ISLAMABAD, Nov 11: The Saarc-member countries have agreed to scale down the tariffs between five to zero per cent in two phases under South Asia Free Trade Area (Safta) treaty to allow free trade among the member countries.

Official sources told Dawn that the decision was taken during a meeting of the committee of experts of the member countries held in Kathmandu recently.

Elaborating further the proposed agenda of the agreement, the officials said that the trade liberalization would take place in two phases.

According to these officials, the draft agreement would be finalized by the experts of the Saarc member countries in December 2003, which would be subsequently approved by the Saarc- summit scheduled to be held at Islamabad in January 2004.

The officials said in the first phase, which is expected to complete within a period of two years, Pakistan and India would reduce their customs duty to 20 per cent on all items, while the least developed countries (LDCs) would take a period of three year to scale down the tariff to 30 per cent.

In the second phase, the officials said the developing countries (Pakistan and India) would reduce the tariff between five to zero per cent in the next five years, while the same would be carried out by the LDCs in a period of seven years.

According to the officials, during the period the member countries would also prepare its negative lists of items, which would not be considered for concessions with a view to protecting their local industries. Special rules for compensating revenue loss of the LDCs would also be worked out, officials added.

The committee of experts under Saarc had already held five rounds of talks to work out measures and modalities for concluding the Safta.

According to the officials, the 6th meeting of committee of experts will be held on Safta at Kathmandu scheduled for November 29 to December 1, 2003.

With the signing of the Safta treaty, India would get maximum advantage even more than that which is available under MFN status, officials said.

According to officials, for Pakistan, the biggest benefit would be the access to high yield technologies for all crops and to the process technology of

India.

Pakistan’s major regional trade partner in 2002-03 was India, followed by Bangladesh and Sri Lanka, while the other partners remained at a very low level.