The Hindu, India

India to raise SAFTA issues in Dhaka

"Pakistan move goes against the very essence of the agreement"

By Amit Baruah

31 July 2006

DHAKA: India, which has called for an emergency meeting of the South Asian Free Trade Area (SAFTA) Ministerial Council, is expected to raise the issue of Pakistan backing away from its commitment under the multilateral agreement.

The issue of SAFTA’s implementation will be raised by India in the meetings of SAARC Foreign Secretaries here on July 31 and August 1, and Foreign Ministers on August 1 and 2.

Sensitive list

Under the SAFTA agreement signed by the seven South Asian countries in January 2004, Pakistan negotiated a "sensitive" list that would apply to India, but, inexplicably, has now ordered that trade would be governed by the existing bilateral arrangements.

Indian officials find the Pakistani position strange because both New Delhi and Islamabad were on the same side of the fence when it came to compensating the least developed countries for the losses they might suffer under the new arrangements.

Earlier this month, India pointed to a Pakistani notification, SRO no. 695(1) 2006 dated July 1, regarding tariff concessions for SAARC member countries. It stated that goods could be imported into Pakistan under the agreed SAFTA tariff concessions "subject to import policy order notified by the Ministry of Commerce."

"This last qualification refers to the import policy order of July 21, 2005, which limits SAFTA tariff concessions for India only to items on the existing bilateral positive list. We regard this action as against the very essence of SAFTA. SAFTA operates on the basis of agreed sensitive lists. SAFTA has little operational meaning if member countries do not honour their commitments in letter and in spirit," the External Affairs Ministry said.

Additional conditions

"The credibility of the participating member country and SAFTA itself will be seriously questioned if attempts are made to introduce additional conditionalities that were neither discussed nor agreed to when SAFTA was being negotiated. Any efforts to subject SAFTA to such conditionalities would be a derogation of the agreement," the Ministry added.

Since India believes that the Pakistani position goes against the letter and spirit of the agreement, New Delhi has asked for a meeting of the Ministerial Council, the highest decision-making body of SAFTA.

Comprising Commerce/Trade Ministers, the Council is responsible for both the administration and implementation of the agreement.

It is supposed to meet at least once a year and can also be convened more often - as and when considered necessary by the contracting States.