In Pakistan, the army headquarters will decide whether India should be granted MFN status or not.
At the release of the findings of the NAF/NWC Pakistan Study Group’s report, “Pakistan and the United States: At a Strategic Crossroads,” Mohsin S. Khan, Senior Fellow at Peterson Institute for International Economics spoke about one the recommendations made in the Report: Promote Regional Trade. An extract from the recommendation:
Most significantly, improved trade with India represents a natural source of potential growth for Pakistan, and also a potential leverage point for easing tensions between the two states. Just as after World War II former enemies France and Germany created the coal and steel common market that spawned the European Union, the more India, Pakistan and other regional players collaborate along economic lines, troubling political issues will begin to be seen as nuisances in the way of an emerging regional prosperity. Populations gathered into a cycle of growing, interdependent prosperity will have even more intense motives to avoid violence and build effective governance. India retains high tariffs on Pakistani imports, Pakistan has not yet reciprocated Most-Favored Nation (MFN) status with India (although it has said the matter is under consideration), and little effort has been made to enhance the less than $2 billion in official and unofficial bilateral trade that goes on (as opposed to estimates of 10 times as much which could take place in a depoliticized environment). [Page 15]
Here are the tweets on Mohsin’s statement made at the release of the Report:
But the most intriguing was this statement:
For all the reports about Pakistan planning to grant Most Favoured Nation status to India that were making news recently, the reality is that it is the Generals at Rawalpindi who will decide whether India and Pakistan can trade freely or not. If this sounds absurd, it is so because it is absurd.
This has two direct lessons for policy-makers in India. One, at no point in time should they forget who the real masters in Pakistan are, especially when it comes to formulating policy towards India. Two, it bolsters the argument made by this blogger (see this post) that bilateral trade cannot dramatically alter the relationship between India and Pakistan unless the Pakistan military-jehadi complex is dismantled first.
Let us harbour no illusions. India’s path for seeking permanent peace with Pakistan has to begin with the dismantling of the Pakistani military-jehadi complex. Nothing less will suffice.