Date:30/12/2003 URL: http://www.thehindu.com/2003/12/30/stories/2003123003951100.htm

National

SAARC unlikely to meet deadline on free trade

By Amit Baruah

NEW DELHI DEC. 29. It was in the realm of the possible but the hardheaded negotiating tactics adopted by Bangladesh could well have derailed the draft framework treaty for a South Asian Free Trade Area (SAFTA).

If the Foreign Secretaries and Ministers of the South Asian Association for Regional Cooperation (SAARC) are unable to make progress on the SAFTA draft, they will fail to meet the objective set out by the SAARC Heads of State/Government at their 11th summit in Kathmandu. The declaration, issued after the January 4-6, 2002 summit, said: "Recognising the need to move quickly towards a South Asian Free Trade Area, the Heads of State or Government directed the Council of [Foreign] Ministers to finalise the text of the draft treaty framework by the end of 2002."

However, no summit meeting could take place in 2003 on account of the continuing tensions between India and Pakistan. The SAARC leaders will be meeting in Islamabad exactly two years after the Kathmandu SAARC summit, but officials dealing with the SAFTA negotiations are not hopeful of an accord.

The Kathmandu declaration also spoke of a regional economic union: "To give effect to the shared aspirations for a more prosperous South Asia, the leaders agreed to a vision of a phased and planned process eventually leading to a South Asia Economic Union."

Clearly, the declarations contained fine ideas and concepts but a lot has been lost on account of poor implementation. The inability of the SAARC Commerce Secretaries to arrive at an agreement over December 23-24 in Islamabad is evidence of this.

India has long been calling for some "substance" to SAARC before the Prime Minister, Atal Bihari Vajpayee, travels to Islamabad for the summit. For once, the blame does not lie with India and Pakistan for derailing the SAARC's economic agenda.

The failure to move ahead with economic integration would mean that South Asia would continue to languish without a viable economic block. The progress achieved on free trade and reduced tariffs in neighbouring South-East Asia does not seem to have convinced some in South Asia about the merits of a more liberal trade.

The discussion on the concept of a free trade area has been on for some time within SAARC councils. Even during the 1995 summit, this issue had come up for discussion. Almost a decade has passed since that New Delhi meeting, but the SAARC nations are still addressing the most basic issues in liberalised trade.