WORLD Bank has claimed that there is potential of $35 billion trade between Pakistan and India on annual basis through opening up trade by removing all kinds of barriers. Briefing newsmen on Wednesday, its Director Macroeconomics, Trade and Investment said by reducing man-made trade barriers, trade within South Asia can grow roughly three times – from $23 billion to $67 billion. According to the official, the cost of trade is disproportionately high within South Asia compared with other regional trade blocs.
There can be no two opinions that regional trade or trade with neighbours has clear advantages both in terms of cost and prompt delivery besides its obvious role in promoting peace and cooperative environment. Experts point out that cultural overlap and consequent similarity of consumption patterns, the natural integration of industrial production due to likeness of demand and factor endowments, low delivery costs and short lead times make the neighbouring markets a natural extension of domestic market. The neighbours with varied economic development and income levels benefit from one another’s comparative strengths — the richer economy provides wider variety of goods and the poorer one provides a cost-effective location for production. Taking clue from other regions, leaders of South Asia too formed South Asian Association for Regional Cooperation (SAARC), which is there for decades but unfortunately this could not make any meaningful impact on regional trade or economic cooperation mainly because of trust deficit and tension caused by unresolved disputes. This is particularly so in the case of Pakistan and India as they have not been able to address the root causes of tension and their rivalry has also virtually jeopardized SAARC. So is the level of mistrust that India is not even allowing to hold scheduled meeting of the Association in Pakistan. India’s designs also stand exposed from its uncalled-for opposition to the China-Pakistan Economic Corridor (CPEC), which is purely an economic adventure and has immense benefits for all potential participants and partners. Pakistan has also demonstrated its sincerity for closer and meaningful ties time and again and only recently Prime Minister Imran Khan, while speaking at the ceremony relating to Kartarpur Corridor, extended an olive branch to India. There are other bottlenecks to regional trade at well that need to be tackled at the forum of SAARC. These include poor trade logistics and abysmal transport infrastructure, high tariff and non-tariff measures, lengthy custom procedures, heavy import duties, port restrictions, lack of appropriate storage facilities, strict visa regime, financial transaction barriers and lack of telecommunication facilities.
Source:Â https://pakobserver.net/regional-trade/
