To trade or not to trade | By Akbar Jan Marwat

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To trade or not to trade


THE importance of trade between neighbouring states or regional trade cannot be over empha sized.

Many neighbouring countries in Europe have been sworn enemies, having fought a number of bloody wars against each other.

But by gradually resuming trade, they have not only mutually benefited economically, but the strained relations between the former enemies have also improved because of their mutual economic interest.

In our part of the world, the mutual trade between India and Pakistan has been a very controversial subject.

On the one hand, the mutual benefit of trade between two neighbourly countries cannot be denied, but on the other hand, the three wars fought between the two countries and the perpetual denial of the right of self-determination to the Muslims of the disputed region of Jammu and Kashmir makes the trade issue very emotive.

After the government of BJP under the leadership of Modi was formed in India, Pak-Indian relation became even more strained, especially after India abrogated articles 370 and 35 A, thus withdrawing the special status of Jammu and Kashmir. We thus have two clear narratives about doing trade with India.

Business community plus many segments of liberal population are in favour of having bilateral trade with India, on the other hand, our conservative and religious segments including an overwhelming percentage of our population is against having any trade or cultural ties with India till the festering problem of occupied Kashmir is not resolved.

It would be instructive to examine the two alternative points of view and their implication.

Last month there was the all-important news that Pakistan would open limited trade with India.

It was indicated that Pakistan would import cotton and sugar from India to meet the increasing domestic requirement.

The news seemed to be a sequel to Gen Bajwa’s statement in a seminar that:’’ Pakistan and India should bury the past and move forward’’.

The important decision of opening trade with India was made by the ECC, but when the decision went to the Cabinet for final approval, it was vetoed apparently due to public pressure against resuming trade with India.

Now the import of these two commodities makes a lot of economic sense for Pakistan. For the last few years Pakistan has been getting low yields of cotton.

Pakistan therefore, has to import this important raw material from places as far as the United States and Brazil. This of course involves substantial transportation costs.

It is another matter, of which we cannot be proud, that an agricultural country like Pakistan is not producing enough cotton due to low quality seeds and various plant diseases.

Similarly sugar seems to be in short supply. There are many theories about this shortage. It appears the major sugar industry players were given subsidies on costly sugar to make it competitive in the international markets.

Thus, large quantities of sugar were exported, while local demand was still not met.

The ECC, as mentioned earlier, had indicated to import half a million tons of white sugar and about five million bales of cotton to meet local demand.

It must be noted that Pakistan’s consumption of cotton has increased during COVID, when the US had put a ban on importing textile goods from China. Pakistan has to an extent, made use of this opportunity to export textile goods to the US.

The business community in both countries were hopeful of a phased resumption of trade, after the announcement of Gen. Bajwa’s statement. The decision of the Pakistani Cabinet of not resuming trade till India removed the curbs on the people of India held Kashmir must have come as a damper.

Business leaders on both sides of the border reacted to proposed resumption and then the cancelling of the decision.

All India sugar trade Association (AISTA) Chairman Profil Vithalani said: “Resumption of bilateral trade would be a win-win situation for both the countries”.

He further added that India had ample stocks of sugar which could be exported to Pakistan via land routes.

Similarly, Raza Baqir, the Punjab Chapter, Secretary General of All Pakistan Textile Mills Association (APTMA) said that: “Importing Cotton from places like the US and Brazil was costlier and it also takes longer from the cotton to reach Pakistan”.

Thus, importing cotton from India for the time being would be a good option according to our leaders of the textile industry.

It might be revealing for our younger cohorts that Pakistan and India were at one time engaged in substantial mutual trade.

According to researchers in the period of 1948-49, Pakistan’s exports to India were 56% of all Pakistani exports, and 32% of its imports come from India.

Land routes were used by the two countries for bilateral trade during 1948-65 period. Apparently mutual trade between the two countries went pear-shaped after the 1965 war.

The counter narrative is that: till the intractable Kashmir issue is resolved, any kind of trade and cultural relations should not be kept with India, as it only distracts attention from the main bone of contention.

The narrative has tremendous traction amongst a substantial percentage of Pakistan’s population, hence the refusal of the Cabinet to give a nod to trade with India.

This narrative has further strengthened since BJP under Modi has come to Power in India.

BJP’s human treatment of Indian Muslims and its bellicose attitude towards Pakistan has further strengthened this point of view.

Instead of trying to resolve the status of Indian Kashmir according to the UN resolution, the BJP further aggravated the issue by abrogating articles 370 and 35 A, thus denying the special status of occupied Kashmir since partition.

The main arguments against resuming trade with India are basically political based on India’s hegemonic attitude towards Pakistan.

The only economic argument that I have heard against resuming trade with India is that: India’s large market will inundate the Pakistani market to the disadvantage of Pakistan’s traders and farmers.

The reason this narrative of not having to do anything with India got traction in large percentage of our population is due to the barbaric attitude of Modi’s regime with Muslim in India as well as its inimical attitude towards Pakistan.

In my humble opinion, a nuanced and rational approach should be taken toward trade with India.

There is little doubt that as long as BJP under Modi stays in power in India, Pak – Indian relations are not likely to improve.

But I still believe that some minimum trade with our neighbour which is mutually beneficial must be carried out. No unilateral favours, however, should be extended to India.

Lastly, I believe that to stop India from its nefarious designs, a far more effective process would be for Pakistan to expose India on all international fora.

Such efforts should be made by our diplomats, our special envoys including our Foreign minister and even the Prime Minister.

Such pro-active diplomacy would certainly be a more effective tool of building our case against India rather than just avoiding trade with them.

—The writer, KP’s former Health Minister, is based in Islamabad.