Monday, December 19, 2011

International Marriages Of Convenience: "Most-Favored Nation" Trade Status

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Better than an armed conflict, but less than a ribbon-cutting. -DC

We've heard all of the cynical expressions before in reference to many types of scenarios... "Politics makes for strange bedfellows"..."I keep my friends close but my enemies closer"... "The enemy of my enemy is my friend"..."If you can't beat 'em, then join 'em." All are said haplessly. Each refers to a one-sided convenience or protection. There is a wonderful example - a genuine case-in-point to found in the recent one-sided warming of relations between Pakistan (the olive branch presenter) and India (barely noticing the branch, and too busy building its promising future). Yet, despite the skepticism surrounding the gesture, the outcome may prove to be positive in a number of ways for a number of parties.

Situational Analysis:

Pakistan, in an act of extreme, rapidly-growing desperation and insecurity, has opened its doors to free and open trade with India, its long-time nemesis, and has granted India "most Favored Nation" trading status.

Could it be that this sudden outpouring of friendly spirit might have been motivated by any of the following circumstances?

  • India's economy is thriving, its allies and trade agreements multiplying, while Pakistan is in a state of economic decline, accelerated by a slowdown in the influx of funds from the United States;
  • India is a nuclear superpower, but has been non-aggressive in its approach to military sabre rattling. Pakistan needs power, and it would be logistically advantageous to purchase it from neighboring India;
  • Pakistan has lost considerable support and credibility with the United States after Osama Bin Laden was found living in an enormous and conspicuous compound inside of Pakistan. Fueling this issue, a number of Pakistanis who cooperated with US Navy Seals in the raid on Bin Laden have been prosecuted by the Pakistani government. India, in the meanwhile, enjoys a good relationship with the United States.

Potential Consequences And Opportunities:

  • Pakistan might be able to stimulate its economy by trading, however small at first, with India;
  • Pakistan might be able to improve its political and social standing with both the United States and the United Nations by this gesture, if it withstands ethnic tensions and tests;
  • India might be a triangular trade partner for nations which are hesitant to do do business directly with Pakistan and any of its ideological allies. This is a situation which is roughly analogous to Americans who purchase Cuban cigars via Canada.

This presents an interesting potential opportunity, in theory at present, for expanded international trade and economic stimulus to Pakistan and its surrounding countries, many of which are economically destitute and politically unstable -- but it also might be a way, by accidental diplomatic proxy (i.e., via India), for some nations to trade with other nations with whom they are either restricted from direct trade, or with whom overt trading would prove "politically embarrassing" at this time.

We'll have to wait and see.

Douglas E. Castle for The Internationalist Page 



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