ISLAMABAD: The third round of talks between India and Pakistan on economic and commercial cooperation begins here on Monday. There is uncertainty over whether Pakistan is ready to extend the South Asia Free Trade Agreement (SAFTA) to India.

Commerce Secretary S.M. Menon and his Pakistan counterpart Syed Asif Shah will lead their sides in the three-day talks.

The first day will be devoted to issues under the jurisdiction of the Joint Study Group (JSG) on trade.

Three days ago the SAARC Secretariat in Kathmandu notified that all seven members of the grouping have deposited the instrument of assent on SAFTA, adopted at the Islamabad Summit in January 2004.

It is to be operationalised from July 1, 2006. However, doubts linger on the intent of Pakistan in extending SAFTA to India.

Minister's claim

In an interview to a Pakistan daily a few days ago, Commerce Minister Humayun Akthar Khan claimed that bilateral trade would continue to be guided by the `positive-negative lists.' His logic was that both would have to wait for resolution of the Kashmir issue before full-fledged commercial relations are established.

The Indian Government took up the matter with the Pakistan Government.

According to sources, there has been no response to the clarification sought on SAFTA. This subject is expected to figure at the talks.

On trade

The second meeting of the JSG on trade assumes importance as at the last meeting in New Delhi both sides agreed that the JSG would be preceded by the meeting of the Sub-Groups on Non-Tariff Barriers (NTBs) and Customs Cooperation and Trade Facilitation to formulate recommendations for consideration by the JSG.

Negative trade balance

Since the revival of the composite dialogue process in 2004 Pakistan has been complaining that it continues to have a negative trade balance with India because of non-tariff barriers practiced by India. New Delhi has promised to look into the grievances of Islamabad on this count and some progress could be expected on this count at the latest meeting.

Ahead of the talks, Pakistan has stuck to its stance of linking the issues of Most Favoured Nation (MFN) status for India and transit facilities for its goods with progress in resolution of political issues, including Kashmir.

"Pakistan's stand on MFN status to India and opening of Attari-Wagah border on permanent basis for trade of all commodities is very clear and it is linked with progress on political issues, including Kashmir," Mr. Shah told the media.

Shipping protocol

Other issues which are expected to come up include the review of the air services agreement and the shipping protocol of 1975, opening of branches of the scheduled banks in each other's territory and concluding a memorandum of understanding between the Securities and Exchange Board of India and the Securities and Exchange Commission of Pakistan.

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