SAFTA has potential to establish regional bloc - Gilani
Pakistani Prime Minister Syed Yusuf Raza Gilani on Thursday said that
South Asian Free Trade Area (SAFTA) has the potential to establish a
regional bloc with collective goals, and diversified abilities and
potential as well as accelerate trade among the member countries.
"I see SAFTA not only as a regional bloc but also as a union of
regional countries with collective goals, common objectives and
diversified abilities and potential", he said.
"Let us harness this diversity into unity and create an enabling
environment to put our respective countries on the road of economic
development by increased mutual trade and investment," Gilani said while
addressing the SAARC (South Asian Association of Regional Countries)
Commerce Ministers at PM House in Pakistan.
The Prime Minister recalled and termed the signing of the Agreement
on South Asian Free Trade Area in January 2006 as a momentous event in
the history of SAARC and said, "We have undertaken an initiative, which,
I believe, can open up a huge opportunity for achieving much greater
economic integration among countries of the region." "Regional economic
integration, in my view, is the most viable mechanism in the
contemporary world," he added.
The Prime Minister said in today's world every country is struggling
to transform the emerging challenges of globalization into opportunities
for fostering development and economic prosperity.
"Regional trading arrangements are seen as an effective regime to
encounter the global challenges through greater economic cooperation and
engagement. The emergence of regional groupings across the world in
recent times clearly demonstrates the need for forging deeper
integration in our region," he added.
The Prime Minister said it was now widely recognized that regional
trade agreements can complement the broader objectives of multilateral
trade liberalization processes. He said a vast majority of existing
regional agreements are established among geographical neighbours, as in
the case of SAFTA, adding, this is because such proximity provides
inherent advantages in terms of greater and faster integration.
"SAFTA has also provided us with an enabling institutional framework
to increase the existing low levels of intra-SAARC trade - around five
percent in comparison to the trade share of the regional trade of the
European Union at 67 percent, the North American Free Trade Agreement
(NAFTA) at 62 percent and the Association of Southeast Asian Nations
(ASEAN) at 26 percent," he added.
The Prime Minister said the potential benefits of a successful free
trade agreement are multiple, and will not be restricted to increased
"In fact it is not an exaggeration that the achievement of the core
objectives of SAARC itself - economic growth, social progress and
cultural development including the promotion of the welfare of the
people of South Asia, will depend, to a great extent, on the economic
and other benefits that will result from implementation of SAFTA.
It is, therefore, imperative that we build on the momentum by
implementing decisions taken by bodies formed under SAFTA," he stressed.
The Prime Minister said the establishment of South Asian Free Trade
Area depends critically on the ongoing negotiations, adding, there are
several vital issues that are to be successfully negotiated within the
specified time-frame. "As per Trade Liberalization Programme under SAFTA,
the Non-LDCs (Sri Lanka, India and Pakistan) would reduce their tariff
to 0.5% by 2013, whereas the LDCs (Least Developed Countries) would
reduce tariff to 0.5% by 2016," he said, adding, "the SAFTA tariff
Liberalization Programme also
allows the member states to retain "Sensitive Lists" that are not
offered for concessional treatment." The Prime Minister said, "We know
that India has two separate Sensitive Lists one for NLDCs and other for
Since India, Pakistan and Sri Lanka are NLDCs in the region, this
makes Indian Sensitive List Pakistan-specific. The Indian Sensitive List
for NLDCs has 861 but for LDCs it has only 25 items," he added. Gilani
said, "We are also cognizant of the fact that the WTO trading
arrangement is based on the principle of MFN, which implies
non-discriminatory treatment among the member countries in terms of
tariff as well as the number of tariff lines traded between the
countries," adding, Pakistan being the signatory to WTO is obliged to
observe this principle.
"I recognize that the outstanding issues of negotiation are quite
complicated and it is not easy to find a common ground for all
negotiating parties. Despite such difficulties, we have got to work hard
and work in a spirit of goodwill and accommodation, keeping in mind the
time limit and
the urgency of deepening economic integration in our region. I have
full confidence in you and firmly believe that you would be able to
conclude the negotiations successfully," he added. The Prime Minister,
however, added that "On behalf of the government of
Pakistan, I assure you of our fullest cooperation in our collective
march towards prosperity and peace in the region". Earlier Commerce
Minister, Makhdoom Amin Fahim, in his address said that the major aim of
the forum was to promote economic cooperation between the member states.
He said that Prime Minister of Pakistan has declared the year 2012 as
year of regional trade and economic connectivity. In his remarks, the
Secretary Commerce said that South Asia was the least integrated region
in the world in terms of regional trade, while NAFTA, EU and ASEAN
countries had a thriving trade among their members.
Present on the occasion were Sri Lankan Commerce Minister A Rishad
Bathiudeen, Bangladeshi Commerce Minister Ghulam Muhammad Quader,
Bhutani Economic AffairsMinister Lyonpo Khandu Wangehuk, Indiaan
Commerce Minister Anand Sharma, Nepali Industry and Commerce Minister
Lekh Raj Bhutta, Maldivian Economic Development Minister Aminath Shausan
and Director General Commerce and Industries, Mozammil Shinwari.
Minister for Commerce, Makhdoom Amin Faheem, Minister for Defence
Production and Industries, Ch Pervez Elahi, Advisor to PM on Finance,
Dr Abdul Hafeez Shaikh and other senior officials of the relevant
ministries represented the Pakistani side. (APP)