What Does MFN Trade Mean for India and Pakistan? Can MFN be a Panacea?
India and Pakistan, the two largest economies in South Asia, share a common border, culture and history. Despite the benefits of proximity, the two neighbors have barely traded with each other. In 2011, trade with Pakistan accounted for less than h...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2013
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| Online Access: | http://documents.worldbank.org/curated/en/2013/06/17857354/mfn-trade-mean-india-pakistan-can-mfn-panacea http://hdl.handle.net/10986/15844 |
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okr-10986-15844 |
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oai_dc |
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Digital Repository |
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Foreign Institution |
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Digital Repositories |
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World Bank Open Knowledge Repository |
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World Bank |
| language |
English en_US |
| topic |
ACIDS ADVANCED COUNTRY AGGREGATE CONSUMPTION AGRICULTURAL PRODUCTS AGRICULTURE AIR AIR ROUTES AIR TRANSPORT AIR TRAVEL AIRCRAFT APPAREL AVERAGE TARIFF AVERAGE TARIFFS BARRIER BARRIERS TO TRADE BASE YEAR BENEFITS OF TRADE BENEFITS OF TRADE FACILITATION BILATERAL FREE TRADE AGREEMENT BILATERAL TRADE BILATERAL TRADE AGREEMENTS BILATERAL TRADE RELATIONS BORDER CROSSINGS BORDER INFRASTRUCTURE BORDER TRADE BOTTLENECKS CHAMBERS OF COMMERCE COMMODITIES COMMODITY COMPARATIVE ADVANTAGE COMPARATIVE ADVANTAGES COMPETITIVENESS CONGESTION CONNECTIVITY CONSTANT ELASTICITY OF SUBSTITUTION CONSTANT RETURNS TO SCALE CONSUMERS CONSUMPTION SUBSIDIES COST ANALYSIS CROSS-BORDER ISSUE CROSS-BORDER TRANSACTIONS CUSTOMS CUSTOMS AUTHORITIES CUSTOMS OFFICIALS CUSTOMS PROCEDURES DEBT DEMOGRAPHIC DEVELOPING COUNTRIES DEVELOPMENT POLICY DIGITAL SIGNATURE DIVIDEND DIVIDENDS DOMESTIC ECONOMY DOMESTIC MARKET E-COMMERCE ECONOMIC COOPERATION ECONOMIC DEVELOPMENT ECONOMIC INTEGRATION ECONOMIC POLICY ECONOMIC RELATIONS ECONOMIC STRENGTH ECONOMIES OF SCALE ELASTICITIES ELASTICITY ELASTICITY OF SUBSTITUTION ELASTICITY VALUE EQUILIBRIUM EXPORT BASES EXPORT SECTORS EXPORT SHARE EXPORT SUBSIDIES EXPORTERS EXPORTS FACTORS OF PRODUCTION FINANCIAL CRISIS FINANCIAL INSTITUTIONS FORECASTS FOREIGN INVESTMENT FREE TRADE FREE TRADE AGREEMENT FUELS FUTURE RESEARCH GDP GENERAL EQUILIBRIUM GENERAL EQUILIBRIUM MODEL GLOBAL COMPUTABLE GENERAL EQUILIBRIUM GLOBAL INVESTMENT GLOBAL TRADE GLOBAL TRADE ANALYSIS GLOBALIZATION GRAVITY ESTIMATES GRAVITY MODEL GRAVITY MODEL APPROACH GRAVITY MODELS HARMONIZATION HIGH TARIFFS HIGHWAY IMPORT BANS IMPORT COSTS IMPORT DUTIES IMPORT PRICE IMPORT PRICES IMPORT TARIFF IMPORT TAXES IMPORTS IMPORTS