Trade talks make progress

Negative or sensitive listing of products relates to items that would be kept outside the purview of zero-tariff facility in a free trade regime. A long list is an aggravation of free trade potential. The experts from seven Saarc countries agreed to make the list as short as possible so that the circle of free trade expands. Significantly, two sensitive lists will be taken into consideration, one from the developing countries and another from the least developed ones.

Most importantly, there was a consensus on the general principle of rules of origin in the sense that products manufactured with imported raw materials would be tradable. But on local value addition to exportable products, there was disagreement. Bangladesh pressed for 30 percent ceiling while India stuck to 40 percent.

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The LDCs have been demanding a compensation package to tide over revenue losses to be incurred consequent upon reduction of tariff rates. The whole issue was discussed in the light of proposals tabled for establishing a separate fund to help the poorer countries recoup losses in a free trade regime. It is relevant to point out that Bangladesh, Nepal, Bhutan and Maldives will bring down tariffs to the five percent level by 2016 while India, Pakistan and Sri Lanka, with their more developed economies, will have until 2010 to do the same.

It is understood that 'modalities' have been finalised for establishing a fund for technical assistance to the least developed countries in the Saarc, designed to bolster their position as free trade partners.

Hopes are now pinned on the final round of expert committee meeting to be held in New Delhi sometime in June next year, the deadline for reaching a comprehensive agreement on all the four key issues. Let the forward foothold reached in terms of narrowing differences at the Dhaka talks prove a clincher at the crucial Delhi round. After all, we are racing against time to herald the free trade area as a new year's gift to ourselves from January, 2006.