India Officially Cancels MFN Status of Pakistan [Important Current Affairs]
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MFN status of Pakistan Revoked | Important Current Affairs
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India has made a stern stride of pulling back the Most Favored Nation or MFN Status of Pakistan. This move would empower India to build customs duty on goods originating from Pakistan. The decision was taken in the gathering of the Cabinet Committee on Security (CCS) that took place on 15th February 2019.
What is MFN? | Important Current Affairs
In international monetary relations and universal legislative politics, “most favoured nation” (MFN) is a status or level of treatment agreed by one state to another in Global Exchange.
The term implies that the nation which is the beneficiary of this treatment must ostensibly receive equivalent trade preferences as the “most favoured nation” by the nation granting such treatment.
As a result, a nation that has been given MFN status may not be treated less beneficially than some other nation.
There is a discussion in legal circles whether MFN statements in bilateral investment treaties bargains only substantive rules or likewise procedural protections.
The members of the World Trade Organization (WTO) consent to accord MFN status to one another. Exceptions allow for particular treatment of developing countries, regional free trade areas and traditions associations.
MFN is one of the founding pillars of WTO trade law.
More or less, MFN is a non-discriminatory trade policy as it guarantees equal trading among all WTO member nations instead of exclusive trading privileges.
What does it mean for Pakistan? | Important Current Affairs
India had granted MFN status to Pakistan in 1996, a year after the formation of WTO. But Pakistan hasn’t accorded MFN status to India till now. The reason for this is decades of conflict, mistrust and war. Now the total India-Pakistan trade has increased marginally to $2.41 billion in 2017-18 as compared to $ 2.27 billion in 2016-17.
India had imported goods worth $488.5 million in 2017-18 and exported goods worth $ 1.92 billion in that scale.
India’s exports cotton, dyes, chemicals, vegetables and iron and steel; while its imports incorporate fruits, cement, leather, chemicals and spices. Given that Indo-Pakistan trade relations are not very strong; this step of revoking the MFN status is just emblematic.
ALSO READ –
What is the Cabinet Committee on Security? | Important Current Affairs
There are 6 Cabinet Committees in India namely –
- Appointments Committee of the Cabinet,
- Committee on Accommodation,
- Cabinet Committee on Economic Affairs,
- Cabinet Committee on Parliamentary Affairs,
- Cabinet Committee on Political Affairs and
- Cabinet Committee on Security
The Cabinet Committee in Security (CCS) of the Central Government of India investigates the issue of defence expenditures and National Security. It comprises of the Prime Minister, Minister of Home Affairs, Minister of External Affairs and, Minister of Finance and Minister of Defence. It is led by the Prime Minister.
Aftermaths of MFN | Important Current Affairs
Now, Pakistan is working out free trade agreements (FTAs) with different countries, especially China and hopes to complete second FTA with China by June 2019.
However, it is important to note that Pakistan has not reciprocated MFN status to India, reportedly citing “non-tariff barriers” erected by India as well as huge trade imbalance.
Pakistan keeps up negative list of 1,209 items which are not allowed to be imported from India. Be that as it may, it allows only 137 items to be sent from India through Wagah border land route.
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