Pakistan Grants India ‘Most Favored Nation’ Trade Status

Pakistan announced it will seek to normalize trade relations with his neighbor and historic rival India, after having granted Most Favored Nation (MFN) status to New Delhi.

The government cabinet in Islamabad unanimously approved the action.

Under MFN, nations typically provide each other with low tariffs and high quotas on imports. Pakistan, whose economy has become stagnant, will now be able to export more goods to India, which is blossoming.

India gave Pakistan MFN status in 1996 and has been waiting all this time for reciprocation.

The World Bank forecasts that annual trade between India and Pakistan – currently valued at about $1 billion – could increase by ninefold, upon the relaxation of trade barriers.

This will bring economic benefits to us and this decision has been taken in the national interest, said Pakistani Information Minister Firdous Ashiq Awan.

Associated Press reported, however, that Awan did not specify when MFN status would become effective, but added that the nation’s powerful military endorsed the measure.

However, some hardliners in Pakistan were opposed to easing trade with India.

Hafiz Hussain Ahmed of the Jamiat Ulema Islam party told AP: “Any move to enhance trade ties with India without solving the issue of Kashmir is an exercise in futility. Why is the government granting MFN status to a country that has destabilized Pakistan?”

In response to such criticism Awan insisted that: ”Pakistan would continue to extend moral and diplomatic support to the Kashmiri people. The new trade agreement would not affect the cause of Kashmir.”

Indeed, even some government ministers raised some objections to the trade status agreement, specifically over the Kashmir dispute.

The [Pakistani] prime minister [Syed Yusuf Raza Gilani] reviewed all the objections and took the cabinet into confidence that it will not hurt our national security, Awan noted.

According to India’s English language newspaper, The Hindu, New Delhi’s Commerce and Industry Minister Anand Sharma said the new trade relation with Pakistan would improve ties between the two nuclear giants.

“We deeply appreciate this positive gesture that Pakistan has taken…when bilateral economic engagement improves, it brings prosperity and growth to both the partners,” he said.

“It opens up new pathways of alleviating our economic engagement to a much higher level. It will be influencing definitely in positive manner…we need to sustain this in the coming months.”