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The <strong>Pakistan</strong>-<strong>India</strong> <strong>Trade</strong> Relationship: Prospects, Profits, and Pitfalls<br />
countries; and improving infrastructure at border crossings. Despite<br />
recent upgrades at the Attari/Wagah border, the need for x-ray machines,<br />
better warehousing, and testing laboratories remains strong.<br />
So long as direct routes are marred by such inefficiencies, traders<br />
will have little incentive to abandon the longer, more circuitous<br />
routes they have patronized for decades.<br />
5. Establish new oversight institutions. A bilateral commission<br />
should be set up to oversee the <strong>Pakistan</strong>-<strong>India</strong> economic relationship,<br />
with a focus on addressing non-tariff barriers; opening up<br />
more land routes for trade; and promoting more cross-border travel.<br />
A regional trade forum (comprising members of the private sector,<br />
academia, and the media) should be formed to monitor this<br />
bilateral commission. To accommodate inevitable disagreements, a<br />
dispute resolution/grievance redressal mechanism should be established<br />
as well. It should be operated not by the two governments,<br />
but by a private sector consortium incorporating the Confederation<br />
of <strong>India</strong>n Industries, Federation of <strong>India</strong>n Chambers of Commerce<br />
and Industry, <strong>Pakistan</strong> Business Council, and Federation of <strong>Pakistan</strong><br />
Chambers of Commerce and Industry.<br />
6. Use bilateral trade normalization as a springboard for<br />
South Asia-wide trade normalization. Tighter <strong>Pakistan</strong>-<strong>India</strong><br />
trade links—lubricated by more integrated and efficient transport<br />
networks and more open transit and visa arrangements—can raise<br />
the entire region’s trade prospects. <strong>Pakistan</strong>’s extension of MFN<br />
status to <strong>India</strong> puts <strong>Pakistan</strong> and <strong>India</strong> on a more equal footing<br />
within the South Asia Association of Regional Cooperation, and<br />
provides impetus to activate the long-moribund South Asian Free<br />
<strong>Trade</strong> Agreement (SAFTA).<br />
7. Remain committed to the Composite Dialogue process. If<br />
this negotiating process is sidelined, critics of trade normalization<br />
in <strong>Pakistan</strong> would be emboldened, because they could argue that<br />
<strong>Pakistan</strong>’s principled positions on political and territorial issues have<br />
been sacrificed for purely material gain. Such critics could also assert<br />
that more trade does nothing to resolve these core issues.<br />
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