February 14, 2006	Tuesday	Muharram 15, 1427

ISLAMABAD, Feb 13: The commerce ministry will give another presentation on Tuesday to the prime minister on the possible outcome of ratification of South Asia Free Trade Agreement (Safta) on the economy.

Informed sources told Dawn on Monday that Commerce Minister Humayun Akhtar Khan along with other senior officials would brief the premier on the pros and cons of the agreement before it was ratified.

The ministry had already given a briefing to the prime minister on the issue and after that it was taken up by the ministry to the last cabinet committee meeting but no decision could be taken on the matter.

According to these sources, the issue of Safta ratification among other would now be considered in the cabinet meeting on Wednesday.

The sources said that it was not clear to the trade wizards that whether the ratification would mean an automatic granting of MFN status to India or not.

It was an issue and it should be taken into consideration before ratifying the agreement, the sources added.

They said that the issue also came under discussion in the meeting of Prime Minister of Bangladesh Khaleda Zia with her Pakistani counterpart. The Bangladeshi premier was currently the chairperson of the Saarc.

Analysts said that in case Pakistan ratified the agreement then it might be linked with one of the immediate successful outcome of the visit of Bangladeshi premier to Islamabad.

Bangladesh had already ratified the agreement which would allow greater access to Bangladeshi products particularly in the Indian market.

Pakistan is currently trading 773 items on a positive list approach. Safta carries only sensitive lists, which means no preferential duty, but allows trade on all products.

The sources said that Pakistan had a potential of exporting around $2 billion to $3 billion of agriculture produce including dates, mangoes, citruses, kinno and rice.

There was a greater demand for these food items in the Indian market but they were placed in the sensitive list of India under the Safta agreement.

The sources said that India was providing subsidy in the shape of cheaper electricity, urea etc., to its farmers as against no subsidy to Pakistani farmers.

Moreover, according to the sources, India have a long list of non-tariff barriers in the shape of licensing requirements, certification and domestic taxes, which restricted entry of Pakistani products into that country.

The statistics showed that even with positive list approach and granting of MFN status, Pakistan trade with India could not increase in the way it should be, added the sources.