OF TEXTILES INCOME LEVELS INCOME TAX INDUSTRIAL PRODUCTIVITY INDUSTRY TRADE INEFFICIENCY INFORMATION FLOWS INFORMATION SYSTEM INFRASTRUCTURE DEVELOPMENT INFRASTRUCTURE PROJECTS INTELLECTUAL PROPERTY INTERMEDIATE INPUTS INTERNATIONAL ECONOMICS INTERNATIONAL TRADE INTRAREGIONAL TRADE MARKET ACCESS MARKET SIZE METAL PRODUCTS MODE OF TRANSPORT MOST FAVORED NATION MOTOR VEHICLES NATURAL RESOURCES NEW MARKETS NEW PRODUCTS NON-TARIFF BARRIERS ONLINE BANKING OUTPUT OUTPUTS PAYMENT SYSTEMS PER CAPITA INCOME PER CAPITA INCOMES PERFECT COMPETITION PETROLEUM PRODUCTS PORT OF ENTRY PORTFOLIO POSITIVE EFFECTS PREFERENTIAL RATE PREFERENTIAL TRADE PREFERENTIAL TRADE AGREEMENTS PREFERENTIAL TREATMENT PRICE BANDS PRIMARY FACTORS PROTECTIONIST QUANTITATIVE RESTRICTIONS RAIL RAIL CROSSING RAIL NETWORKS RAIL TRAVEL RAILWAY RAILWAYS REAL GDP REGIONAL INTEGRATION REGIONAL TRANSPORT REGIONALISM REGULATORY SYSTEMS ROAD ROAD NETWORK ROUTE SAVINGS SOURCING STATE BANK TARIFF BARRIERS TARIFF CHANGES TARIFF DISPERSION TARIFF RATES TAX TAX REVENUES TECHNICAL BARRIERS TIRES TRADE AGREEMENT TRADE BALANCE TRADE CLASSIFICATION TRADE COOPERATION TRADE COSTS TRADE CREATION TRADE DEFICIT TRADE DIVERSION TRADE DIVERSION EFFECT TRADE FACILITATION TRADE FINANCE TRADE FLOWS TRADE IN GOODS TRADE LIBERALIZATION TRADE LOGISTICS TRADE PARTNERSHIP TRADE POLICIES TRADE PROMOTION TRADE REGIME TRADE REGIMES TRADE RELATION TRADE RELATIONS TRADE ROUTES TRADE SURPLUS TRAFFIC TRAINS TRAMWAY TRANSACTION COST TRANSACTION COSTS TRANSACTIONS COSTS TRANSIT TRANSIT TRADE TRANSPARENCY TRANSPORT TRANSPORT EQUIPMENT TRANSPORT FACILITATION TRANSPORT NETWORK TRANSPORTATION TRANSPORTATION COST TRANSPORTATION COSTS TRUCKS TRUE UNILATERAL LIBERALIZATION UTILITY FUNCTION VALUE ADDED VEHICLES VERTICAL INTEGRATION VOLUME OF TRADE WELFARE GAINS WELFARE IMPACTS WELFARE LOSS WTO ZERO PROFITS |
| spellingShingle |
ACIDS ADVANCED COUNTRY AGGREGATE CONSUMPTION AGRICULTURAL PRODUCTS AGRICULTURE AIR AIR ROUTES AIR TRANSPORT AIR TRAVEL AIRCRAFT APPAREL AVERAGE TARIFF AVERAGE TARIFFS BARRIER BARRIERS TO TRADE BASE YEAR BENEFITS OF TRADE BENEFITS OF TRADE FACILITATION BILATERAL FREE TRADE AGREEMENT BILATERAL TRADE BILATERAL TRADE AGREEMENTS BILATERAL TRADE RELATIONS BORDER CROSSINGS BORDER INFRASTRUCTURE BORDER TRADE BOTTLENECKS CHAMBERS OF COMMERCE COMMODITIES COMMODITY COMPARATIVE ADVANTAGE COMPARATIVE ADVANTAGES COMPETITIVENESS CONGESTION CONNECTIVITY CONSTANT ELASTICITY OF SUBSTITUTION CONSTANT RETURNS TO SCALE CONSUMERS CONSUMPTION SUBSIDIES COST ANALYSIS CROSS-BORDER ISSUE CROSS-BORDER TRANSACTIONS CUSTOMS CUSTOMS AUTHORITIES CUSTOMS OFFICIALS CUSTOMS PROCEDURES DEBT DEMOGRAPHIC DEVELOPING COUNTRIES DEVELOPMENT POLICY DIGITAL SIGNATURE DIVIDEND DIVIDENDS DOMESTIC ECONOMY DOMESTIC MARKET E-COMMERCE ECONOMIC COOPERATION ECONOMIC DEVELOPMENT ECONOMIC INTEGRATION ECONOMIC POLICY