SEMINAR ON ‘PROS & CONS OF TRADE RELATIONS WITH INDIA’

Salim Ahmed

Thursday, July 09, 2015 - Lahore—Pakistan must weigh the risks and benefits of opening trade with India. This was upshot of the speeches delivered at a seminar on “The Pros and Cons of Trade Relations with India”, jointly organized by the Institute for Policy Reforms and the Lahore Chamber of Commerce & Industry here at the LCCI. Chairman the Institute for Policy Reforms (IPR) and former Federal Commerce Minister Humayun Akhtar Khan, the LCCI President Ijaz A. Mumtaz, Adviser IPR Dr. Manzoor Ahmad and Convener LCCI Standing Committee on Pak-India Trade Aftab Ahmad Vohra were prominent among the others.

Humayun Akhter Khan said that normal trade with India has been under discussion for many years. Rigorous assessment of cost and benefits is the only way to take a decision and to move this matter to closure, one way, or another. He said that this approach would also bring all stakeholders on common ground. He said that the fits and starts nature of the relationship finds reflection in conflicting trends.

He said that on the one hand, Pakistan does not have normal trade relations with India. On the other hand, Pakistan and India are members of the South Asian FreeTrade Area (SAFTA). This apparent incongruity reflects the reality of our bilateralrelations. Decision on trade with India, therefore, must harmonize among security, economic, and trade interests. Recently, IPR examined overall developments in South and Central Asia and recognized that there are risks to our security. He advised policy makers to consider an incremental approach and distinguish among normal trade, and opening of land and transit routes. He said that this IPR-LCCI event would examine economic and trade benefits and risks. IPR expected that such discussion would help policymakers take a decision.

The LCCI President Ijaz A. Mumtaz said that trade normalization between India and Pakistan is not as simple as it seems to be. He said that there are a number of factors that determine these bilateral trade relations. “We are in favor of it but it has to be done very carefully. We do not fear to compete with India in a free trade regime but before opening borders, we must have a well thought out plan which is to be finalized in consultation with private sector” LCCI President said.

Ijaz A. Mumtaz said that the Lahore Chamber has especially partnered with Institute for Policy Reforms with a view to hold a debate to see the possibilities of increasing direct trade between two countries. He said that indirect trade is taking place between Pakistan and India via third destination which not only adds to shipment cost but also stretches lead time. He said that we have to find ways to mitigate the adverse effects of tariff and non tariff barriers. Dr. Manzoor spoke largely in support of open trade. He listed the specific risks and benefits of trade with India. He said that developing economies that are globally integrated experience sustained growth.