India and Pakistan agreed Tuesday to normalize two-way trade,
signifying a gradual thaw in relations between the two bitter rivals.
At
the end of two days of bilateral trade talks, Pakistan agreed to give
its neighbor by early next year a small list of items that India cannot
trade in with Pakistan. Both sides hope to do away with the list
altogether by the end of 2012, freeing up all trade between the two
countries, Indian Commerce Secretary Rahul Khullar told reporters.
"The
move to full normalization of trade relations shall be sequenced," the
two nations said in a joint statement at the end of the talks.
Two
weeks ago, Pakistan's Cabinet approved a decision to give India
most-favored nation status. India gave Pakistan the status in 1996 and
had since pressed Islamabad to reciprocate.
Pakistani Commerce
Secretary Zafar Mahmood said his government wants a complete
normalization of bilateral trade, where all goods can be traded freely
between the two countries.
Granting most-favored nation status
means the two countries can trade on equal terms, typically giving each
other low tariffs and high import quotas.
The World Bank estimates
annual trade between India and Pakistan is around $1 billion and could
grow to as much as $9 billion if barriers are lifted.
Tuesday's
decision to normalize trade ties marks another milestone in the rocky
relations between the nuclear-armed nations, who have fought three wars
since gaining independence from Britain in 1947.
Earlier this
year, India and Pakistan decided to restart wide-ranging peace talks.
Last month, Pakistan quickly returned an Indian helicopter and its crew,
which had strayed across the tense border. Also last week, top leaders
of both the countries met and vowed to resolve their long-standing
problems. AP
