Pakistan, India take Another Cautious Step Forward

By Alex Rodriguez and Mark Magnier for The Los Angeles Times

 

In cautious increments, nuclear archrivals Pakistan and Indiahave been easing the pall of tension that has overshadowed the two nations in recent years, as Islamabad increasingly worries about another neighbor: volatile Afghanistan.

The latest move toward rapprochement came last week, when the Pakistani Cabinet announced it would normalize trade relations with India by granting its longtime foe “most favored nation” status.

The designation has practical ramifications, including the elimination of discriminatory pricing and mutual imposition of lower tariffs and high import quotas. More important, however, it marks the latest in a series of decisions and events that signals a warming in relations between two countries that have fought three wars since their independence after the 1947 partition of British India.

Driving the move toward improved relations with India is Pakistan’s belief that strained ties with traditional allies such as the U.S. and Afghanistan are leaving it increasingly isolated, analysts say. India and Afghanistan signed a strategic partnership pact last month that included the training of Afghan troops by Indian forces — a move that rankled Islamabad.

The steps between the two South Asian neighbors have been small yet striking.

After an Indian military helicopter flying in bad weather strayed into Pakistani-controlled territory Oct. 23, Pakistani troops promptly released the aircraft and its crew and returned them to India, averting a crisis. Earlier this year, the two countries also resumed peace talks scuttled by the 2008 attacks in Mumbai that killed 166 people. Pakistani militants carried out the attacks, and India has accused Pakistan’s ISI spy agency of involvement in the assault.

Both countries are also discussing a deal that would allow Pakistan to import electricity from India to relieve massive power shortages crippling the Muslim nation’s economy. In addition, India didn’t oppose Pakistan’s nonpermanent seat on the United Nations Security Council last month, which passed by a single vote. And, earlier this year, New Delhi didn’t fight a European Union bid to allow duty-free imports of Pakistani textiles, even though it would cost competing Indian textile makers an estimated $1 billion a year in lost sales.

Experts warn that major roadblocks still loom. At the top of that list is the divided Himalayan region of Kashmir, claimed by both countries and the cause of two wars since 1947. A dispute over water rights remains unresolved, and New Delhi continues to accuse the ISI of backing militant groups that target India.

Still, bolstering trade relations between the two countries, said Zafar Hilaly, a former Pakistani ambassador to the U.S., “is a good first step. It shows a genuine feeling within Pakistan that the relationship should be normalized.”

Particularly significant is the Pakistani military’s decision to endorse granting MFN status to India. Foreign policy remains the purview of Pakistan’s security establishment, especially when it comes to the country historically regarded by the military as its chief enemy.

“All the stakeholders, including the military … are on board,” Pakistani Information Minister Firdous Ashiq Awan said in announcing the decision. “Such a big step could not be taken alone.”

The military’s backing of MFN status for India, Hilaly said, likely represents a realization that an easing of tensions with New Delhi may now be in Pakistan’s best interests, particularly at a time when relations with Washington and Kabul have soured. Both the U.S. and Afghanistan assert that their efforts to battle Afghan Taliban insurgents have been hampered by Pakistan’s backing of the insurgency there, a charge that Islamabad denies.

“What has happened is that, with respect to issues that the military faces, the priorities have changed,” Hilaly said. “India is still the main culprit as far as security is concerned, but the eastern front is much less active than the one developing in Afghanistan.”

Officials in Washington have been encouraged by the movement toward trade normalization between Islamabad and New Delhi, especially because economic interdependence is seen as an ideal path toward stability in South Asia. Testifying before the House Foreign Affairs Committee last month, Secretary of State Hillary Rodham Clinton called the Pakistan-India relationship “the real game-changer in the region.”

“We have in Pakistan today a leadership, both civilian and military, that wants to see progress with India, and we have the same on the Indian side,” Clinton told lawmakers. “I firmly believe greater regional economic integration would revolutionize the economy in Pakistan.”

Though India extended MFN status to Pakistan in 1996, Pakistan had not reciprocated until now. Observers in India wondered why it took Islamabad so long to see the value in the move. “Not allowing MFN status hurt Pakistan more than India and was shortsighted,” said Satish Chandra, an analyst and former Indian ambassador to Pakistan. “It was an exercise in cutting your nose to spite your face.”

With trade normalization, experts estimate two-way trade could triple to $8 billion within five years. Official trade flows currently run nearly 7 to 1 in New Delhi’s favor, with Indian exports to Pakistan totaling about $2.33 billion versus $332 million in the other direction.

“When trade picks up, there’s more and more confidence to ease political and other differences,” said Shaqeel Qalander, a furniture maker and former president of a business group on the Indian-held portion of Kashmir. “It’s a very good decision.”

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