SAFTA -- a shot in arms for SAARC

matters.

This has dispelled whatever skcepticism persisted about the SAFTA even after the decision of the leaders in the summit in Dhaka. Indeed, the accord on the SAFTA is a testimony that the seven member states of the SAARC are willing to take the two-decade old regional forum to its cherished goal surmounting obstacles that often tend to retard its progress. The agreement by the senior officials and the experts in the capital of Nepal after two days of tortuous and difficult negotiations brings to the fore the commitment of the members to strengthen the economic cooperation, particularly in the field of trade and commerce. It is all the more noteworthy for the simple fact that it has come close on the heels of the largely successful 13th summit, where the leaders sought to inject fresh vigour to the SAARC as it stepped into the third decade.

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Notwithstanding the decision of the summit to abide by earlier decision of the leaders that SAFTA would be implemented from the 2006,some degree of doubts did persists if an agreement would be possible on the issue before the year end. The Kathmandu meeting on November 29 and 30 was billed as a test case for the SAARC and it can now be said in a fitting tribute to the SAARC that the negotiators have not disappointed the well-wishers of the forum. The vexed matters were ironed out and the development is seen as a major step to promote regional trade. Finalising the modalities of the SAFTA, especially on such issues like the rule of origin and compensation to the revenue loss the weaker economies, were not very easy.

An earlier meeting again in Kathmandu before the Dhaka summit deliberated on these matters, but defied an accord although differences were narrowed down. The meeting that was originally scheduled in Islamabad was shifted to the capital of Nepal because Pakistan was struck by a devastating earthquake. Progress on SAFTA in the process suffered and consequently the expected advancement on the concept was not possible. Now SAFTA is a reality.

Without going into the brass tacks, some major points listed in the accord under article seven of the SAFTA, a phased tariff liberalisation from the date of its coming into force has been envisaged. In the first two years, the non least developed countries (non-LDCs) will bring down tariff to 20 percent while the LDCs will down it to 30 percent. The LDCs will then bring down tariffs from twenty percent to 0.5 percent in five years. Sri Lanka, which is a non-LDC will bring it down in six years and the LDCs from thirty percent to 0.5 percent in eight years. Moreover, the non-LDCs will reduce their tariffs for the LDCs products to 0-5 percent in three years.

This tariff liberalisation would not be applicable to the tariff lines included in the sensitive lists to be incorporated in this agreement as an integral part. Other issues which earlier defied a complete agreement have also been sorted out in the Kathmandu meeting of the experts. The SAFTA will definitely help largely enhance the inter-region trade, which is very low compared to other regional forums like the ASEAN. Now a timely and effective implementation of the accord is the necessity, which by all account, is not difficult after the vexed issues have been settled.

The twice-postponed 13th SAARC summit held in the Bangladesh capital last month adopted a 53-point Dhaka Declaration that contains a number of areas where the seven member states agreed to cooperate on matters ranging from disaster management to combating terrorism. True, many of these pious and ambitious measures and programmes seldom see the light of the day. Nonetheless, the existence of the SAARC over the last twenty years has not been useless as some critics would like to describe it. From the beginning, the integrated programme of actions (IPA) and different technical committees(TC) did some good work and results were visible even though nothing extraordinary. However, over the last few years, the progress of SAARC has undeniably been quite sluggish, prompting the critics to question about its efficacy.

The unfavourable political climate in the South Asia, which in some ways worked as a deterrent to the expected growth of the forum, contributed to the impression in certain quarter that it was not delivering. It is against this background, that the Dhaka summit took place and many eyes were cast on its outcome since the collective venture was entering its third decade after it was born in the same Bangladesh capital in 1985.The results of the summit have been by and large considered productive and the eagerness of the members to carry forward the forum was visible, albeit some political and other problems among the regional countries. The SAFTA that was agreed in the 12th summit in Pakistan was definitely a major issue of discussion for the leaders in Dhaka. Much of SAARC's activities and more importantly, its image and ability to move ahead to an extent rested on this SAFTA issue.

Not only the summit took clear decision on the matter, but the members spared no efforts to honour their leaders by clinching the accord as exemplified by the Kathmandu meeting. Definitely, this is a shot in the arms for the SAARC that appeared somewhat fragile not very long ago. As the Dhaka summit provided the much needed fresh impetus to the forum, the SAFTA agreement will hopefully provide further stimulation and act as a catalyst towards furthering regional economic cooperation. Now it remains to be seen how smoothly and effectively this accord is put into operation for the benefit of the member states.

Zaglul Ahmed Chowdhury is Foreign Editor of BSS