Differences impede reduction of SAFTA sensitive list

KATHMANDU, June 20:

A crucial meeting of Working Group of eight South Asian countries, which was supposed to slash the existing long list of sensitive items - on which they have refused to trade at zero tariffs, ended Tuesday without any headway.

The meeting ended inconclusively after the members of South Asian Association for Regional Cooperation (SAARC) remained divided over the modality for downsizing the list. 

“India, Pakistan, Bhutan and the Maldives wanted all the members to downsize the items in sensitive list to just 100 products. We could not agree to it,” one of the officials, who participated in the meeting, told Republica.

Contrary to their proposal, officials from other SAARC countries, including Bangladesh, Afghanistan and Sri Lanka, proposed that the list be gradually reduced by 30 percent over the span of next 5 years. Nepal that opposed the former modality, however, maintained its silence on the latter proposal as well. 

“We did not express commitment of any sort because we are still to implement the previous commitments on tariff liberalization,” said the source.

The eight-member bloc of SAARC had agreed to trade under free trade agreement in 2004, and enforced the SAFTA regime in 2006, eying to create jobs and reduce poverty through trade integration.

However, the intra-regional trade has not yet made significant headway largely due to the long sensitive list. Presently, the sensitive list has as much as 20 percent of total regional tradable items. Worse is that each member countries have largely included items of others exports interest in the list.

Realizing this constraint, the SAARC leaders during the last Summit asked the Working Group to further downsize the items in the sensitive list so that the members in the region could trade more freely and meaningfully. The meeting in Kathmandu was held as a part of this negotiation. 

“Around 3 to 4 modalities for further reduction of sensitive list were tabled during the meeting. But nothing concrete could be decided,” said Naindra Prasad Upadhaya, joint secretary at the Ministry of Commerce and Supply (MoCS). 

Given the difference and failure to come up with any concrete plan for further reduction of sensitive list, the Working Group on Reduction of Sensitive List (WGRSL) ended the meeting, deciding to meet again in September. 

Officials said all the SAARC members have expressed commitments to further open up their markets. “Hopefully, we will reach to some conclusion when we discuss on the new proposals in the next meeting,” said the official.

As for the separate meeting on South Asia Trade in Services (SATIS), which began on Tuesday, officials said member countries are still negotiating and proposing sectors that they will open for service trade. 

“Negotiations are still on in very basic issues,” Upadhaya made a very short comment.

Source: Republica