Once opportunities arise

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At a recent seminar in Kathmandu on trade in South Asia, the issue of regional trade cooperation figured prominently. The meeting resolved to focus on supply-side issues, which include a rationalisation of standards and implementation of an effective competition policy and law. It is no secret that the cause of regional trade is mortgaged to Indo-Pak relations. Alas, recent incidents of two-way non-tariff trade barriers, though unconnected, only appear to stall the story. One was Pakistan’s blocking of sugar exports from India, while India blocked cement imports from Pakistan. And we wish to take the volume of trade from $1.76 billion per annum to $10 billion by 2010. Both those barriers were erected in the name of standards, but clearly, there existed vested interests behind them in the form of local producer cartels: sugar in Pakistan and cement in India. And neither country has an effective competition law.

Now, India and Pakistan are signatories to the WTO’s SPS and TBT agreements, and if these consignments are not in conformity with the stated standards, then officials have a right to hold them up. But if the same sugar is good for Indians and cement for Pakistanis, why the brouhaha?

On the other hand, both India and Pakistan argue at the WTO that there should be mutual recognition of standards and/or equivalence. If they cannot do so at the regional level, what right do they have to do so at the WTO in Geneva? Whenever either party opens its mouth in Geneva at the negotiating table, someone points this out.

Thus, the way ahead is to start identifying minimum standards and safeguards which should have mutual recognition, taking into account existing standards in the respective countries, and possibly accept them as regional standards for trade within the region. Second, they should also adopt good competition laws to foster regional cooperation under the Safta framework. Once this is done, not only Pakistan and India, but the whole developing world can demand the same at Geneva.