No agreement likely on three controversial SAFTA points

By Ejaz Haider

DHAKA: As the twice-postponed 13th SAARC summit finally opens here today, agreement on the three sticking points of SAFTA (South Asia Free Trade Area) is likely to elude the member-states despite the optimism shown by Pakistan’s Foreign Secretary Riaz Mohammad Khan, who briefed the media in a pre-summit session yesterday.

The three issues that have troubled the SAARC states since they signed the SAFTA agreement at the January 2004 summit in Islamabad and are very likely to frustrate the January 2006 deadline for putting the agreement into operation relate to the sensitive list, the rules of origin and compensating the LDCs (least developed countries) in the region.

Mr Khan, who spoke to the media yesterday, said that these issues are resolvable. However, he also let slip the fact that a final agreement could materialise in the December meeting of the working group on SAFTA. His statement implied that there may not be a breakthrough on the three points during the two-day summit. “There are technical issues involved here and experts are trying to work them out,” he told the media.

The fact is that the issue is underscored by politics and it involves the interests of India. Giving special treatment to the LDCs, for example, was agreed upon even under SAPTA (South Asian Preferential Trade Agreement). In SAFTA, too, the LDCs signed on the document because the more developed states agreed to (a) provide technical assistance to them; (b) recompense them for revenue loss; and (c) give them special treatment on the issue of rules of origin of a product.

However, despite 11 meetings of the working group so far, SAARC states have not reached a consensus on these points. The pace has been slow and India, which Secretary Khan would not mention, has shown itself less amenable to accommodate other states under the multilateral SAFTA than it has under bilateral FTAs (free trade agreements). It has bilateral FTAs with Nepal, Bhutan and Sri Lanka and has offered one to Bangladesh. It clearly wants to avoid getting netted in a multilateral arrangement, which also includes Pakistan, and can restrict its policy choices much more than bilateral arrangements can.

Pakistan, as Mr Khan noted, is committed to making SAARC more vibrant. Islamabad has already circulated its concept papers on how to make the process more meaningful. Most of these proposals have already been reported in the press. However, the problem is that India still thinks that a strong multilateral forum could restrict its freedom of movement, which is why it is dilly-dallying on the issue of bringing China into the regional setting either as an observer or a dialogue partner. China has already shown interest in some kind of association with SAARC and made a formal request to this end.

When Mr Khan was asked which country had shown reservation on the issue, he declined to name names, saying it would be a breach of trust. However, it is widely known that India wants the modalities of bringing in any new members or observers worked out before China’s request can be considered. The other state that has made a formal request for membership is Afghanistan. Pakistan is supportive of both states, separately and on merit and, as Mr Khan stressed, is not making a linkage between the two cases.

There is general agreement among analysts here that the India-Pakistan rivalry continues to muddy the SAARC waters. As if to flag that point, the two prime ministers, Shaukat Aziz and Manmohan Singh, are scheduled to meet today on the sidelines of the summit. The agenda, as Mr Khan said, would include a review of the peace process and outstanding issue, including Kashmir, would come under discussion.

Such is the nature of India-Pakistan relations and their importance to other states of the region that if the two premiers were to make a breakthrough in bilateral ties, the summit would be pushed in the background.

The significance or otherwise of SAARC has thus to be seen in the context primarily of India-Pakistan relations. There are other structural issues, too, but the necessary, though not sufficient, condition for SAARC to make any meaningful progress is for India to accept the presence of Pakistan and begin to deal with it in a cooperative framework. That done, the regional forum could begin to move beyond mere ceremonies to achieving substantive goals.

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