While agreeing to follow broader principles of World Trade Organization´s (WTO´s) general agreement on trade in services, they have also consented to tailor the regional accord on service trade as per the reality of the region.
The understanding was reached during a meeting of SAARC Committee of Experts (CoE) that concluded in the capital on Friday. The CoE is SAARC´s technical body entrusted to develop modality for liberalizing services for regional trade and to negotiate accord for integrating service trade under SAFTA.
Nepal, India, Bangladesh, Bhutan, Pakistan, Sri Lanka and the Maldives are signatories to SAFTA, which presently deals with only merchandise trade.
"The CoE meeting has cleared some of the texts of the framework agreement on service trade. However, more discussions will be needed to finalize other issues," said Surya Silwal, joint secretary at the Ministry of Commerce and Supplies.
Silwal, who led the Nepali technical team in the meeting, told myrepublica.com that the CoE will meet again before August to clear the remaining issues of the draft framework.
Under the framework agreement, CoE will need to finalize issues like service sector liberalization plan, special and differential treatment and dispute settlement mechanism, among others.
The liberalization plan will include sectors to be opened for regional trade and time frame to begin liberalization and complete implementation of the plan. Under special and differential treatment, the framework will provide exemption and facilities to the least developed countries.
Dispute settlement mechanism, on the other hand, will depict methods for solving trade related disputes and protecting interests of genuine trade.
"Other broader subjects and trade related nitty-gritty will also be present in the accord. However, the real bone of contention will be the liberalization plan and special and differential treatment," said an official at Commerce Ministry.
He added that the present series of CoE meeting will largely focus on broader issues and principles to be incorporated for the service trade. "Real negotiations on which sectors to be opened and by when, and what sort of facilities should the least developed members get will start once the framework accord is endorsed by the higher body of SAARC," he stated.
The members have so far agreed to follow offer-request principle for the negotiation. This means, each member will first make its offers on opening service sectors and later they will request each other to open sectors of their interest.
"Economic need test, that is, the status and requirements of economy of individual member countries will also serve as another crucial benchmark for negotiations," said the source.
SAARC had envisaged regional free trade over a decade ago in a bid to give impetus to intra-regional trade, and linking trade opportunities with poverty reduction. However, SAFTA that came into effect two years ago has failed to achieve that goal so far.
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