Economic issues rule the roost at SAARC Summit

New Delhi, Apr 5 (UNI) Economic issues dominated the just concluded 14th SAARC Summit with India's decision to unilaterally liberalise tariffs for the Regions LDCs being the cornerstone of the event, and a roadmap to be chalked out for a South Asian Customs Union and an ultimate Economic Union as the future goals.

India's decision to provide a zero duty regime would benefit the poor countries of Afghanistan, Bangladesh, Bhutan, Nepal and the Maldives.

India already has a Free Trade Agreement (FTA) with Sri Lanka and the entirety of the proposal implies a Free Trade Area as far as India is concerned, barring, of course, Pakistan.

Prime Minister Manmohan Singh also promised to reduce the size of the negative list with these countries.

The fact of the matter is that Pakistan has yet to provide Most Favoured Nation (MFN) status to India, even though the latter did this decades ago to its neighbour. MFN status is almost mandatory or atleast a norm in a world where trade issues are decided by the World Trade Organisation (WTO).

The only other country which has not provided MFN status is the United States to Cuba, even though it is the end of the Cold War ideology everywhere else.

The question that is being debated among trade experts is whether SAFTA will be held hostage to impending political problems, as Pakistan Prime Minister Shaukat Aziz has stated that the opening up of bilateral trade was critically linked to solving the vexed Kashmir problem.

Could a virtual Free Trade Area be harmful for the Indian economy and be injurious to the small scale sector? External Affairs Minister Pranab Mukherjee said the experience of FTAs has been that they have had no adverse impact on the Indian economy and posed no threat in an ever-growing market. Besides, it was an era of competition and Indian industry had no option but to live with this reality.

India has an FTA with Singapore and Thailand, and is planning to sign one with ASEAN.

The scourge of poverty haunts South Asian nations and thus overtook the proceedings of the two-day event which came to a close here yesterday. There was realisation that there had been much talk and little action and hence the focus in future was to shift from ''declaratory to the implementation stage''.

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