February 12, 2006	Sunday	Muharram 13, 1427

ISLAMABAD, Feb 11: Prime Minister of Bangladesh Khaleda Zia is likely to raise the issue of ratification of South Asian Free Trade Area (Safta) with her Pakistani counterpart during her 3-day official visit to Pakistan.

Informed sources told Dawn on Saturday that although the visit was of a bilateral nature but being chairperson of the Saarc the issue among others related to the trade would come under discussion.

Out of the seven Saarc member countries, India, Bangladesh, Nepal and Bhutan have already ratified the Safta agreement. Pakistan and Sri Lanka have yet to ratify it.

The sources said that the issue of the development package for the least developed countries (LDCs) adopted at Hong Kong Ministerial Conference would also come under discussion.

The ratification of agreement for Pakistan mean that it would convert the trade from positive list approach to the negative list. This means that currently Pakistan traded with India only in 773 products but the ratification would allow trade in all items excluding few items, which were either banned or restricted under the trade policy.

Under the agreement, Pakistan might increase its export to India but due to a large number of non-tariff barriers it would not be possible. Moreover, It would also not possible for Pakistan to increase its export to Bangladesh, Nepal and Bhutan as there was no road link with these countries.

The only apparent beneficiary of the agreement would be India, which was eagerly eying at a market of 140 million people in Pakistan.

Official statistics made available to Dawn showed that Pakistan’s trade with India turned into deficit and stood at $73.736 million in 1999-2000; $179.689m in 2000-01, $137.294 million in the fiscal 2001-02.

Pakistan’s trade deficit with India declined by 30 per cent to $95.845 million during the fiscal 2002-03 against $137.294 million in the year 2001-02.

This decrease in the volume of trade deficit with India had occurred due to the suspension of air, train and bus services in Dec 2001 that resulted in lower trade between the two countries. Pakistan’s trade deficit with India rose by 201pc to $288.687m during the fiscal 2003-04 against $95.845m in the previous year.