Pakistan to move to Negative List approach in trade with India by Feb 2012

"The consultation process on devising this Negative List is almost complete. A small Negative List shall be finalised and ratified by February, 2012," the two countries said in a joint statement after the 6th Round of Talks on Commercial and Economic Co-operation between the Commerce Secretaries of India and Pakistan, held here over the past two days under the dialogue process which started in 2004.

 

The Pakistan delegation was led by Commerce Secretary Zafar Mahmood and the Indian delegation by Commerce Secretar Rahul Khullar.

 

 

The statement said that, thereafter, all items other than those on the Negative List shall be freely exportable from India to Pakistan.  

 

In the second stage, the Negative List shall be phased out.  The timing for this phasing out will be announced in February 2012 at the time the List is notified and it is expected that the phasing out will be completed before the end of 2012, the statement said.

 

The statement said that, in terms of the clear mandate given by the political leadership, both sides agreed to move towards enhancing the preferential trading arrangements under the SAFTA process. 

 

"As agreed earlier, bilateral trade can be significantly expanded by extending tariff concessions on products of commercial interest.  Both sides designated the Joint Secretaries in their respective Ministries of Commerce as Chief Negotiators for working on how to improve preferential trading arrangements under SAFTA," it said.

 

Both sides reviewed the progress made in developing physical infrastructure for trade through the Attari-Wagah land route. They agreed that the Joint Technical Group overseeing the work would meet at the end of November 2011 and there would be follow-up monthly meetings in December 2011 and January 2012.

It was also agreed that all infrastructure construction would be completed and fully operational no later than the end of February 2012 to coincide with the announcement of the Negative List. The new trading regime will thus be applicable to all trade through the land route after the infrastructure at Attari-Wagah is commissioned.

The statement said the first meeting of the Joint Group of Experts to examine feasibility of trade of electricity was held on 20th October 2011 at New Delhi.

Central Electricity Authority and Power Grid Corporation of India limited/Power System Operation Corporation Ltd have been designated as the nodal technical agencies from the Indian side.

They are interacting with National Transmission and Dispatch Company Ltd of Pakistan to work out the optimal technical solutions for grid connectivity between both countries.

A broad understanding has been reached on possible grid connectivity between Amritsar-Lahore to enable trade of up to 500 MW of power. The second meeting of the Experts is scheduled to be held in Islamabad in the first week of December, 2011. It is expected that the Group of Experts will reach a final understanding on grid connectivity at this meeting.

Regarding trade in petroleum products, it was agreed that the Joint Group would hold its first meeting before January 2012.

At the talks, the Pakistan side furnished a specific list of non-tariff barriers, as perceived by their business community, for sectors such as textiles, leather, cement, agricultural produce and surgical instruments. It was agreed that these would be comprehensively examined on the Indian side and interactions would be arranged between the concerned Regulators and Pakistan’s business community to discuss and find solutions for all issues raised.

A comprehensive special session was held during this round of talks on matters of concern to Pakistan side. Detailed responses were provided by concerned officers on the Indian side.

The two sides agreed that the Joint Working Group (JWG) would continue interaction to address any clearly identified sector-specific barriers to trade.

The Joint Secretaries of the respective Commerce Ministries would convene focused meetings on these issues, as necessary.

A delegation comprising officers from various regulatory bodies would visit Lahore and Karachi in the first quarter of 2012 to provide necessary outreach so that businesspersons in Pakistan can be better informed about India’s trade regulations, standards and labeling/ marking requirements.

Both sides agreed to initiate the process of a limited mutual recognition agreement (MRA) as a formal mechanism to address the issues of standards and conformity assessment.

It was agreed that there was a need to institute a mechanism for redressing grievances arising from clearance of trade consignments at land, sea and airports.

The meeting mandated the Customs Liaison Border Committe (CLBC) to undertake a comprehensive overview of the requirements to ensure expeditious clearance of goods, including harmonization of customs procedures and to make recommendations to the JWG on Economic and Commercial cooperation.

The Pakistan side handed over a draft of the Customs Cooperation Agreement. Both sides agreed that best efforts would be made to finalise the Agreement by 31st January, 2012.

Regarding Bt cotton seed imports from India, it was noted that Government of Pakistan has constituted a committee to examine this issue. The first step may be permitting limited import solely for the purpose of field trials in Pakistan.

The statement said that both sides realized that there is a potential for cooperation in Information Technology. However, the lack of information regarding capacity of Pakistani IT companies, difficulty in availability of visa for technical staff and absence of banking facilities has hindered cooperation in IT between the two countries. It was agreed that NASSCOM in coordination with Pakistan Software Export Development Board would facilitate a road show for Pakistani IT companies at Bangalore, Hyderabad and other Indian IT Hubs in February, 2012.

Both sides agreed to encourage greater interaction amongst the business entities. The meeting noted that the apex chambers of commerce and industry on both sides had formed a Joint India-Pakistan Chamber at the apex level (FICCI and FPCCI).

It was agreed to give a greater thrust to this B-to-B interaction of trade delegations. It was necessary to expand outreach and information dissemination activities to bridge information gaps relating to bilateral trading environment and economic opportunities, the meeting felt.

The Indian side noted the Pakistan side’s request for mounting a Trade Delegation comprising representatives of private sector who are responsible for procurement of goods for departmental stores, large retail shopping chains and whole-sale distributors.

Both sides agreed that the present visa regime for businesspersons was a significant barrier to the rapid expansion of trade. It was noted that the Interior Ministry of Pakistan and India’s Ministry of Home Affairs had reached a broad understanding to put in place reciprocal arrangements which shall substantially liberalise the visa provisions for business persons.

Discussions were held on how there would be further improvements on the understanding already reached. It was agreed that best efforts would be made by the respective Commerce Secretaries to push for further liberalisation of the business visa arrangements. However, with or without enhanced provisions, both sides would work with their respective authorities to ensure that the liberalised visa provisions already agreed to are put in place before the end of December, 2011.

The issue of promotion of bilateral investment was discussed and both sides agreed to continue efforts to remove impediments to such investments.