ECONOMIC RELATIONS ECONOMIC STRENGTH ECONOMIES OF SCALE ELASTICITIES ELASTICITY ELASTICITY OF SUBSTITUTION ELASTICITY VALUE EQUILIBRIUM EXPORT BASES EXPORT SECTORS EXPORT SHARE EXPORT SUBSIDIES EXPORTERS EXPORTS FACTORS OF PRODUCTION FINANCIAL CRISIS FINANCIAL INSTITUTIONS FORECASTS FOREIGN INVESTMENT FREE TRADE FREE TRADE AGREEMENT FUELS FUTURE RESEARCH GDP GENERAL EQUILIBRIUM GENERAL EQUILIBRIUM MODEL GLOBAL COMPUTABLE GENERAL EQUILIBRIUM GLOBAL INVESTMENT GLOBAL TRADE GLOBAL TRADE ANALYSIS GLOBALIZATION GRAVITY ESTIMATES GRAVITY MODEL GRAVITY MODEL APPROACH GRAVITY MODELS HARMONIZATION HIGH TARIFFS HIGHWAY IMPORT BANS IMPORT COSTS IMPORT DUTIES IMPORT PRICE IMPORT PRICES IMPORT TARIFF IMPORT TAXES IMPORTS IMPORTS OF TEXTILES INCOME LEVELS INCOME TAX INDUSTRIAL PRODUCTIVITY INDUSTRY TRADE INEFFICIENCY INFORMATION FLOWS INFORMATION SYSTEM INFRASTRUCTURE DEVELOPMENT INFRASTRUCTURE PROJECTS INTELLECTUAL PROPERTY INTERMEDIATE INPUTS INTERNATIONAL ECONOMICS INTERNATIONAL TRADE INTRAREGIONAL TRADE MARKET ACCESS MARKET SIZE METAL PRODUCTS MODE OF TRANSPORT MOST FAVORED NATION MOTOR VEHICLES NATURAL RESOURCES NEW MARKETS NEW PRODUCTS NON-TARIFF BARRIERS ONLINE BANKING OUTPUT OUTPUTS PAYMENT SYSTEMS PER CAPITA INCOME PER CAPITA INCOMES PERFECT COMPETITION PETROLEUM PRODUCTS PORT OF ENTRY PORTFOLIO POSITIVE EFFECTS PREFERENTIAL RATE PREFERENTIAL TRADE PREFERENTIAL TRADE AGREEMENTS PREFERENTIAL TREATMENT PRICE BANDS PRIMARY FACTORS PROTECTIONIST QUANTITATIVE RESTRICTIONS RAIL RAIL CROSSING RAIL NETWORKS RAIL TRAVEL RAILWAY RAILWAYS REAL GDP REGIONAL INTEGRATION REGIONAL TRANSPORT REGIONALISM REGULATORY SYSTEMS ROAD ROAD NETWORK ROUTE SAVINGS SOURCING STATE BANK TARIFF BARRIERS TARIFF CHANGES TARIFF DISPERSION TARIFF RATES TAX TAX REVENUES TECHNICAL BARRIERS TIRES TRADE AGREEMENT TRADE BALANCE TRADE CLASSIFICATION TRADE COOPERATION TRADE COSTS TRADE CREATION TRADE DEFICIT TRADE DIVERSION TRADE DIVERSION EFFECT TRADE FACILITATION TRADE FINANCE TRADE FLOWS TRADE IN GOODS TRADE LIBERALIZATION TRADE LOGISTICS TRADE PARTNERSHIP TRADE POLICIES TRADE PROMOTION TRADE REGIME TRADE REGIMES TRADE RELATION TRADE RELATIONS TRADE ROUTES TRADE SURPLUS TRAFFIC TRAINS TRAMWAY TRANSACTION COST TRANSACTION COSTS TRANSACTIONS COSTS TRANSIT TRANSIT TRADE TRANSPARENCY TRANSPORT TRANSPORT EQUIPMENT TRANSPORT FACILITATION TRANSPORT NETWORK TRANSPORTATION TRANSPORTATION COST TRANSPORTATION COSTS TRUCKS TRUE UNILATERAL LIBERALIZATION UTILITY FUNCTION VALUE ADDED VEHICLES VERTICAL INTEGRATION VOLUME OF TRADE WELFARE GAINS WELFARE IMPACTS WELFARE LOSS WTO ZERO PROFITS De, Prabir Raihan, Selim Ghani, Ejaz What Does MFN Trade Mean for India and Pakistan? Can MFN be a Panacea? |
| geographic_facet |
South Asia India Pakistan |
| relation |
Policy Research Working Paper;No. 6483 |
| description |
India and Pakistan, the two largest
