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Pakistan's opportunity: a free-trade deal with rival India

Trade is not a cure-all for grinding poverty, but a free-trade deal between Pakistan and India would help foster economic growth and regional peace. And the political timing has never been better. Pakistan's new prime minister, Nawaz Sharif, should seize the moment.


Pakistan laborers unload sacks of onion imported from neighboring India May 14 at the Pakistani border crossing of Wagah. Op-ed contributor Jesse Kaplan writes: 'The Pakistan-India border is 1,800 miles long, but trade flows only through one official crossing.'

K.M. Chaudary/AP/file

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Pakistan's new prime minister, Nawaz Sharif, confronts no shortage of challenges: an economy at risk of collapse, a woefully inadequate electrical supply that causes rolling blackouts across the country, rising ethnic and sectarian tensions, and the threat of internal terrorism.

Yet Mr. Sharif also has a significant economic and political opportunity, and he should seize it. Pakistan is due to normalize trade relations with India this year by granting its neighbor and strategic rival most-favored-nation trade status. Sharif should go further and pursue a full-blown India-Pakistan free-trade agreement, much like the North American Free Trade Agreement.

The longstanding animosity in India-Pakistan relations has left South Asia as one of the world's least-integrated regions. Since the two countries were created in the 1947 partition of British India, they have fought four wars.

As a result, intraregional trade in South Asia accounts for only 5 percent of the region's total trade, a proportion dwarfed even by Africa's 10 percent of intraregional trade (not to mention East Asia's 53 percent). Existing organizations such as the South Asian Association for Regional Cooperation have been unable to promote anything more than cosmetic integration.


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