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| Kathmandu, Tuesday December 24, 2002 Paush 09, 2059. |
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SAFTA treaty framework likely
to be delayed
By Milan Mani Sharma
KATHMANDU, Dec 23:Even as the deadline to
finalise South Asia Free Trade Area (SAFTA) Draft Treaty Framework is on the verge of
maturation, seven South Asian countries are yet to agree on approaches and timeframe for
slashing tariff and non-tariff barriers, thereby leaving the fate of draft treaty
framework hanging in mid-air.
People knowledgeable to the matter opined that
the deadline of its finalisation would be missed for the second time as well. The deadline
for finalising the draft treaty matures on December 31, 2002, the date fixed by the 11th
South Asian Association for Regional Cooperation (SAARC) summit held in Kathmandu earlier
this year. Earlier the deadline was set for December 2001, which was also not met.
"With just a week left for the year to end
and another round of Committee of Experts (CoE) meeting yet to be held, the finalisation
of the SAFTA framework within the deadline is impossible," said Padma Jyoti,
President of SAARC Chambers of Commerce and Industry talking to The Kathmandu Post.
Although, the SAARC Secretariat has scheduled to
hold the fourth meeting of CoE from 27 to 29 December to give the final shape to the
preliminary draft that it developed in 2000, members of Nepali delegation at CoE rule out
the possibility of meeting the deadline.
"As the member countries still differ in
views on major components of the draft and issues related with trade facilitation
measures, resolving differences over sensitive trade issues in the three-day meeting is
most unlikely," said a Nepali official preferring to be unnamed.
The fourth CoE meeting needs to settle matters
like reduction and gradual revocation of tariff and non-tariff barriers, technical
assistance and flexibility to SAARC least developed members allowing them to enlist higher
number of ‘negative products’ to finalise the SAFTA framework.
"Moreover, it needs to agree upon and
thrash out an appropriate revenue compensatory mechanism, an issue that has been strongly
raised by Bangladesh and supported by Nepal as customs is the major source of revenue in
the country," said the official.
Also, demand of the least developed members to
provide them facilities on ‘rules of origin’ and ‘tariff reduction on
non-reciprocal basis’, which drew varying opinion from other member states, is
expected to consume much of the time of the fourth CoE. "This is likely to extend
negotiation process," he said.
Issues like tariff and non-tariff reduction
approach and transition period would also take lengthy time before these are agreed upon,
viewed experts, indicating of growing differences among the member states on the matter.
"The differences among the members is
paramount," said the official, adding that Bangladeshi delegation had even tabled a
separate SAFTA draft treaty framework in the last meeting after serious differences
surfaced between developing and least developed SAARC countries.
Nonetheless, the meeting discussed the
Bangladeshi draft at length and decided to incorporate some of its provisions in the main
draft. It also finalised 10 articles out of the total 25 articles of the preliminary
draft. The CoE has already discussed the preliminary draft twice this year, but without
definitive achievement.
Meanwhile, few member states even opine that the
SAFTA draft treaty framework should be finalised only after a detail study on implications
of free trade area to member countries is carried out, informed the official.
The SAARC secretariat has recently appointed Sri
Lanka-based Institute for Policy Studies (IPS) to study "Implication to SAARC
countries: Transformation to SAFTA from SAPTA" and it has been asked to submit the
final report by March 2003.
Although, officials knowledgeable to the matter
said that the secretariat has asked IPS to submit an interim report during the fourth CoE
meeting to deal with this possible impasse, experts doubt over the potentiality of such
report produced in haste.
The SAARC secretariat should not haste the SAFTA
framework draft process, as it would largely determine the economic fate of the entire
region, they said. "The framework of the free trade area should be delineated
carefully given the socio-economic and political condition of the region," expert
said.
Even Yadav Kant Silwal, former General Secretary
of SAARC, speaking at a programme today stressed that the regional trading provisions
should be mutually beneficial and equitable.
Nevertheless, Jyoti said that just going through
the motion is not enough if the SAFTA framework is to be developed soon. "Drive and
motivation should go from top to bottom," he said referring to the slackened SAARC
process affected by weak commitment and escalating bilateral differences among the member
states.
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