LIBERALISATION of trade and investment between Pakistan and India is not a new or abstract initiative, but the process is not easy. Nor should one be naive to think that there would be a sudden upsurge in trade activities.

Businessmen have always asserted that trade and investment should never remain hostage to contentious issues, or to contentious issues emanating from officialdom in New Delhi and Islamabad.

It is really difficult to make the hawks comprehend the critical mass that liberalised trade and inflow of investment can usher in relative peace and sanity. While the mantra that unless contentious issues are addressed, there should be no meaningful shift in the trade and investment regime, does not help.

During one cabinet meeting, some ministers, representing rural constituencies, raised concerns about where the MFN would lead to. At the same time, powerful lobbies from the automotive and pharmaceutical sectors were pleading for a revisit of the impending decision to granting MFN status to India. A concerted protest was initiated by pseudo-religious elements, mostly those who are dependent upon funding and facilities by unscrupulous traders active in informal cross-border trade.

The shared commonalities corporate-supported prime ministers in New Delhi and Islamabad have reinforced the hopes of Pakistani businessmen, who see a new paradigm in bilateral relations

Thus, the Sharif government decided to rechristen the MFN nomenclature by terming it as Non-Discriminatory Market Access (NDMA). As Shakespeare said, “What’s in a name? That which we call a rose by any other name would smell as sweet.” But in spite of this pragmatic decision, assurances from the commerce minister at various forums and meetings, and the avowed commitment of the Nawaz Sharif government to grant the NDMA on a priority basis, the final decision is still in limbo.

The apparent reason floated is that the country’s establishment has deep reservations, as it considers it advisable to frame trade and investment decisions within the parameters of the composite dialogue. This is still a moot point, but not entirely maintainable. If there were such profound objections from the powers that be, the whole exercise would have been nipped in the bud. However, due to political exigencies, Nawaz Sharif has to walk on a thin line, and the NDMA or other such issues are consigned to the back porch.

Prime Minister Narendra Modi’s very bold decision to invite Nawaz Sharif to his swearing-in ceremony sent a very encouraging message. However, the damper came when the Indian Foreign Secretary and the Pakistani Foreign Advisor came out with conflicting statements about the 50-minute talks between Modi and Sharif. This further gave impetus to those forces within Pakistan who are inimical towards granting any concessions to India, or even liberalising the visa regime.

Trade and investment is possible in a peaceful and an environment of trust. Commerce gets waylaid in an omnipresent hostile situation. The road towards liberalisation of trade and investment, especially in the context of the two large Saarc nations, is very torturous and strewn with boulders. Ironically, there is a side lane that is more or less well paved for trade movement. This is the avenue of informal trade.

The business leadership of India and Pakistan are on the same page when it comes to formalising informal trade and liberalising investment. The politicians and the bureaucracy do listen to them and grasp the imperative need to widen the trade windows. Unfortunately, business leaders are unable to convince or motivate those elements who think differently.

Thus, there is a modicum of distress within the business communities of both the countries, more so in Pakistan. This is the fear of being questioned about patriotism, of being responsible for a deluge of Indian goods in the domestic market, and of not getting equal treatment for their goods or services across the border due to the discriminatory usage of non-tariff trade barriers that many in Islamabad claim are Pakistan-specific.

The shared commonalities of a corporate-supported prime minister in New Delhi and an industrialist heading the government in Islamabad have reinforced the hopes of Pakistani businessmen, who see a new paradigm in bilateral relations. While they do have concerns that contentious issues would affect trade in a see-saw mode, there is always the desire to be optimistic, and to sincerely lobby for removal of all cobwebs that are hampering trade and investment.

Pakistani industrialists and businessmen see joint ventures; outsourcing; technology transfers; Indian Special Economic Zones in Pakistan near the border; opening up of Munabao-Khokhrapar route for trade and people-to-people movement; easing visa regime; mutual recognition of standards; harmonisation of customs regulations and procedures; Saarc regional cumulation; alternate dispute resolution mechanism; cross-border banking facilities; and more importantly, reduction in NTBs, as leading to more trade and investment. This would be a designated game-changer, and should, in the long run, bring about regional economic integration. A receptive Indian market for Pakistani products would be the ideal confidence-building measure.

The writer is a former president of the Karachi Chamber of Commerce and Industry.

Twitter: MajydAziz

Published in Dawn, Economic & Business, June 16th, 2014