Re: Consequences of Free Trade with India
I don't know if you want to discuss this more from a political issue or economic issue.
I'll just focus on economics for now. Any time, any small(er) country opens trading with a much larger trading partner, there are many economic risks. "Dumping" is a known economic activity, where the larger country can initially afford to put their products at very low price (called "dumping") to wipe out local competition. And once the competition is gone, they can charge higher prices to recoup the losses. In many cases, the larger entity can make cheaper products just by economies of scale.
This puts the governments in a quandry. They can either put the interests of the customers first, since customers are getting cheap stuff. Or they can look out for their own manufacturing. Because, the downside is that this will wipe out (in an extreme case) local manufacturing, whereby your potential customer is actually going to be unemployed, creating more social and economical problems for the government and for the society. Therefore, historically, most governments took a very dim view of "dumping" and had laws to prevent it, in the form of quotas and what not. However, this goes against the principles of capitalism, so WTO is a way to end all these barriers. Its not just India, but Pakistan should get ready for all items from all places which makes them in the most cost-efficient manner.. may it be China, may it be Korea, or whatever.
This is not something limited to Pakistan either. United States is facing the same problem, where they have a huge trade imbalance with China. Although there are many other dynamics involved, suffice is to say, this is a fine line governments have to walk, and there are no easy answers either.