Pak committed to normalise trade ties with India: IMF

Last Updated: Fri, Mar 28, 2014 15:25 hrs

Washington: Pakistan is committed to normalise trade ties with India in a period of three years as part of its economic reform agenda, a top IMF official said today.

"As part of the reform of the trade regime, in the previous letters of intent, the Pakistani authorities have said that they will seek as part of this three year programme (with IMF) normalisation of trade relationship with India," said Jeffrey Franks, IMF Mission Chief for Pakistan, Middle East and Central Asia Department.

Normalisation of trade relations, he emphasised, does not mean just granting the Most Favoured Nation status to India.

"It is question of opening of border crossing, eliminating non-tariff barriers. It's a comprehensive approach that the two countries would have to take to lower both tariff and non-tariff barriers. Gains could certainly be substantial for both countries," he said.

His remarks came as the International Monetary Fund released its annual report in which it has revised Pakistan's GDP growth forecast upward slightly to 3.1 per cent from 2.8.

In a conference call with reporters, Franks said recent studies have shown that there would be significant specific economic gains for the two countries due to normalisation of trade relationship between India and Pakistan.

Pakistan plans to grant India Non-Discriminatory Market Access (NDMA) status, a nomenclature chosen by it to avoid political ramifications of giving India the MFN status.

"In every study the gains are substantial for both countries," he said.

Responding to questions, Frank said Pakistan has not given any time frame to this reform.

The original letter of intent said this in the context of trade reforms that it would work towards normalisation of trade ties with India, he said.

"I do not think there has been any development since then over the last few months," he said.

Earlier in his assessment of the security situation in Pakistan, in particular extremism, Frank said the countries around the world that have substantial security problems; there are clearly significant economic effect that could be suffered by those countries.

"We do consider that the worsening of the security situation in Pakistan is potentially, relatively a potentially risk factor going forward," he said.

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