ISLAMABAD, May 8: The Saarc-member countries have agreed in principle that the initial indicative sensitive lists for negotiations among them will be around 20 per cent of the tariff lines at six-digit HS level with flexibility for least developing countries (LDCs) under South Asian Free Trade Area (SAFTA).

An agreement to the effect has already been signed among the member countries in January this year.

Official sources told Dawn on Saturday that the decision for the timely implementation of the treaty was taken in the second meeting of the committee of experts (COEs) on Safta held in Islamabad from May 5-7. The delegation from all member countries attended the meeting.

It was decided that the LDCs- Nepal, Maldives, Sri Lanka and Bangladesh - will have to submit long indicative lists and to seek derogation from sensitive lists of the non-LDCs - Pakistan and India. The sensitive list would include those items, which would not be considered for duty reduction under Safta to provide protection to the local industry.

According to the officials, the committee also decided that after negotiations, there would be two lists maintained as per decision of the special session of the committee on economic cooperation held in Islamabad in December 2003. It was also decided that the modalities for conducting negotiations on the sensitive lists might be discussed at its third meeting of COEs scheduled for Colombo on June 7-9, 2004.

In view of the revisions in the indicative maximum ceiling, the committee decided that the initial sensitive lists would be exchanged by the member states at its fourth meeting in Thimphu (Bhutan) on August 2-4, 2004. The committee also requested the Saarc-secretariat to ascertain from the ASEAN secretariat the details of the procedures followed by them with regard to negotiations of sensitive lists.

The committee also recommended that the consultant might be appointed at an early date to carry out a study for compensation of revenue loss for the LDCs. It was also decided that the final decision on the timeframe for the completion of the study would be taken by the secretary general while taking all aspects into consideration. It was agreed that the consultant would make a presentation on the interim report to the COEs and take into account its views in finalizing the report.

The committee decided that the rules of origin prepared by sub-group on Safta would be discussed by member countries in its third meeting. The third meeting of COE to be hosted by Sri Lanka on June 7-9, 2004; fourth by Bhutan on August 2-4, 2004.