ISLAMABAD, Jan 1: Pakistan on Sunday denied it was responsible for the delay in the enforcement of the South Asia Free Trade Agreement. A statement issued by the Ministry of Commerce quoted a number of procedural obstacles beyond its control, including formation of a new government in Sri Lanka, for the delay in the implementation of Safta from Jan 1 to July 1, 2006.

The ministry’s statement termed Pakistan’s role proactive in resolving differences among Saarc countries during the technical level negotiations. It said Pakistan’s endeavours had been crucial for the finalization of the agreement on Nov 29 meetings at Kathmandu.

The Saarc Agreement has four annexes i.e. the list of sensitive items; rules of origin; technical assistance to least-developed countries of Saarc and a revenue compensation mechanism for these countries.

It was decided with consensus that the first tariff reduction would be undertaken by all member countries from July 1. Nepal, however, would do so in August. The revenue compensation mechanism would be available not before July 1, 2007.

Before July, only the annexure related to technical assistance to LDCs could become operational.

The Safta Agreement, it said, clearly provided that the Saarc Secretariat should notify the coming into effect of the agreement once the instrument of ratification was deposited by all Saarc members. Sri Lanka, it said, was not able to ratify the agreement immediately.

The ministry’s statement said even if Pakistan had deposited the instrument on Dec 31, the agreement would not have become effective. In any case, trade under Safta on preferential tariff would not begin before July 1.

The agreement’s ratification, it said, was being processed in accordance with the constitutional and procedural requirements of Pakistan. The process would be completed in a few days and subsequently the instrument of ratification would be deposited with the Saarc Secretariat.

The statement also dispelled the impression created by some news items that India had announced a five per cent tariff reduction effective from Jan 1. Even if this was a factually correct report, the Safta Agreement did not provide for such reductions, it said. As stated earlier, the first tariff reductions under Safta Agreement would take place on July 1, the statement said.

The impression that Pakistan-India trade relations had a direct bearing on “our ratification of the Safta Agreement is baseless”.

“Safta is a regional agreement and does not address bilateral issues between any Saarc (member) countries. The operation of the sensitive list has also been misconstrued. The factual position is that the sensitive list is that list of products where there shall be no reductions in tariff. It has got nothing to do with the importability of any product. Besides, as decided with consensus by Saarc countries, this list will under go further changes before it is put into operation with effect from July 1.”

“Safta Agreement and its annexes have been negotiated by Pakistan with active consultations of all domestic stakeholders. The government has taken all possible precautions to protect the interests of our domestic industry and trade. The national laws of Pakistan will hold ground unless these are amended in the legislative process.

“Pakistan is committed to the Saarc process which includes regional growth and alleviation of poverty, and has always honoured its international commitments.”