Negative list of SAFTA comprises 53pc of total regional trade India’s tariff, non-tariff barriers restrict trade in South Asia

The News - International, Pakistan

Negative list of SAFTA comprises 53pc of total regional trade India’s tariff, non-tariff barriers restrict trade in South Asia

Trade and human development report

16 June 2010

By Mehtab Haider

ISLAMABAD: The negative list of South Asia Free Trade Agreement (SAFTA) comprises 53 per cent of the total trade between the regional countries, therefore, fully implementation on the agreement would not even yield the desired results, a senior official said on Tuesday.

“Total intra-regional trade stands at 5 per cent in South Asia out of $30 billion and surplus in trade is in favour of India. It is a fact that India has imposed tariff and non-tariff barriers to restrict trade with other regional states, especially with Pakistan,” said Dr Hafeez A. Pasha, Head of Economic Advisory Council (EAC) and renowned economist.

Addressing the launching ceremony of Mahbub-ul-Haq Human Development Centre report titled “Trade and human development”, he said the intra-regional trade in South Asia stands at $7 billion, out of which India is the only country, which is in surplus in trade with other countries, while all other countries, including Pakistan are facing deficit in trade ties.

He also revealed that the trade liberalisation policy initiated by him as commerce minister during 90s failed to meet Pakistan’s requirements because pre-mature liberalisation did not yet yield positive impacts on the economy.

In other regions such as ASEAN, he said that the intra-regional trade stood at 25 per cent among the regional states, but South Asia lagged far behind. He said that the lack of investment in human development, energy and structural bottlenecks resulted into restricting Pakistan’s ability to gain benefits despite liberalising its economy during the 90s.

“Pakistan’s 48 per cent population is facing food insecurity as per the capita consumption of wheat declined by 12 per cent,” he said.

Senate Chairman Farooq H. Naek said that the present coalition government has emphasised upon trade as an important tool for economic revival and put forward a coherent trade policy that aims to address structural and institutional weaknesses in this sector.

The intra-regional trade between Islamabad and New Delhi may bring prosperity in the lives of millions of people across the border as it would help create opportunities for new jobs and enhance income level that would surely reduce poverty, it said.

“As high as 55 per cent potential of the intra-regional trade remained untapped and more than $1.8 billion worth trade potential between the arch-rivals remained unutilised, which is over 80 per cent of the existing bilateral trade,” it said.

The report also said that the regional trade could directly affect South Asia’s human development through employment generation, enhancing income and contributing in poverty alleviation.

It suggested that the South Asian region lost the trade opportunities because of India-Pakistan hostility, similar exports basket and the presence of non-tariff trade barriers, particularly from the Indian side and infrastructure bottlenecks.

Pakistan’s one-third population lives below the poverty line, which is only second to Bangladesh in the region. Whereas, a large section of the population lives on $1.25 dollar a day, the report added.

Highlights

• Total intra-regional trade stands at 5pc in South Asia

• Surplus trade is in favour of India

• New Delhi imposes tariff and non-tariff barriers to restrict trade

• Intra-regional trade among ASEAN stands at 25pc

• Trade potential of $1.8bn between Pakistan & India remains unutilised

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