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ANAND SHARMA CALLS FOR INITIATING GREATER COOPERATION TOWARDS A FREE AND LIBERALISED TRADE REGIME IN SAFTA STATES FOURTH MEETING OF SAFTA MINISTERIAL COUNCIL HELD

Date : 28 Oct 2009
Location : New Delhi
 

Shri Anand Sharma, Union Minister of Commerce and Industry while lauding the rapid growth made in trade amongst the SAARC countries exhorted the member States to initiate greater cooperation in its movement towards a free and liberalized trade regime. He however mentioned that the Intra regional trade share in the case of South Asia in 2008 was of the order of 4.31 % as against 27.06 % for ASEAN and that one had only to see the rapid integration within ASEAN and its emergence as an important economic bloc in Asia to understand the opportunities that beckoned SAARC and the unutilized potential in the region.  The aim should be to create virtuous cycles of growth in the SAARC region, he added. The Indian Commerce and Industry Minister was speaking at the fourth Meeting of the SAFTA Ministerial Council that was held in Kathmandu today and was attended by the Commerce  Ministers of all eight countries  with the exception of Pakistan. The Ministerial  Meeting was preceded by the Meeting of the Expert Group on SAARC Agreement on Trade in Services(24-25th Oct 2009), Meeting of SAFTA Committee of Experts (COE) and the Meeting of the Sub Group on Non Tariff Measures(26-27th Oct 2009). 

Observing that the Ministerial was taking place in the backdrop of the world crisis wherein the leadership was being tested, Shri Sharma stated that this was different in a way as it had imploded from the heart of the capitalist World with different countries having been affected differently. “While some economies have shown clear signs of recovery, others are yet to recover. India's traditional destinations for export would have to show clear growth for the Indian exports to also show high levels of growth. With the demographics clearly shifting in favour of South Asia, SAARC Members would be failing in their duty to this region if they  are unable to follow a more coordinated and cooperative approach”, he added.  

The Ministerial considered the matters related to trade in services under SAFTA and noted with appreciation India’s unilateral removal of 264 tariff lines from its Sensitive Lists for the Least Developed Countries. The following major decisions were taken in the Ministerial and the other meetings on the sidelines:

 (i) A Tariff liberalization programme (TLP) was agreed to by the Member States under which the following was agreed  

a)    at the end of the ongoing TLP, tariff on 30% of the tariff lines outside the Sensitive Lists may be brought down to zero by all the Contracting States within a period of two years. (to be confirmed by member States by December 2009)

b)    Member states agreed to reduce their Sensitive Lists by [1]20% of the tariff lines from existing Sensitive Lists. Reduction in Sensitive Lists may be done keeping in mind that the goods have substantial trade coverage so that this initiative results in trade creation.  The phase out period for the tariff lines taken out of the Sensitive Lists would be as under.

Base Rate: Tariff As on September 2010

Date of Implementation: 1.1.2011 (for Nepal 01.8.2011)

[1] Bhutan would not be required to reduce its Sensitive Lists. However, it may appropriately accommodate some Requests from the Member States.

             In light of the priority accorded to services by all Contracting States, the SAFTA Agreement is to progressively cover liberalization of trade in services with broad-based and deeper coverage of majority of services sectors/sub-sectors with a view to fulfilling the objectives of Article V of GATS.   The Expert Group on SAARC Agreement on Trade in Services accordingly negotiated and cleaned the text of the Draft SAARC Agreement on Trade in Services. This Agreement shall provide real and effective market access to all Contracting States in an equitable manner. Negotiations for schedule of specific commitments shall take place in subsequent meetings keeping in view the national policy objectives, the level of development and the size of economies of Contracting States both overall and in individual sectors.  The Meeting also recommended that work on schedules should start before the Sixteenth SAARC Summit to be held in Bhutan in April 2010. 

            The Meeting agreed to commission studies to guide LDCs to explore niche export markets for the products of LDCs.    The Sixth Meeting of SAFTA Committee of Experts would be held in Maldives in May 2010. 

RJ