Full MFN status only after "negative list" is phased out
The two countries are currently moving from a "positive list" regime to a "negative list" regime but even the "negative list" goes against the non-discriminatory trade that MFN status demands, Fahim told a news conference yesterday.
The "positive list" agreed on by the two sides contains over 1,900 items that can be traded between the two sides.
The "negative list" currently being finalised will include the items that cannot be traded, significantly expanding the scope for bilateral trade.
"We are working on the negative list. The items in the list will not be allowed for trade with India," Fahim said.
Even trade with India through a negative list was a violation of the World Trade Organisation rules and until all items are phased out from the negative list, no one can say that full MFN-status has been granted to India, he added.
Fahim's statement cleared the confusion that has persisted about Pakistan's plans to give India MFN-status since Information Minister Firdous Ashiq Awan announced after a cabinet meeting last October that the status had been granted to India.
Asked if trade liberalisation with India was linked to political issues, Fahim said progress in trade negotiations will be in line with developments in other areas of the overall dialogue process launched in 2004.
He said the cabinet had authorised the Commerce Ministry to liberalise trade with India and the regime will initially be switched over from a positive list to a negative list.
"The Commerce Ministry is working with all stakeholders to finalise the negative list by next month," he said.
Commerce Secretary Zafar Mahmood, who too was present at the news conference, said the negative list will be submitted to the cabinet next month for approval.
The cabinet will decide the phase-wise withdrawals of items from the list and the timeline, he said.
Mehmood further said that the complete withdrawal of items from the negative list is expected by December this year.
"This is not the final timeline," he clarified.
He noted that India's investment regime was "discriminatory" towards Pakistani investors.
"A Pakistani can't even buy property in India," he said. Asked if the government is protecting elite industries at the cost of consumers, Fahim said he believed Pakistan's pharmaceutical and automobile firms should compete with Indian products.
However, protection will be provided to these sectors, he said.
Mehmood said though there were no Pakistan-specific non-tariff barriers in India, Islamabad will sign three different agreements with New Delhi to remove hurdles that may come in the way of free trade between the two countries.
These agreements are expected to be signed during Indian Commerce Minister Anand Sharma's visit to Pakistan on February 12.
"We are exchanging drafts of these agreements," he said. The delegation that will accompany Sharma will visit Karachi, Lahore and Islamabad and meet the business community to exchange views regarding bilateral trade.
India will also hold a three-day trade exhibition in Lahore from February 11.
"We have requested the Prime Minister to allow the display of those items which are not in the positive list as a special case," Mehmood said.