LAHORE, Jan 21: The fate of the South Asian Free Trade Agreement (Safta) is likely to be decided at the next federal cabinet meeting, Secretary Ismail Qureshi of the federal food, agriculture and livestock ministry says.
New Delhi had put 927 items while Islamabad identified 1,183 in the sensitive lists prepared by their respective officials in this regard, the secretary told journalists after a seminar here on Saturday.
Out of the items identified by India as sensitive, 284 were agriculture products, while Pakistan’s listed 137 such items. Citrus fruits and wheat had been put on the sensitive list by the both neighbours, while products like vegetables and eggs had not been in the category.
The non-sensitive items would be given a gradual duty exemption by 2012, and the step would also give access to Pakistani agriculture products to other Saarc countries.
Nepal and Bhutan had rectified the Safta, while India had approved it without formally sending instrument of ratification.
There had been great trade potential in the Saarc region which currently stood at only five per cent as compared to 65 per cent among the European Union members and 35 per cent among Asean countries.
Earlier, the secretary said in his keynote speech at the seminar on ‘Safta: impact on Pakistan’s agri-food sector’ that the trade balance would not be in favour of Pakistan after implementation of the agreement.
The agreement has no clause to grant the most favoured nation status to India, Mr Qureshi said at the seminar, organized by Punjab Agri-Marketing Company (Pamco) in collaboration with the Lahore University of Management Sciences (LUMS).
Giving an overview of the agreement, the secretary said Safta was likely to come into force this year, and the member states would reduce their tariffs through the trade libralization programme that would be implemented in two phases.
The tariffs would be reduced to 20 per cent by the developing countries, and by 30 per cent by the less developing states (LDCs) in the two-year first phase.
The tariffs would be reduced to 0-5 per cent by India and Pakistan in five years, Sri Lanka in six years and LDCs in eight years in the second phase.
India and Pakistan, Mr Qureshi said, would reduce their tariffs to 0-5 per cent for the LDCs in three years after coming into force of the agreement which would have clear impact on the economies of all countries.
Farmers Associates Pakistan president Shah Mahmood Qureshi said there had been no major investment in the agriculture sector.
“For the last 30 years, no big dam has been built. President Musharraf’s recent address to the nation, in fact, was an admission of failure to build big water reservoirs.
There has been no shift from subsistence to commercial farming.
Safta can be the first step towards economic union between India and Pakistan. Increase in trade may lead to resolution of core Kashmir issue,” he said.
Political and not the economic reasons were to be blamed for the low volume of Indo-Pakistan trade, said the FAP chief, who added there were several serious things which should be discussed extensively.
India’s agriculture sector, he said, got certain subsidies as nine per cent of total Indian budget was being spent for the purpose, while Pakistani farmers got nothing from the government.
He said the inclusion of Pakistani citrus and mangoes in the sensitive list was against the interest of the growers. The preparedness for Safta was also a vital factor and duty reduction would help facilitate trade but it would not guarantee that Pakistan’s interest would be taken care of, he added.
Pamco chief executive Mansoor Arifeen said the agri-marketing sector in the country lacked investment and trained manpower.