The Hindu : Looking beyond SAARC

Online edition of India's National Newspaper
Monday, Sep 15, 2003

Opinion

Opinion - News Analysis

Looking beyond SAARC

By C. Raja Mohan

NEW Delhi Sept. 14. The Government will soon make up its mind on whether the Prime Minister, Atal Bihari Vajpayee, should travel to Islamabad in January. India will shortly receive a formal invitation from Pakistan to join the delayed summit of the seven South Asian nations.

India, which refused to join the summit earlier this year, has tied the travel plans of the Prime Minister to substantive progress on economic cooperation in SAARC. Mr. Vajpayee will be there only if there is a worthwhile agreement to sign.

A number of meetings of senior officials are scheduled in the next few weeks, which might show if Pakistan is serious about liberalising trade in the region. The SAARC Foreign Ministers are also slated to meet in New York later this month on the margins of the annual session of the United Nations General Assembly.

Mr. Vajpayee is expected to go to Islamabad if there is progress towards free trade within SAARC in the next few weeks. However, if Pakistan succeeds in stalling any such move, India will have no reason to shed tears. New Delhi has begun to shape other attractive options within the region and beyond it.

* * *

In a significant development, Bangladesh recently accepted India's invitation to begin discussions on drafting a bilateral free trade treaty. The first round of talks is expected to take place next month.

Bangladesh was reluctant to begin talks till India addressed some complaints on market access, but has now begun to see the urgency of moving forward on a free trade agreement (FTA).

On India's part, the External Affairs Minister, Yashwant Sinha, assured Dhaka that there could be an "early harvest" on issues of concern to Bangladesh within the ambit of the FTA negotiations.

The talks are likely to be focussed on the model of the FTA with Sri Lanka, which has been a resounding success. Sri Lanka and India are now looking at a more comprehensive agreement on economic cooperation. Bangladesh too may be ready to discard its negative attitude towards economic cooperation with India.

A shift is also reflected in its recent decisions to negotiate an FTA with Pakistan and a framework agreement on trade with the United States.

Welcoming these moves, Government sources here believe that free trade with other nations might have an impact on Bangladesh's domestic politics, which have become a hurdle for pragmatic economic cooperation with India.

India will have to think bold in helping Bangladesh move towards rapid economic integration by offering generous terms that will lead to an early reduction of trade imbalance in favour of India.

A new framework for commerce with Bangladesh would automatically create a free trade area of sorts in the subcontinent, minus Pakistan. India is the only country with borders to other South Asian nations.

It already has FTAs with Nepal, Bhutan and Sri Lanka. With a similar mechanism in place with Bangladesh, it does not really matter whether SAARC manages to come up with a regional FTA.

* * *

Whether the SAARC summit happens in Islamabad during January or not, India is preparing for a far more promising summit at Phuket, Thailand, in February 2004.

Senior officials from what is awkwardly called BIMST-EC are gathering this week in Bangkok to finalise the agenda for the summit. Underlining the importance that India attaches to the summit, the Government is despatching the Foreign Secretary, Kanwal Sibal, to lead the Indian team at the talks in Bangkok between September 17 and 19.

The BIMST-EC brings together Bangladesh, India, Myanmar and Thailand to promote regional economic cooperation. Nepal and Bhutan are set to become full members. That will bring five nations of the subcontinent with two of their neighbours in South East Asia into negotiations on free trade.

If SAARC is going nowhere thanks to Pakistani obduracy, the nations of the region now have another framework to engage in productive economic engagement.

India does not want to pit BIMST-EC against SAARC. The message from India is simple: it is ready to move wherever it can on regional economic integration — with Pakistan if possible and without if necessary.

* * *

The U.S. Ambassador to Pakistan, Nancy Powell, will be here this week for consultations with Indian officials and influential voices outside the Government.

It is a standard practice in U.S. diplomacy for Ambassadors in one country to travel to neighbouring ones to get a sense of the perspective from across the border.

Ms. Powell has stated publicly in the recent past that Pakistan must stop being a platform for international terrorism.

Her talks here might yield insights on the complex political situation in Pakistan and the long-term American approach to our western neighbour.

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