VOHRA TALKS ABOUT MFN
THE DECISION WOULD GO A LONG WAY IN BRINGING THE MUTUAL RELATIONS OF THE TWO COUNTRIES TO THE NEW HEIGHTS.
Nov 7 - 20, 2011
Mr. Aftab Ahmed Vohra is a Pakistani business figure based in Lahore, mostly engaged in the chemical industry. He started his business in early 1970s. He is the chairman of Vohra group of companies. He belongs to reputable family of Chinioti Sheikhs.
Mr. Vohra is the former vice-president of the Lahore chamber of commerce & industry (LCCI). In an interview, he has welcomed the federal cabinet decision to grant the status of most favored nation (MFN) to India and termed it a good omen for economic prosperity of south Asia. He said: "This decision would go a long way in bringing the mutual relations of the two countries to new heights."
According to him, Pakistan has already granted MFN status to 100 countries for boosting its trade and granting of MFN status to India would promote its regional trade as well. Both India and Pakistan were doing trade under general agreement on tariffs and trade (GATT) but after the world trade organization (WTO) replaced GATT, India granted MFN status to Pakistan. It was necessary to boost mutual trade in the larger interest of both the countries. After signing the formal agreement with India, non-tariff barriers would be dismantled to help boosting the mutual trade between Pakistan and India.
Mr. Vohra said the MFN decision would help increase trade between Pakistan and India especially after the removal of obstacles like non-tariff barriers and visa restrictions. He said the opening up of trade with neighboring India would reduce Pakistan's dependence on European and American markets and Pakistan can focus on emerging regional markets including China.
Answering a question, he said infrastructure needs to be created to facilitate trade between the two countries and the government needs to take the LCCI into confidence in this regard.
He was of the view that the decision would favor Pakistan more. "We will get a big market of over one billion while we are giving them a relatively smaller market of 180 million people," he said, adding: "Pakistan is blessed that it has two fastest growing economies of the world as its neighbors where the developed countries are coming to invest."
The business leader is of the view that Pakistan needs to make the most of this opportunity and tries to grab more market share in India as other countries of the world are doing. He said trade would only benefit both countries when both have equal tariff structures that do not favor any single country.
Mr. Vohra said: "Pakistan can import auto parts from India that we import from Japan and other Asian countries at present. In addition, we can also take help of Indian expertise in IT and technology. Pakistan should also make sure that we do not turn into a dumping ground of Indian goods. We need to develop our industry where we have edge over India."
He said: "Pak rupee is half of Indian rupee against the US dollar, which gives an edge to Pakistani exporters to grab a large market share in the big Indian market. Instead of depending on our old markets like Europe and the United States, Pakistani exporters should look towards Asian economies especially India and China."
At the same time, Vohra said: "If both countries successfully remove all the irritants for trade, I think it will change much as far as trade is concerned." He further said: "I have no doubt that Pakistan can speedily increase its exports to India if our exporters get level playing field in tariff structures with India." Nevertheless, India is a big market; we can definitely take advantage of this reality.
He further said the decision to grant India MFN status would enable Pakistanis to export more goods to booming India at a time when Pakistan's own economy is in hot water.
It may be noted that the World Bank estimates that annual trade between India and Pakistan is around one billion dollar and could grow to as much as $9 billion if barriers are lifted. Much of the current trade is illicit -- products go through Dubai, where they are repackaged and smuggled into both countries, meaning higher prices and less tax revenue.
Statistics show that trade between the two countries was $1.4 billion in 2009-10. Of these, Indian exports to Pakistan stood at $1.2 billion, while Pakistan exports to India were a mere $268 million.