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Pipeline a conduit for better South Asian ties ?

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    Pipeline a conduit for better South Asian ties ?

    Indian businessmen are coming to Pakistan next month to talk about increased economic co-operation between our countries. But despite arguments for the neccessity of regional economic co-operation i.e. WTO, is it realistic in the present environment or some time in the near future?

    Maybe the Gas pipeline from Iran to India via Pakistan can hasten the moves to increased trust and economic co-operation?


    Pipeline a conduit for better South Asian ties

    KARACHI - A business delegation from India will visit Islamabad next month on the invitation of the Pakistan government, news reports indicate.

    On May 22, up to 40 Indian businessmen will talk to their Pakistani counterparts about ways to increase trade volume, now around 7 billion rupees (US$114.75 million) a year, less than 2 percent of India's total trade. The business delegation, led by the Federation of Indian Chambers of Commerce and Industry (FICCI), will include federation president Chirayu Amin and Thomas Cook (India) chairman Pradip Madhavji, and representatives from the Tata group of companies, among others.

    Sources said that the visit was part of the ongoing efforts to normalize relations with Pakistan, otherwise known as Track-II diplomacy, which was disrupted by the Kargil war of 1999 over Kashmir. Pakistan's government has always insisted that trade with India would only be possible when the Kashmir issue is resolved.

    The war also disrupted the activities of the India-Pakistan Chamber of Commerce and Industry, which was created in April 1999 during Prime Minister Atal Bihari Vajpayee's bus journey to Lahore. The Indian government has cleared the visit in response to an invitation from the Federation of Pakistan Chambers of Commerce. The day after the bilateral talks between the businessmen of the two countries, there will be a multilateral business meeting.

    Sources also felt that important issues such as building a 2,500 kilometer pipeline to carry natural gas from Iran through Pakistan to India would also figure in the discussions. News reports on Monday quoted Pakistan's Minister of Commerce Abdul Razak Dawood as saying his government has no objection to the pipeline.

    During its visit to Iran earlier this month, Vajpayee's delegation also pursued discussions on the pipeline. United States sanctions that made it tough for Iran to sell energy to other countries expire this year. Trade relations with Pakistan will help reduce political risks that could affect investments in the pipeline venture.

    India-Pakistan trade ties have three components, namely: "black" or illegal trade transacted through the land borders; circular or "informal" trade which is carried out through "third" countries and re-exported from there to Pakistan; finally, formal trade through imports/exports of merchandise through all recognized seaports, airports, land customs stations and inland container depots.

    The illegal trade channels are smugglers who operate along the 675 km unfenced stretch of the Rajasthan sector along the contiguous Indo-Pakistan border; and "carriers", people who misuse personal baggage through the "green channel" facilities at international airports. Circular trade is conducted through agents who are stationed in free ports like Singapore or Dubai and estimated to be $2 billion. Thus, the combined volumes of illegal and circular trade are much larger than formal levels of trade which in reality, therefore, amounts to "pseudo" trade between the two countries.

    The Indian textile industry in particular is keen to join hands with their Pakistani counterparts to combat challenges arising out of the growing global protectionism in the shape of free trade blocs, as well as the post WTO regime.

    Shri Shishir Jaipuria, the leader of an 11-member textile delegation from northern India currently in Pakistan, while suggesting closer cooperation between the textile sectors of both the countries, also briefly narrated the robust growth of Chinese industry he had witnessed during a recent visit.

    He said "it is strongly felt and recommended by the Northern India Textile Mills' Association [NITMA] that India, Pakistan, Bangladesh, Sri Lanka and other neighboring countries should mutually support each other in enhancing their trade relationships to meet the challenges in the post WTO regime".

    Jaipuria said trade relations through mutual trust and cooperation should be developed with regular exchanges of information in regard to technology, prices of raw materials and finished products.

    Jaipuria sounded a warning that if both countries did not arise to the occasion they would be doomed in the face of the rapidly changing competitive world textile market and the challenges of the WTO, to which he recommended collective efforts for offsetting rising safeguards in the form of dumping duties imposed by the developed world on textile exports.

    He said anti-dumping provisions are being frequently used by developed countries, therefore, countries had to evaluate their strengths and weaknesses against growing protectionism and evolve strategies to overcome the barriers.

    Shishir Jaipuria, president of NITMA, further said that the regionalization of the textile trade is rapidly becoming one of the important instruments for redirecting trade worldwide. There are about 200 free trade agreements and customs unions - a number well beyond the total membership of the WTO.

    Under such arrangements, he said, the US and the European Union have increasingly integrated their production with neighboring member countries. With textiles considered as sensitive by these countries, tariffs are relatively higher in comparison to other industrial products.

    Well i personally think all of South Asia's problems are linked with Kashmir, if Kashmir ain't solved we have no peace and no cooperation.
    I mean come on SAARC is an utter failure and complete waste of time.


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    You can't fix stupid. So might as well troll them!


      It seems the onus is more on India to promote South Asian regional co-operation, as they need it more to compete with the likes of China. Pakistan's economy is more integrated with West Asia - Iran, the Gulf, Central Asia etc.

      So if India truly desires regional co-operation it has to give ground on Kashmir, and drop it's bully boy attitude towards all it's neighbours.


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