Free trade key to poverty reduction: Roundtable on Safta
By Our Reporter
LAHORE, April 28: Federal Industries and Production Minister Liaqat Ali Jatoi has stressed the need for removal of barriers and bottlenecks in the implementation of the South Asia Free Trade Agreement (Safta).
Inaugurating a one-day roundtable on "Safta: Agenda for Trade Liberalization," convened by the Saarc Chamber of Commerce and Industry (SCCI) here on Wednesday, the minister said that Safta should be implemented in good spirit on the pattern of the European Union plan. He said that the signing of agreement would prove to be an exercise in futility if it was not implemented.
He said that the Pakistan supported regional cooperation and liberal trade with an open mind and its entrepreneurs had the capability to compete in the international market with their better quality goods. All other Saarc members, too, had a positive attitude towards Safta. He saw no reason why the agreement could not be implemented.
He said that increased regional cooperation and trade liberalization were necessary for addressing problems like poverty alleviation and unemployment through the development of the small and medium enterprises. The government had adopted a positive outlook towards Safta and was of the view that all controversial issues could be resolved through negotiations.
The minister said that the government favoured more liberal visa policy with India and a positive attitude towards issues like negative list for imports. He said that a "Made-in Pakistan" exhibition comprising 70 stalls had been held at New Delhi with the help of the Indian government and another was being held at Bangalore. A similar exhibition by India would be held in Lahore in September.
SCCI president Macky Hashim said that implementation of Safta from January 2006 would start the process of elimination of tariffs, para-tariffs and non-tariff restrictions on the movement of goods in the Saarc region under the trade liberalization programme.
He said that Safta required an annual tariff reduction on the basis of margin of preference of 5 per cent for the least developed countries on the basis of actual rates for two years.
The tariffs were required to be cut to 0.5 per cent within three years of the agreement coming into effect from January 2006. The agreement also provided for sensitive lists of products to be excluded from the trade liberalization programme. Saarc share in world trade was expected to increase from 4 per cent to 15 to 20 per cent following the implementation of Safta.
Federation of Pakistan Chambers of Commerce and Industry vice-president Sheikh Maqbool Ahmed said Saarc countries with over 250 million young labour force and 40 per cent of the regional population were not among the 125 countries of the world in terms of human resource development.
Regional trade between the European Union countries was 67 per cent, 26 per cent between Asean countries and less than 4 per cent among Saarc countries which was less than 1 per cent of world trade.
He said that Safta Committee of Experts was to take up vital issues like the rule of origin, mechanism for least developing countries and sensitive list of products at its forthcoming meeting.
The committee comprising members from all member states should have representatives from private sector as well because it was the major stakeholder in the trade liberalization process.
He suggested constitution of joint committee for developing a consensus on issues likely to impede Safta and WTO implementation. Ministry of Foreign Affairs Economic Affairs Coordination Director Dr Asad Majeed Khan said that the trade liberalization programme was the heart of Safta.
It covered all the items except those identified by each state in the sensitive list. Safta Ministerial Council would be constituted to monitor the implementation of the agreement.
Speaking on non-tariff barriers and dispute settlement Dr Ram Opendra Das of India said that liberalization would increase formal trade and minimize the informal trade.
Dr Dushni Weerakoon of Sri Lanka said that bilateral trade agreements between Saarc countries, sensitive lists and rules of origin provisions were likely to prove the major stumbling blocs in the implementation of Safta. The roundtable concluded without formulating any recommendations for trade liberalization under Safta.