economies in South Asia, share a common border, culture and
history. Despite the benefits of proximity, the two
neighbors have barely traded with each other. In 2011, trade
with Pakistan accounted for less than half a percent of
India's total trade, whereas Pakistan's trade with
India was 5.4 percent of its total trade. However, the
recent thaw in India-Pakistan trade relations could signal a
change. Pakistan has agreed to grant most favored nation
status to India. India has already granted most favored
nation status to Pakistan. What will be the gains from trade
for the two countries? Will they be inclusive? Is most
favored nation status a panacea? Should the granting of most
favored nation status be accompanied by improvements in
trade facilitation, infrastructure, connectivity, and
logistics to reap the true benefits of trade and to promote
shared prosperity? This paper attempts to answer these
questions. It examines alternative scenarios on the gains
from trade and it finds that what makes most favored nation
status work is the trade facilitation that surrounds it. The
results of the general equilibrium simulation indicate
Pakistan's most favored nation status to India would
generate larger benefits if it were supported by improved
connectivity and trade facilitation measures. In other
words, gains from trade would be small in the absence of
improved connectivity and trade facilitation. The idea of
trade facilitation is simple: implement measures to reduce
the cost of trading across borders by improving
infrastructure, institutions, services, policies,
procedures, and market-oriented regulatory systems. The
returns can be huge, even with modest resources and limited
capacity. The dividends of trade facilitation can be shared
by all. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
De, Prabir Raihan, Selim Ghani, Ejaz |
| author_facet |
De, Prabir Raihan, Selim Ghani, Ejaz |
| author_sort |
De, Prabir |
| title |
What Does MFN Trade Mean for India and Pakistan? Can MFN be a Panacea? |
| title_short |
What Does MFN Trade Mean for India and Pakistan? Can MFN be a Panacea? |
| title_full |
What Does MFN Trade Mean for India and Pakistan? Can MFN be a Panacea? |
| title_fullStr |
What Does MFN Trade Mean for India and Pakistan? Can MFN be a Panacea? |
| title_full_unstemmed |
What Does MFN Trade Mean for India and Pakistan? Can MFN be a Panacea? |
| title_sort |
what does mfn trade mean for india and pakistan? can mfn be a panacea? |
| publisher |
World Bank, Washington, DC |
| publishDate |
2013 |
| url |
http://documents.worldbank.org/curated/en/2013/06/17857354/mfn-trade-mean-india-pakistan-can-mfn-panacea http://hdl.handle.net/10986/15844 |
| _version_ |
1764431601154916352 |
| spelling |
