MFN: let parliament call the final shots! Perspective
Brig (retd) Farooq Hameed


A flurry of contradictory statements and interpretations emanating from various government quarters added to the confusion surrounding the cabinet meeting’s decision on the MFN issue. Information Minister Dr Firdous Ashiq Awan had clearly announced the cabinet’s unanimous decision to grant India the MFN status to improve trade relations between the two countries.

But rising domestic opposition from certain business and political quarters forced the prime minister to adopt a defensive stance later on, as if he was backtracking on the MFN matter. He clarified that the Cabinet had only ‘empowered’ the Commerce Ministry to negotiate the trade modalities with India and the government would go ahead ‘subject’ to a favourable situation in national interest.

While it is undoubtedly the political leadership’s prerogative to decide critical foreign/economic policy issues, yet given the unique history of Indo-Pak relations, the input/advice of the defence establishment in particular is an accepted norm. Were the security set-ups (Army/ISI) taken on board before the Cabinet’s MFN decision? The information minister had stated that all stakeholders were taken into confidence, including our military and defence institutions.

If this were true, then why the need for that recently held ‘emergent’ meeting between DG ISI and military high ups with Foreign Minister Khar at the Foreign Office? Was the security establishment concerned about the motives behind the MFN decision? Were vital national security interests being ignored or in danger of being compromised?

The prevailing confusion warranted the foreign minister’s intervention. She refuted the impression that Pakistan had backtracked from its MFN position. While she reportedly admitted that the military was a major stakeholder in the context of Indo-Pak relations, she did state that the Army had been consulted before the cabinet’s decision. The foreign minister went to the extent to clarify that it was wrong to depict the Army as something different from the government.

I would agree with the foreign minister’s remark that our Army supports the democratic government’s efforts to further the peace process and normalize trade relations with India. It was a positive gesture from General Kayani, when an Indian Army helicopter that recently strayed into Pakistan side in Siachin, was not shot down but allowed to return within twenty four hours.

But like all Pakistanis, the military, too, would want that major Pak-India disputes that are impediments to South Asia’s peace, including Kashmir, water, Siachin and Sir Creek are not put on the back burner.

It is understandable that normalization of bilateral trade ties with India would create a conducive environment for dispute resolution. The ongoing composite dialogue with India, therefore, needs to be speeded up in parallel to make it meaningful and result oriented. FM Hina Khar views Indian support for Pakistan’s non-permanent UNSC membership and withdrawal of Indian opposition to Pakistani goods’ access to European markets as tangible outcomes of the Pak-India dialogue process.

Certain confidence building measures from the Indian side would reflect their commitment to creating an environment of mutual trust. After so many negotiation rounds in last few years, why cannot Pakistan and India come to an agreement on easily resolvable issues like Sir Creek and for that matter even Siachin where both armies remain deployed at high altitudes in extreme weather conditions?

A breakthrough in Pak-India relations is achievable, if on the MFN, the Indians reciprocate by ceasing support for the Baloch insurgency and give up their backing of the Tehreek-e Taliban from Afghanistan.

The MFN decision should not be perceived to be done in haste or under any external pressure. Granted that it is almost fifteen years since Pakistan was accorded MFN status by India, yet all round effects of recognizing India as an MFN on Pakistan’s economy need to be examined in depth and shared with the people.

The US brokered Afghanistan-Pakistan Transit Trade Agreement (APTTA) signed under the watchful eyes of US Secretary of State Hillary Clinton on July 19 in Islamabad last year had raised concerns about foreign influences on our decision making. This extraordinary concession paved the way for transportation of Afghan goods and those from central Asian republics to India via the Wagha border crossing.

If the US sponsored TAPI (Turkmenistan-Afghanistan-Pakistan-India) gas pipeline project is vital for Pakistan’s energy needs, it is even critical for energy-starved India to support its booming economy. Since the TAPI would transit through Pakistan, it is another significant gift/concession to India, securing their long awaited energy corridor from resource rich central Asia.

Are APTTA, TAPI and MFN part of the US’ geo strategic/economic grand designs for central/south Asia? If Pakistan were to fulfil India’s long cherished dream of a return trade corridor through Wagah and Torkham to Afghanistan/central Asian states, why not seek a quid pro quo on Kashmir and water issues?

Despite having MFN status, Pakistani goods have not enjoyed Indian market access. Whereas Indian exports to Pakistan amounted to almost 1.6 billion US dollars in 2009-10, Pakistani exports to India were only around 276 million US dollars.

The interests of our automotive sector in particular that employs 1.4 million workers and constitutes 15% of Pakistan’s large-scale industry need to be protected. India produced 2.5 million cars in 2010-11, compared to Pakistan’s 0.12 million automobiles. Hence the much bigger Indian auto industry should not be allowed to squeeze our relatively smaller auto industrial base.

It is therefore the PPP led government’s responsibility to extract favourable terms for Pakistani businessmen, traders and manufacturers in negotiations with Indian counterparts in terms of removal of non-tariff and other discriminatory trade barriers and fair market access to promote healthy and competitive bilateral trade in which the balance is evenly tipped.

What is required on the MFN, is a ‘whole of government’ approach with all concerned ministries including Defence, on the same page. More important is to build consensus amongst political parties, chambers of commerce, manufacturers and traders. Let our parliament then call the final shots!