The narrowing further down of differences during the 10th round of talks of the Committee of Experts (CoE) on South Asian Free Trade Area (SAFTA) raises hope about the SAARC plans to launch SAFTA on January 1, 2006, with a view to boosting intra-regional trade volume, which now accounts for a mere 4 per cent of SAARC countries’ total trade volume. The developing member states, such as India and Pakistan, have agreed to provide training and consultancy services in sectors like agriculture, textiles, and WTO-related matters. The meeting also agreed on a format of certificate of procedural operations under the general rules of origin, along with a 10 per cent derogation facility to the LDCs.
Though the 10th round was intended to be the last one to finalise the SAFTA draft accord, some outstanding issues remain — sensitive lists, SAFTA rules of origin and compensation mechanism for revenue loss. Products and areas for revenue compensation mechanism are yet to be identified. However, before the next round slated for October in Islamabad, the seven members will exchange their respective sensitive lists bilaterally before arriving at a regional consensus by the end of this year. Ultimately, the new trade regime is bound to benefit the consumers of the region and help increase the region’s GDP growth.
As for Nepal, its dealings with other countries or organisations have generally been less than satisfactory. For example, it has often faced problems after signing treaties or agreements, for example, with India, leading to complaints and misunderstandings later on. This should not happen in the case of SAFTA. But the government’s homework leaves room for improvement. Certainly, Nepal cannot escape from globalisation and liberalisation of trade and investment. Therefore, it should fully equip itself, for instance, by developing more exportable products, to derive optimum benefit from free trade in South Asia.