okr-10986-158442021-04-23T14:03:23Z What Does MFN Trade Mean for India and Pakistan? Can MFN be a Panacea? De, Prabir Raihan, Selim Ghani, Ejaz ACIDS ADVANCED COUNTRY AGGREGATE CONSUMPTION AGRICULTURAL PRODUCTS AGRICULTURE AIR AIR ROUTES AIR TRANSPORT AIR TRAVEL AIRCRAFT APPAREL AVERAGE TARIFF AVERAGE TARIFFS BARRIER BARRIERS TO TRADE BASE YEAR BENEFITS OF TRADE BENEFITS OF TRADE FACILITATION BILATERAL FREE TRADE AGREEMENT BILATERAL TRADE BILATERAL TRADE AGREEMENTS BILATERAL TRADE RELATIONS BORDER CROSSINGS BORDER INFRASTRUCTURE BORDER TRADE BOTTLENECKS CHAMBERS OF COMMERCE COMMODITIES COMMODITY COMPARATIVE ADVANTAGE COMPARATIVE ADVANTAGES COMPETITIVENESS CONGESTION CONNECTIVITY CONSTANT ELASTICITY OF SUBSTITUTION CONSTANT RETURNS TO SCALE CONSUMERS CONSUMPTION SUBSIDIES COST ANALYSIS CROSS-BORDER ISSUE CROSS-BORDER TRANSACTIONS CUSTOMS CUSTOMS AUTHORITIES CUSTOMS OFFICIALS CUSTOMS PROCEDURES DEBT DEMOGRAPHIC DEVELOPING COUNTRIES DEVELOPMENT POLICY DIGITAL SIGNATURE DIVIDEND DIVIDENDS DOMESTIC ECONOMY DOMESTIC MARKET E-COMMERCE ECONOMIC COOPERATION ECONOMIC DEVELOPMENT ECONOMIC INTEGRATION ECONOMIC POLICY ECONOMIC RELATIONS ECONOMIC STRENGTH ECONOMIES OF SCALE ELASTICITIES ELASTICITY ELASTICITY OF SUBSTITUTION ELASTICITY VALUE EQUILIBRIUM EXPORT BASES EXPORT SECTORS EXPORT SHARE EXPORT SUBSIDIES EXPORTERS EXPORTS FACTORS OF PRODUCTION FINANCIAL CRISIS FINANCIAL INSTITUTIONS FORECASTS FOREIGN INVESTMENT FREE TRADE FREE TRADE AGREEMENT FUELS FUTURE RESEARCH GDP GENERAL EQUILIBRIUM GENERAL EQUILIBRIUM MODEL GLOBAL COMPUTABLE GENERAL EQUILIBRIUM GLOBAL INVESTMENT GLOBAL TRADE GLOBAL TRADE ANALYSIS GLOBALIZATION GRAVITY ESTIMATES GRAVITY MODEL GRAVITY MODEL APPROACH GRAVITY MODELS HARMONIZATION HIGH TARIFFS HIGHWAY IMPORT BANS IMPORT COSTS IMPORT DUTIES IMPORT PRICE IMPORT PRICES IMPORT TARIFF IMPORT TAXES IMPORTS IMPORTS OF TEXTILES INCOME LEVELS INCOME TAX INDUSTRIAL PRODUCTIVITY INDUSTRY TRADE INEFFICIENCY INFORMATION FLOWS INFORMATION SYSTEM INFRASTRUCTURE DEVELOPMENT INFRASTRUCTURE PROJECTS INTELLECTUAL PROPERTY INTERMEDIATE INPUTS INTERNATIONAL ECONOMICS INTERNATIONAL TRADE INTRAREGIONAL TRADE MARKET ACCESS MARKET SIZE METAL PRODUCTS MODE OF TRANSPORT MOST FAVORED NATION MOTOR VEHICLES NATURAL RESOURCES NEW MARKETS NEW PRODUCTS NON-TARIFF BARRIERS ONLINE BANKING OUTPUT OUTPUTS PAYMENT SYSTEMS PER CAPITA INCOME PER CAPITA INCOMES PERFECT COMPETITION PETROLEUM PRODUCTS PORT OF ENTRY PORTFOLIO POSITIVE EFFECTS PREFERENTIAL RATE PREFERENTIAL TRADE PREFERENTIAL TRADE AGREEMENTS PREFERENTIAL TREATMENT PRICE BANDS PRIMARY FACTORS PROTECTIONIST QUANTITATIVE RESTRICTIONS RAIL RAIL CROSSING RAIL NETWORKS RAIL TRAVEL RAILWAY RAILWAYS REAL GDP REGIONAL INTEGRATION REGIONAL TRANSPORT REGIONALISM REGULATORY SYSTEMS ROAD ROAD NETWORK ROUTE SAVINGS SOURCING STATE BANK TARIFF BARRIERS TARIFF CHANGES TARIFF DISPERSION TARIFF RATES TAX TAX REVENUES TECHNICAL BARRIERS TIRES TRADE AGREEMENT TRADE BALANCE TRADE CLASSIFICATION TRADE COOPERATION