Should India withdraw MFN status from Pakistan?
Q. India is set to withdraw MFN status to which country?- Published on 29 Sep 16a. Pakistan
b. Afghanistan
c. Bangladesh
d. China
ANSWER: Pakistan
As per the MFN principle of the WTO General Agreement on Tariffs and Trade for which India is a signatory or contracting party, WTO said all members should treat others as MFN trading partners.
MFN status was accorded to Pakistan in 1996 as per India’s commitment to WTO.
- Pakistan did not reciprocate citing non-tariff barriers and huge trade imbalance
- PM Modi called for a meeting to review MFN status to Pakistan
- Currently , the level of bilateral trade is “very low” - representing a mere 0.4 percent of India’s overall goods trade worth USD 643.3 billion in 2015-2016.
- India could consider making use of a ‘security exception’ clause - Article 21(b)(iii) - in the GATT to deny the MFN status to Pakistan or bring in certain trade restrictions.
- However, there have been Article 21 disputes in the past between Czechoslovak (Socialist Republic) and the U.S. (1949); the U.S. and Nicaragua (1983 and 1985) and between the European Communities and former Yugoslavia (1992).
