DHAKA, Oct 5: The trade negotiators of Saarc countries on Tuesday primarily agreed to evolve a generalized principle for rules of origin of various products to be traded under the framework of the South Asian Free Trade Area (Safta) , said official sources.

However, the committee of experts that began the three-day talks on Monday, here in Dhaka, is yet to fix the rate of value addition to be applicable for rules of origin. The issue might be settled tomorrow (Wednesday), the third and concluding day of the 5th round of expert-level talks on Safta.

India and Pakistan, two of the developing countries in the seven-nation forum, favoured allowing special benefit for their home-grown products in deciding rules of origin, a proposal which faced strong opposition from the four least developed countries (LDCs) within the group - Bangladesh, Nepal, Bhutan and the Maldives.

The meeting reached a compromised formula for making two lists of sensitive items one for the LDCs and the other for developing members in the South Asian Association for Regional Cooperation (Saarc) that also includes Sri Lanka.

Meeting sources said that officials of different countries held bilateral talks, though informally, to take stock of one another's negative lists. The issue of how to compensate the regional LDCs for customs losses they may incur during the free trade regime was also discussed.

The discussion on this issue is likely to continue in today's session. If it is not settled tomorrow, it may come up in the 6th round of talks scheduled in New Delhi in two months time, said meeting sources.

According to the compensation package, proposed by the LDCs earlier, a fund should be floated with 10 per cent contribution from the exports of the developing countries since they have been enjoying certain advantages for their higher capacity and strength in international trade.

In the current talks, wish lists given by the LDCs for trade-related technical assistance to them have been considered, although a concrete decision is yet to be taken.