India forms a parallel regional trading bloc

Islamabad, Dec 25 (UNI) India has created a regional trading bloc excluding Pakistan, local media reported today.

The News quoted a senior government official as saying here that after Pakistan denied India equal treatment in trade under the South Asia Free Trade Agreement (SAFTA), India managed to create another regional trading bloc in South Asia comprising Bangladesh, Bhutan, Myanmar, Nepal, Sri Lanka and Thailand.

Six SAARC countries --Bangladesh, Bhutan, India, Nepal, the Maldives and Lanka-- are included as members while Pakistan has been left out of the bloc, the paper said.

The eight countries have also signed the framework agreement for a BIMSTEC free trade area.

The objectives of this agreement are to strengthen and enhance economic, trade and investment cooperation among the parties; progressively liberalise and promote trade in goods and services; create a transparent, liberal and facilitative investment regime; explore new areas and develop appropriate measures for closer cooperation among the parties; and facilitate the more effective economic integration of the least developed countries in the region and bridge the development gap among the parties.

The official said the BIMSTEC FTA would ultimately replace SAFTA, inflicting a huge economic loss on Pakistan. He said Pakistan would be isolated in this case.

Ironically, Pakistan's economic managers are not aware of the shocking developments, and some officials of the Ministry of Commerce are paying no heed to it and do not seem worried about the country's exclusion from BIMSTEC.

When contacted, Pakistan Commerce Secretary Syed Asif Shah said he did not know about the development, so he is unable to offer any comment on the issue.

Asked as to why Pakistan has not become a member of the new regional trading bloc, he said he did not know.

''Trade under SAFTA has virtually come to a standstill as Pakistan is not extending the tariff concessions to India that it is extending to other countries.'' ''This has led India to come up with the new trading bloc,'' he added.

From the beginning of trade under SAFTA on July 1 this year, Pakistan has refused to give equal treatment to India under the agreement on trade as being extended to other SAARC countries. It has claimed that unless the Kashmir issue is solved, it would not extend the tariff concessions to India under SAFTA.

Trade with India is currently going on under the bilateral positive items list regime and not SAFTA.

India has challenged Pakistan's stance in the SAARC Secretariat and is demanding that Islamabad allow New Delhi all SAFTA benefits.

UNI XC PA HT1627