The commerce ministers from the eight South Asian countries that met for the fourth time in the capital on Wednesday took such decisions, after they accepted that longer sensitive list and slowed tariff liberalization was rendering SAFTA failure in giving boost to the intra-regional trade.“
"To do away with this situation, the council has formed a task force to slash the number of items in the sensitive list," said Rajendra Mahato, Minister for Commerce and Supplies.
The task force has mainly been entrusted to identify products of intra-regional export interest, exclude them from sensitive list and expedite tariff liberalization on them. It has been asked to complete these actions by September 2010.
Presently, SAARC members maintain sensitive lists as long as 25 percent of the total tariff lines. Still worse, the list includes items of trade interest, which indicates the members are unwilling to open their markets despite committing for regional trade integration. As a result, the members have barely conducted trade under SAFTA even though the same came into implementation in 2006. The scenario stands contrary to the vision of the SAARC leaders, who believed SAFTA could expedite trade and help the region fight burgeoning poverty.“
"Unfortunately, three years down the line, SAFTA still fails to yield desired result," said Mahato.
The SAFTA Ministerial Council also urged the member states to cut tariff from 30 percent to zero percent, as they committed under the tariff liberalization of SAFTA. It even asked the member states to complete internal procedures for fulfilling this commitment and report it to the SAARC Secretariat by mid-December 2009.
The fourth SAFTA Ministerial Council also asked SAARC member to be serious towards starting free trade regime on service trade.
Presently, SAFTA deals with commodities trade only. But given the rapid expansion of service sector and its growing importance on national income and trade, SAARC members have decided to commence free trade on services as well. But the technical experts, assigned to draft the text of free trade accord on trade in services, have moved slowly, as developing countries are unwilling to pledge special and differential treatment to the least developed members.“
"The committee of experts (CoE) has been asked to end the existing impasse and finalize the text soon so that it could be signed during the 16th SAARC Summit scheduled for 2010 in Bhutan," said Minister Mahato.
Unlike the FTA on trade in goods, which is done on negative list approach, member countries have agreed to open the service trade on positive list approach. They will negotiate on the accord on request and offer basis once the framework accord is adopted by the Summit.
SAARC commerce ministers will meet next in Maldives in 2010 to review the status and implementation of SAFTA.
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