PAKISTAN has once again dithered over the grant of the `most favoured nation` status to India despite firm assurances by officials to do so during the February visit of Indian Commerce Minister Anand Sharma who brought with him a high-profile delegation of 100-plus businessmen, raising high hopes from his visit.

The reasons explained for the lacklustre event were not convincing enough to cool off the disappointment in the Indian camp.

Equally embarrassing was the decision of the federal cabinet to meet in Islamabad at a time when trade talks were in progress only to announce that MFN status issue and the Negative List needed some more time to be finalised because some stakeholders -the industries which are seeking protection against Indian imports were yet to be consulted and brought on board.

The Negative List, replacing the existing Positive List, is to be phased out in three instalments on a quarterly basis with quarters ending on June 30, September 30 and December 31 of 2012. This would automatically result in grant of the MFN status to India. The purpose of the negative list is to provide some time to the affected domestic industries to prepare themselves for competition with Indian goods.

Some reports say that Pakistan had agreed to extend MFN status to India if the latter withdraws its objections to the WTO waiver regarding the European Union humanitarian package for Pakistan`s 2010 flood victims that would allow 75 products duty-free entry into the EU for a period of two years. The reports have not been confirmed by the either side.

However, if it is true, Pakistan has not fulfilled the condition.

A former president of Lahore Chamber of Commerce and industry Mian Muzzafar says that none of these `key` industries (like automobiles, textiles) have been taken into confidence over the trade issue, either in the earlier decision of eliminating the negative list or in the new proposal of quarterly phasing it out. If December end is the cut-off date for complete elimination of the negative list, one wonders how can these industries become efficient in the next 10 months. They need at least three to five years for the purpose, he argued.

The FPCCI president is of the view that the government should not have put the negative list on the agenda of the cabinet meeting if it had no plan to approve it. Commerce Secretary Zafar Mahmood`s version was that comments on the proposed negative list had not yet been circulated among the ministries a requirement under the rules. Unless that is done, the negative list could not be approved by the cabinet. Besides, during the cabinet meeting, some ministries such as the interior ministry complained that the commerce ministry had not shared the draft summary with them before submitting it to the cabinet meeting.

What is amply clear is the fact that various explanations given for the delay, rather lethargy, prove that Pakistani side was not at all prepared for the February event. Promises made were many but no homework was done before inviting the Indians to make their vis-it reasonably result-oriented. In fact, the commerce secretary was too generous in his commitments. He is on record for having stated while in India that the Pakistan government would formally inform the WTO about Pakistan`s decision to accord the MFN status to India before February.

The `go-slow` policy of Islamabad has, as is evident, upset the timelines of liberalising trade. It is not clear which lobbies, other than the affected industries, were intent on playing a spoiler`s role. In the political realm, there is of course no dearth of anti-India zealots who would try their best to sabotage any good outcome of the current efforts of the two countries to develop close trade relations. For them, any improvement in relations with India is anathema.

More dismaying for the Indians was the nonavailability of the negative list which could at least help their businessmen plan a strategy for pursuing trade in selective sectors.

Pakistan`s commerce ministry has prepared a list of 636 items which has to be approved by the cabinet. Confederation of Indian Industry (CII) president B. Muthuraman while voicing his country`s business community`s displeasure over the absence of progress in trade talks, observed: `however, this is just one part, the more important thing is to have a change in mindset, which is happening.

Although Indian commerce minister Anand Sharma was equally unhappy but he kept a pleasant poise. He told a local daily in an interview: `We had only one desire: that the thinking of the two nations changes such that trade relations between the two countries improve.

And that was achieved on this trip.` Sharma did not like to say that Pakistan has backtracked on its commitment. In fact, he made it a point to `appreciate` the efforts of his host.

`Our people are very impressed by the hospitality of the Pakistani people and the government,` he said. Although these were mere courteous remarks, he tried to give an impression that he has ignored Pakistan`s inappropriate attitude.

Sharma pointed out that India and China had border issues and other related `political tensions` but their trade was booming. `Why this cannot happen in the case of India and Pakistan?` he asked. To some extent, India and Pakistan have already begun to adopt this attitude and, as one can observe, the old policy of giving primacy to the solution of Kashmir dispute before undertaking any joint economic or cultural project is not being observed in the present case. Sharma`s current visit and Amin Fahim`s visit to India in November bear a testimony to this growing trend of separating politics from economics.

The discussions that have thus far taken place in Pakistan have not produced any breakthrough. But most of the politicians and civil servants on both sides of the border, currently engaged in handling the trade issue, appear committed to making the process work, and to keep it going. The only positive outcome of the February meeting has been the signing by the two countries of three pacts a customs cooperation agreement, a mutual recognition agreement and a redressal of trade grievances agreement. These agreements were signed on the insistence of Pakistan`s business community that had complained about non-tariff barriers, particularly those regarding quality control and customs procedures.