DHAKA, Feb 8: Smaller economies in the South Asian Free Trade Area (Safta) should try to persuade India to eliminate the negative list of items that are kept out of trading under the regional bloc, a regional seminar was told on Wednesday.

Organized by the Bangladesh Enterprise Institute, the seminar called for striking a framework agreement to remove all barriers to trade, including those not relating to tariff, and make operational Safta, which had theoretically come into effect on January 1, 2006 after its signing during the Islamabad summit of Saarc in 2004.

Pakistan’s former finance minister Shahid Javed Burki told the seminar on “Safta: opportunities and challenges” that India should show magnanimity in dealing with weaker economies and remove non-tariff barriers to trade that used to make the latter scared of its huge economy.

Referring to his recent talks with Indian Prime Minister Manmohan Singh, Mr Burki, also a former World Bank vice-president, mentioned that New Delhi’s current regime would try to change the mindset of the bureaucracy to come up with some proactive measures. He also criticized Pakistan for hesitating in wholeheartedly joining the Safta process.

The Pakistani economist said India had a lot of capital for cross-border investment and further identified a number of areas of regional cooperation — agriculture, textiles, energy, transit and movement of people.

Terming the negative list a nonsensical exercise, Bangladesh’s noted economist Rehman Sobhan blamed a ‘mafia in bureaucracy’ for playing hide-and-seek in the negotiation process for removing the barriers to free trade.

The commerce secretary of Bangladesh, Abdul Karim, once again described non-tariff barriers as a problem that had been affecting interests of the least developed countries like Bangladesh which had a narrow export base. He, however, expressed the hope that the Safta process would address these issues.

The seminar also proposed signing of a memorandum of understanding between Bangladesh and India to harmonize the standard testing for removing non-tariff barriers as well as a common standard for all countries of the South Asian Association for Regional Cooperation.

Professor Mustafizur Rahman of the Centre for Policy Dialogue said the ‘too long’ negative list went against the spirit of free trade and insisted that a framework agreement was required to address issues such as non-tariff barriers.

Professor Ali Rashid of the North South University said that the least developed countries’ efforts to liberalize their economies would be slowed down if there was compensation mechanism to overcome their revenue losses.

Zaidi Sattar, a World Bank economist, termed Bangladesh’s import policy ‘too cumbersome’ which, according to him, obstructed diversification of exports of the country.

Rubina Toufiq Shah, commercial secretary of the Pakistan High Commission in Dhaka, proposed a road transit between Bangladesh and Pakistan through Indian territory under the Safta process to facilitate regional and bilateral trade.