Pakistan backtracks on MFN: PM says status not granted to India

Backtracking on granting the Most Favoured Nation (MFN) status to India, Pakistan Prime Minister Yousuf Raza Gilani has said the Commerce Ministry has only been tasked by the Cabinet to move forward on the issue in bilateral trade negotiations.

His statement came three days after Pakistan Information Minister Firdous Awan announced following a Cabinet meeting that it has been decided "unanimously" to grant MFN status to India. Pakistan had been dilly-dallying on the issue since 1996 when India granted it the MFN status.

Since the Wednesday announcement of Awan, right-wing extremists in Pakistan and business lobbies in the country's crucial Punjab province have been vehemently opposing the decision. The business lobbies dealing with engineering and pharmaceutical products are of the view that granting of MFN status to India would be detrimental to their business interests.

"The Cabinet has only given its approval in principle to move forward on the issue (of MFN) and permitted the Ministry of Commerce, which is actively engaged in trade talks with New Delhi, to negotiate with it trade-related issues," Gilani told reporters at his residence in Lahore.

"We will give it the go-ahead if the situation is quite favourable and in the national interest. Otherwise, proceedings on it would be withheld," the Premier was quoted as saying by the media.

Gilani's remarks came even as his Indian counterpart Manmohan Singh welcomed Pakistan's decision to grant MFN status to India but said it should have been done long ago.

With contradictory statements coming from Pakistan, its High Commissioner to New Delhi Shahid Malik Friday denied that Islamabad had taken a U-turn on granting the MFN status to India. "Let me correct you, there is no question of U-turn about it."

After the Information Minister's announcement on Wednesday, the Pakistan Foreign Office clarified that the Cabinet had only taken an in-principle decision on the issue and both countries would have to work towards the goal in further engagements.

The issue of normalising trade ties also figured in Foreign Minister Hina Rabbani Khar's consultations yesterday with top military officials, including ISI chief Lt Gen Ahmed Shuja Pasha.

Gilani said the Commerce Ministry would have to make important decisions independently in bargaining with India over trade policy and hence it had sought the Cabinet's go-ahead.

He contended the Cabinet did not have to refer decisions made on the MFN issue to Parliament.

"We can brief Parliament over the Cabinet's decision of going ahead with MFN, but according to my point of view it is not necessary. Only Cabinet approval is necessary to negotiate with other countries," he said.

Parliament would be briefed at an "appropriate time", he said.