UNI, 16 February 2006

Pakistan ratifies SAFTA - But no free trade with India

Islamabad, Feb 16: Pakistan has ratified the much-trumpeted South Asia Free Trade Agreement (Safta), but trade between India and Pakistan will not be initiated under this agreement, instead it will continue under the existing import regime.

“We will not allow import of Indian items under Safta, as Pakistan will continue to have limited bilateral trade with India under existing arrangements,’’ a news report quoted sources as saying after a meeting of the federal cabinet which approved the agreement with Pakistan Prime Minister Shaukat Aziz in the chair.

“Unless and until there is visible progress on political issues between the two countries including the Kashmir issue, Pakistan cannot initiate open trade with India. Both the countries are holding composite dialogue to solve the political issues, which are the main hindrance in the way of open trade’’.

“Full implementation of Safta among Saarc countries means trade with India is open which is impossible prior to progress on the Kashmir issue,’’ the sources said.

The three options facing the Aziz cabinet were, not to ratify the Safta draft, which is quite difficult, as it will bring bad name to Pakistan, to ratify Safta, which means the MFN status under Safta to India, and New Delhi will export its items to Pakistan subject to Safta’s positive list, not subject to existing import regime vis-a-vis India, Pakistan to will deal with Safta and importable items list from India separately.

The government ratified the Safta keeping in view the third proposal under which Pakistan will deal Safta and importable items list from India separately. (UNI)