The Telegraph
Since 1st March, 1999
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US plays trade mediator

New Delhi, Nov. 7: Big Brother US is trying to accomplish what Indian and Pakistani leaders have not been able to do over the past half-century — get the two countries together to promote intra-region trade.

Keen to help protégé Afghanistan revive its economy and build a pipeline linking Afghan and Turkmen oil and gas fields with markets in India, the US is pushing for removal of intra-regional trade obstacles, including Pakistan’s refusal to give India access to land and air corridors for trade with Afghanistan. The US also feels it makes sense for Afghanistan to join the regional trading bloc, Saarc.

Under secretary of state for economic affairs Alan P. Larson, who arrived last night after talks with Afghan and Pakistani ministers, said: “We have been testing the waters on this idea (regional trade involving the three nations) and found the waters more pleasant than expected.”

Larson, who dangled a $1-billion debt write-off programme before Pakistan, has been striving in Islamabad to get India’s reluctant trading partner to resolve “obstacles in the way of intra-regional trade”.

He feels “there is now a strong realisation of mutual benefits” of regional trade there.

The move to boost regional trade in south Asia comes on the heels of China signing a free trade pact with Asean and proposing a giant free-trade zone involving it, Japan and South Korea.

Though he has not pushed the idea of Afghanistan joining Saarc, a regional trade bloc that has been a non-starter, Larson said he felt that “in the South Asian context, it made sense” for the Afghans to join in.

Refusing to describe himself as a broker in trade talks between the three neighbours, Larson said: “An expansion of regional trade is in everybody’s interest. We have been explaining concepts and checking out reactions.”

Till now, Islamabad has refused to let Indian vehicles or aircraft cross to Afghanistan through Pakistani land or airspace.

In fact, even an aid consignment of Indian wheat and biscuits sent on neutral vehicles was not allowed through. Islamabad has also refused the most-favoured nation status to its neighbour though it is committed to do so as a co-signatory to the World Trade Organisation’s compact.

The US under secretary also tested waters in Kabul and Islamabad for the proposed overland gas pipeline that will link fields in which US companies have interests with markets in India. “The pipeline issue came up... we are certainly interested in that,” Larson said.

Interestingly, he also took up the issue of energy security and diversification of energy supply sources in talks with top officials in the Prime Minister’s Office here today.

India has been looking towards diversifying its energy sources and has been in talks with Iran for transportation of Central Asian oil and gas through Iranian soil and then shipping it to India — a costlier, but safer, alternative.

Analysts say the US, as a matter of policy, wants to deny Iran the strategic advantage of controlling Central Asian and Afghan energy resources passing through pipelines on its territory to the only regional market for such goods, India.

Larson held discussions with finance minister Jaswant Singh and Dr Pradipto Ghosh, who heads the economic affairs cell in the Prime Minister’s Office, as part of a special dialogue with India on economy, focussing on trade and investment flows between the two countries, common stands on various WTO issues, especially agriculture, and on ways to cut off funds to terror outfits.

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