India takes exception to Pak decision to limit trade under SAFTA

New Delhi, Jul 7 (UNI) India today strongly criticised Pakistan's decision to limit trade with it under South Asian Free Trade Area (SAFTA) to a few items saying the move went sgainst the ''very essence'' of the agreement and ''derogates'' it.

Pakistan's decision was ''against the very essence of SAFTA. The agreement will have little meaning if member countries (of the SAARC) do not respect it (the agreement)...It would also be contradictory to the things agreed to by the leaders of member countries,'' External Affairs Ministry spokesman Navtej Sarna said.

He however, reaffirmed India's commitment to the agreement saying it (India) was fully committed to it.

''On our part, India is fully committed to honour its commitments and prepared to shoulder a major share of responsibility to promote intra-regional and other forms of economic and technical cooperation.'' He said the notification issued by the Pakistan Government states that goods could be imported into Pakistan under the agreed SAFTA tariff concessions subject to import policy order notified by the Ministry of Commerce.

This last qualification referred to the import policy order of July 21, 2005, which limits SAFTA tariff concessions for India only to items on the existing bilateral positive list.

''We regard this action as against the very essence of SAFTA.

SAFTA operates on the basis of agreed sensitive lists. SAFTA has little operational meaning if member countries do not honour their commitments in letter and in spirit.'' He said the credibility of the participating member country and SAFTA itself would be seriously questioned if attempts were made to introduce additional conditionalities that were neither discussed nor agreed to when SAFTA was being negotiated. Any effort to subject SAFTA to such conditionalities would be a derogation of the agreement. It would also contradict the commitment made by the leaders at the 13th SAARC Summit.

''India has argued that if South Asia has to become a dynamic component of the larger process of regional cooperation and globalisation that is taking place in the world, it must first bring about economic integration amongst SAARC member countries otherwise SAARC runs the risk of being left far behind other regional organisations,'' he warned.

SAFTA came into force from January one this year but the Tariff Liberalisation Programme (TLP) started on July one. Pakistan decided to trade with India on the basis of a small list of 773 items under a positive list and refused to grant the Most Favoured Nation (MFN) status to India. It formally told New Delhi on Tuesday that it would not undertake the first Trade Liberalisation Programme (TLP) with India under the SAFTA.

The spokesman said that during the meeeting of the Committee of Experts (COE) that preceded the SAFTA Ministerial Council (SMC) meeting in Dhaka on April 20, the Pakistani delegation questioned almost every decision taken at the 12th meeting of the COE held in December 2005.

''Their intention was to appear skeptical about SAFTA, prolong the debate and prevent substantive discussions,'' he said.

Presently India has trade agreements with all SAARC member countries except Pakistan, Free Trade Agreements (FTAs) with Bhutan and Sri Lanka, Treaty of Trade with Nepal, with the Maldives an FTA which provides for MFN status to each other and with Bangladesh a Trade Agreement providing for expansion of economic and trade cooperation.

However, while India granted MFN status to Pakistan in 1996, India's exports to Pakistan are restricted as per the items in the 'Positive List' of Pakistan, containing 773 importable items from India, the spokesman added.

''Pakistan has so far not granted MFN status to India despite its obligations, including under the WTO, and has cited extraneous political, economic and other reasons for thiss,'' the spokesman said.

He added that granting MFN status to India by Pakistan would become irrelevant since SAFTA would over-ride bilateral trade restrictions. However, Pakistan continued to hold India ''in suspense'' over the grant of MFN status.

UNI