ISLAMABAD, June 27: The South Asian Association for Regional Cooperation (Saarc) is likely to miss the deadline to finalize negotiations in the four areas for implementation of the South Asia Free Trade Area (Safta) accord from January 1, 2006. Informed sources told Dawn on Monday that the Committee on Experts (CoE) on Safta –- a technical team of Saarc member countries entrusted with the task to complete negotiations in eight rounds by the end of May 2005.

The sources said that in the eighth meeting held in Nepal last month, the CoE failed to make any headway, particularly on the issue of rules of the origin and revenue compensation mechanism — a unique facility pledged for the least developed members.

The agreement on Safta was signed at the 12th Saarc summit on January 6, 2004 in Islamabad and was to be implemented on January 1, 2006.

At that time, the experts’ body was entrusted with the task of completing negotiations on the following four outstanding issues: Sensitive lists of products that would be temporarily exempted from deduction in customs tariffs to be applied across the board for all other products; rules of origin specifying the conditions that would have to be met by products to qualify for application of reduced customs tariffs on export to another Saarc member state; revenue loss compensation mechanism for the least developed states (Bangladesh, Bhutan, Maldives and Nepal) in the event of revenue loss resulting from lowering of customs tariffs in terms of the agreement; and technical assistance to the least developed states.

The sources pointed out that the technical team has sought additional rounds of meeting to develop consensus in the four unresolved issues. The ninth meeting of the CoE was expected to be held in Nepal next month for completing bilateral talks and finalizing the sensitive lists, they added.

However, the sources said, member countries had come up with their independent proposals regarding the value addition in products to qualify for reduced customs tariffs on export to another member state, which was not likely to be resolved at the earliest.

The sources said Maldives, Nepal and Bangladesh had demanded a lower value addition in products for export as compared to Pakistan, India and Sri Lanka that have a higher demand of value addition in products.

Moreover, the sources said that those Saarc countries which were members of the WTO were mostly busy in the preparation for the forthcoming WTO ministerial conference to be held in December. This issue might also delay the implementation of Safta within due date, added the sources.