Guest post by RAZA RUMI

Reports suggest that Pakistan has decided, in principle, to grant the Most Favoured Nation (MFN) status to India. Much progress has taken place since the earlier announcement and several parleys between the officials suggest that trade relations may finally ‘normalise’. India already conferred MFN status to Pakistan in 1996. India and Pakistan have no formal trade agreement. Until now Pakistan maintained a Positive List of importable items from India consisting of 1075 items.

Most Favoured Nation: Under the WTO agreements, countries cannot normally discriminate between their trading partners. Grant someone a special favour (such as a lower customs duty rate for one of their products) and you have to do the same for all other WTO members. This principle is known as most-favoured-nation (MFN) treatment. It is so important that it is the first article of the General Agreement on Tariffs and Trade (GATT), which governs trade in goods. MFN is also a priority in the General Agreement on Trade in Services (GATS). Continue reading Trading with the Enemy: Raza Rumi →