KARACHI, Feb 7: Pakistan should ratify Safta at the earliest in order to be able to claim its share in dividends of closer economic relations in the South Asian region. Pakistan is in no position to use settlement of trade issues as a leverage point to pressurize India for an early settlement of the Kashmir issue. Tensions between Pakistan and India have kept the growth potential of the region hostage for long. And the implementation of the South Asia Free Trade Agreement (Safta) is beneficial for all the member countries, particularly the smaller economies.

These views were expressed by former vice-president of World Bank and former finance minister of Pakistan, Shahid Javed Burki while addressing an interactive seminar on “Safta: Opportunities and Challenges” as chief guest here on Monday. The seminar was organized by the Pakistan India CEOs Business Forum.

Mr Burki feels that fears that India will gobble the economies of smaller Saarc nations are misplaced. He said: “There is empirical evidence to prove just the opposite. The free trade area arrangements in Africa and Latin America are the example where smaller economies have benefited more than the larger ones.”

“We should not hesitate in becoming an active member of Safta, as it is important not just for our country but also for other smaller countries,” Mr Burki pointed out.

He said Safta should not only concentrate on merchandise trade but it should also take into account flow of services and flow of people, trade facilitation, infrastructure development, sorting out issues related to non-tariff barriers, identifying and benefiting from complementarity of regional economies.

He called upon the business community to get actively involved in the process that would lead up to the creation of Safta because it would directly benefit them.

Mr Burki expressed fears that an endless delay in Safta implementation could isolate Pakistan regionally, as there are number of economic groupings in which Pakistan had not been included. “India is very aggressively pursuing its interests in the region,” he said.

In reply to a question regarding the issues related to an uneven playing field, especially with reference to India where there are many times more subsidies, highly decentralized state structures complicating finalization of economic deals beside other differences, Mr Burki said that all these concerns could be more effectively tackled once Safta was implemented. “There will be forum to take up all such trade related issues and address them in more cordial environment,” he said.

Responding to another question, he said that it was India that severed economic relations with Pakistan to weaken it. Sixty years later it would be unrealistic to expect India to act unilaterally for the benefit of Pakistan and open its borders for Pakistani products. “All economic factors weigh heavily in favour of the implementation of Safta from Pakistan’s perspective,” he concluded.

Economist and expert on trade facilitation James Robertson said there were a great number of issues to be addressed in the process leading to the creation of Safta. He underscored the need for a monitoring and responsive mechanism that could address these issues in days and not in months or years.

Mr Robertson also emphasized upon direct involvement of the business community in the process. He said unless an ambitious approach was adopted, Safta might not deliver to its full potential.

Federal Deputy Secretary of Commerce, Waqar Ahmed Shah informed the participants that Safta would come into force from July 1, 2006 after its ratification by Pakistan and Sri Lanka. He told the gathering that Safta was to take effect from January 1, 2006 but was delayed on the request of Sri Lanka that needed some more time to ratify it. He said Pakistan was ready to sign the treaty.

Mr Waqar Ahmed said that Pakistan actively participated in meetings of the committee of experts that met 12 times over the last two years after signing of the agreement in Islamabad in January 2004. “There is an agreement on broader framework but details have still to be worked out. The progress is relatively slow when the effort is to make the process inclusive and move with full consensus of all participants.”

He said negotiations though a difficult process but meetings had been very productive and partners had been understanding and helpful.