Himalayan News Service

Kathmandu, April 25:

The eighth meeting of SAARC Committee of Experts (CoE) kicked off here today, to sort out outstanding issues related to the timely implementation of South Asia Free Trade Area (SAFTA) agreement, next year. The meeting, which is likely to be the final round of talks between the seven South Asian countries for adopting the SAFTA on time, will focus on rules of origin along with sensitive list, technical assistance (TA) and revenue compensatory mechanism for least developed countries. Inaugurating the meeting, finance minister Madhukar SJB Rana, reiterated that Nepal’s commitments to regional economic cooperation through SAARC is part of its economic liberalisation and desire to integrate Nepali economy into South Asian economy. He also underlined the need to address the problems of trade asymmetry in the region and geographical limitations hurting the LDCs.

The meeting will last till April 27.

Referring to findings of eminent person’s group (EPG), Rana said that SAFTA would not succeed if it fails to compensate LDCs for their immediate trade losses. “We should be innovative in devising policies, rules and regulations to provide the desired special and differential measures for LDCs,” he said. Rana also urged to devise special provisions, taking into consideration special needs of landlocked and island-locked countries. “Such provisions should look into the reduction of transit and transhipment costs as well as enhancing supply chain management capacity,” he added. “In the light of the completion of seven meetings and the fast approaching date for the agreement on SAFTA, the eighth CoE meet carries a special significance for all of us in striving for a consensus on outstanding issues,” Prachanda Man Shrestha, joint secretary at the ministry of industry, commerce and supplies said.

CoE’s mandate

Kathmandu: The CoE has been entrusted to settle the issues by the end 2005, as pre-entry requisite for the SAFTA. The committee has already convened seven such meetings (one each in member countries) to pave the path for easy entry into SAFTA. The 12th SAARC Summit held in Islamabad endorsed the enforcement of SAFTA from January 1, 2006. The sensitive list and rules of origin are two crucial aspects of the regional free trade area pact, which the member countries are yet to come to a consensus to. Proper identification of origin of particular goods is vital in any FTA and the rule of origin is expected to top the list of agenda during the meet. The meeting is also likely to finalise the SAFTA sensitive list. A sensitive list contains tradable items that would not get any tariff concession in the SAFTA, which was signed by the SAARC members in January last year. The issues endorsed by CoE will be presented at the meeting of commerce secretaries and then to the ministerial meeting.

Once the ministerial meeting endorses these, the decisions will come into effect. During the seventh CoE meet held in Maldives, member countries had agreed to allow 40 per cent value addition for developing countries and 30 per cent for LDCs. However, the CoE is yet to sign a final deal. The meet approved a provision of 10 per cent ‘derogation’ to LDCs. — HNS