The opposition parties must relent allowing Islamabad to move forward with Delhi.