Pakistan- India economic relations
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Revision as of 09:46, 4 July 2017
This is a collection of articles archived for the excellence of their content. |
Most-Favoured-Nation (MFN) status
The Times of India
[ The Times of India]
India may drag Pak to WTO on MFN, dispute Sep 28 2016 : The Times of India
A meeting convened PM Modi explored the option of dragging Pakistan to the World Trade Organisation's (WTO) dispute resolution body for refusing to reciprocate for 20 years India's granting of the Most Favoured Nation status to Pakistan. But New Delhi might not consider withdrawal of Pakistan's status, government sources said. What is Most-Favoured-Nation (MFN) status?
Under the World Trade Organization (WTO) agreements, countries cannot normally discriminate among their trading partners. If a country grants another country a special favour (e.g. lower customs duty on imports) then it has to offer the same favour to all WTO members.
Each member treats all the other members equally as “most-favoured“ trading partners.
The benefits of MFN status is available only to WTO members.
However, countries can enter into preferential trade agreements and free trade agreements to grant access and favours over and above MFN.
India-Pakistan MFN India granted Pakistan MFN status in 1996, and Pa kistan is yet to reciprocate. Trade between the two countries never really normalized. Total annual official trade between the two countries was $2.5 billion in 2015-16, whereas annual unofficial trade is estimated to be nearly $15 billion. A section of Pakistan's industry feels Indian goods will swamp Pakistan if Islamabad grants MFN status to India. There have been talks of granting Non-Discriminatory Market Access (NDMA) to India, which experts believe is MFN in another name.
Can India withdraw MFN status to Pakistan? India can move WTO and request for withdrawal of MFN status to Pakistan, citing breach of security . Article 21(b) (III) of WTO rules says that “nothing in this agreement shall ... prevent any WTO member from taking any action it considers necessary for the protection of its...security interest taken in time of war or other emergency in international relations.“
What would happen if India withdraws MFN status?
Exports from India will be choked, hurting consumers in some sectors. Trade through the Attari Wagah border will be hurt. According to a Ficci survey , steel costs in Pakistan would go down by 55%, engineering goods by 26%, bicycles by 20% and pharmaceuticals by 35% if they are imported from India through direct trade channels. Fruits and vegetables would be cheaper by 40% and sugar by 30%. The survey had said that liberalized trade in agriculture would help generate 2.7 lakh jobs in India and 1.7 lakh in Pakistan.
See also
India- Pakistan economic relations
India- Pakistan: Cease-fire and its violations
India- Pakistan: Nuclear weapons testing
Nuclear arsenals: India, Pakistan
and many more articles, especially about the 1965 and 1971 wars, The Kargil war of 1999, 1947...
