India and Pakistan have agreed to construct a new border entry point and road, for Sikh pilgrims to visit Gurdwara Darbar Sahib there, at Kartarpur. The decision coincides with the 550th anniversary of the birth of Guru Nanak, founder of the Sikh religion.
The decision raises hope of a thaw in mutual relations, leading to more cross-border trade in due course. This corridor has been a request from India for almost two decades. What has changed in recent days is the advent of Imran Khan at Pakistan’s helm. Soon after taking over, he said: “If India walks one step, we will walk two steps towards normalisation of the relationship.”
A couple of months before, he had reached out to the Indian prime minister but was cold-shouldered. That does not seem to have weighed on his latest decision to help Sikh Pilgrims visit one of their holiest shrines.
Khan had flagged improved trade relations with India as a priority. As a first step, he could consider granting ‘Most Favoured Nation’ (MFN, the term for non-discriminatory access) treatment to Indian-origin goods. Later, both nations could consider reduction of tariffs to allow freer movement of goods. As a prelude to more of people to people interaction, more bilateral sporting events and better cultural ties.
Trade creates a vested interest for peace. If the income of more traders and service providers depends on cross-border trade, the chances are that they would form pressure groups to urge peaceful relations. In turn, any improvement in relations could lead to lower defence expenditure, making more money available for development in both the countries.
This is not to wish away the problems that bedevil our relations or to play down the complexities.
However, the future need not necessarily be a replay of the past. That a new leaf has been turned in opening a corridor for Sikh pilgrims is evidence.
A ray of hope for easing of global trade tensions also emerges from the coming meeting this week between American President Donald Trump and Chinese President Xi Jinping, at the G-20 meeting of the world’s developed economies, in Buenos Aires. Both sides have imposed tit-for-tat tariffs on each other’s products in recent months.
Trump has repeatedly accused China of stealing intellectual property, erecting barriers to American companies that try to operate in China, and for the huge trade imbalance between the two countries. The world’s two biggest economies bickered on trade at the Asia-Pacific Economic Cooperation summit a few days before. The group failed to agree on a joint communiqué for the first time in its history.
The International Monetary Fund has downgraded its global growth outlook for this and next year, due to trade fights between big economies. Anxieties that US-China trade tensions could lower growth have also rattled global markets.
Trump has a reputation for initially taking a maximalist position and then getting down to workable deals, as in the case of negotiations with Mexico and Canada. Hopefully, he will live up to that by defusing trade tensions in his meet with Xi Jinping.
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