Islamabad, Oct 14 (IANS): Pakistan's decision to grant Most Favoured Nation (MFN) status to India will help improve trade ties, said a daily Friday.

Pakistan has, in principle, decided to grant MFN status to India.

The News International editorially described it as an "important step in improving trade ties between the two countries".

India has granted MFN status to Pakistan and has also dropped its objection to Pakistan's request for market access to the European Union at the WTO.

"Both steps will help create the environment for Pakistan and India to begin to explore new avenues for bilateral trade while overcoming the thorny issues that dominate mainstream discourse," the editorial said.

The editorial exhorted Islamabad and New Delhi "to focus on identified doables including moving to a negative list approach in tariff lines".

It said that during recent talks, "an effort has been made to create institutional mechanisms and prepare a road map to make the peace process irreversible and structured and create an enabling environment for bilateral trade".

"Other proposals such as the trade of electricity and petroleum products between the two countries are also under discussion and one hopes that the feasibility, scope and modalities of such trading will be seriously considered," it added.

The editorial went on to say that with the granting of MFN status, "India and Pakistan entering into a mutually agreed preferential trade arrangement to promote trade by extending tariff concessions on products of export interest to both countries has become a real possibility".

"Up until now, India's contention was that Pakistan should first honour its existing international commitments like granting MFN status to India as per the agreement on South Asian Free Trade Area before exploring new trading regimes. Now that we may be about to cross this bridge, we can look ahead to greater cooperation on trade, which can certainly help lay the groundwork for movement on the more tricky issues."