ISLAMABAD: In order to protect the local industry from any adverse impact of the South Asian Free Trade Area (Safta) agreement, the government has decided to prepare a negative list that will restrict imports of items likely to damage the interest of local industry.
Commerce Secretary Kamal Afsar told Dawn on Saturday that negative list, also called the sensitive list, would be finalized after due consultation with all relevant stakeholders.
"We have two years for finalizing the sensitive lists. We are not in a hurry as Safta is to be implemented on January 1, 2006. We will discuss each and every item with the stakeholders concerned. We have asked all the chambers to constitute sectoral committees to work out all the items to be considered for putting in the sensitive lists," he said.
Joint Secretary, Foreign Trade, Ministry of Commerce, Zafar Qadir, who recently attended the first meeting of Committee of Experts (CoE) in Katmandu, told Dawn that the second meeting of the committee of seven Saarc countries would be held at Islamabad in May this year to negotiate the pending issues in Safta.
He said that in the proposed meeting scheduled for May 3-5, the CoE would discuss Safta rules of origin, sensitive lists, technical assistance to the least developed countries (LDCs) and mechanism for compensation of revenue loss for the LDCs.
Elaborating Pakistan's preparation for the forthcoming meeting, Mr Qadir said that the ministry of food, agriculture and livestock, the industry and production, the Central Board of Revenue, the Export Promotion Bureau and the Federation of Pakistan Chambers of Commerce and Industry were preparing their own sensitive lists for consideration under Safta.
In reply to a question, he said that there was no timeframe for finalizing the list because it was a lengthy process and would take a lot of time for finalizing it. He said all the items would be discussed with the stakeholders before considering for duty reduction.
Following the receipt of lists from these organizations, they would be consolidated, assessed and examined for the rationale to be placed in the sensitive lists. After high-level consultations, the recommendations will be sent to the cabinet for approval. Upon the approval, the lists would be shared with Saarc member countries, he added.
Answering a question, Mr Qadir said that negotiations would go on as long as a consensus was not developed among member countries on placing items under the sensitive lists.
During the first meeting, he said, the member countries agreed to bring their customs experts to the next CoE meeting, who would work specifically on the rules of the origin.
He further said the LDCs had also been asked to work out and indicate their genuine needs during the forthcoming meeting of the CoE, which would be discussed and negotiated at length. Similarly, developing countries - Pakistan and India - have agreed to provide technical assistance to the LDCs in implementation of the Safta agreement.
The LDCs apprehend significant revenue loss as a result of reducing their tariffs and liberalizing their trade. They have demanded that Safta should provide compensation for the revenue loss that would occur during the trade liberalization process.
Mr Qadir said since this was a new idea, there was a dire need of much deeper consultation and excessive academic, intellectual and professional input required on assessing the extent of loss being caused to individual countries, specially the LDCs by trade liberalization, he said.
Since the member states do not follow a single harmonized code for classifying their products and there is no uniformity in their import and export documentation, Mr Qadir said, there would be a lot of complications in making such assessment of laws and suggest the extent of compensation thereof.- M.Z.K