TRADE COSTS TRADE CREATION TRADE DEFICIT TRADE DIVERSION TRADE DIVERSION EFFECT TRADE FACILITATION TRADE FINANCE TRADE FLOWS TRADE IN GOODS TRADE LIBERALIZATION TRADE LOGISTICS TRADE PARTNERSHIP TRADE POLICIES TRADE PROMOTION TRADE REGIME TRADE REGIMES TRADE RELATION TRADE RELATIONS TRADE ROUTES TRADE SURPLUS TRAFFIC TRAINS TRAMWAY TRANSACTION COST TRANSACTION COSTS TRANSACTIONS COSTS TRANSIT TRANSIT TRADE TRANSPARENCY TRANSPORT TRANSPORT EQUIPMENT TRANSPORT FACILITATION TRANSPORT NETWORK TRANSPORTATION TRANSPORTATION COST TRANSPORTATION COSTS TRUCKS TRUE UNILATERAL LIBERALIZATION UTILITY FUNCTION VALUE ADDED VEHICLES VERTICAL INTEGRATION VOLUME OF TRADE WELFARE GAINS WELFARE IMPACTS WELFARE LOSS WTO ZERO PROFITS India and Pakistan, the two largest economies in South Asia, share a common border, culture and history. Despite the benefits of proximity, the two neighbors have barely traded with each other. In 2011, trade with Pakistan accounted for less than half a percent of India's total trade, whereas Pakistan's trade with India was 5.4 percent of its total trade. However, the recent thaw in India-Pakistan trade relations could signal a change. Pakistan has agreed to grant most favored nation status to India. India has already granted most favored nation status to Pakistan. What will be the gains from trade for the two countries? Will they be inclusive? Is most favored nation status a panacea? Should the granting of most favored nation status be accompanied by improvements in trade facilitation, infrastructure, connectivity, and logistics to reap the true benefits of trade and to promote shared prosperity? This paper attempts to answer these questions. It examines alternative scenarios on the gains from trade and it finds that what makes most favored nation status work is the trade facilitation that surrounds it. The results of the general equilibrium simulation indicate Pakistan's most favored nation status to India would generate larger benefits if it were supported by improved connectivity and trade facilitation measures. In other words, gains from trade would be small in the absence of improved connectivity and trade facilitation. The idea of trade facilitation is simple: implement measures to reduce the cost of trading across borders by improving infrastructure, institutions, services, policies, procedures, and market-oriented regulatory systems. The returns can be huge, even with modest resources and limited capacity. The dividends of trade facilitation can be shared by all. 2013-09-26T14:24:07Z 2013-09-26T14:24:07Z 2013-06 http://documents.worldbank.org/curated/en/2013/06/17857354/mfn-trade-mean-india-pakistan-can-mfn-panacea http://hdl.handle.net/10986/15844 English en_US Policy Research Working Paper;No. 6483 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research South Asia India Pakistan |