Not all is lost
The second meeting of the SAFTA ministerial council, held in the capital on Monday to review the implementation of SAFTA as per the mandate of the SAARC Council of Ministers, ended on a rather sour note, with India and Pakistan trading accusations. Consequently, their bilateral trade may suffer, instead of picking up under the South Asian Free Trade Area (SAFTA) treaty, which signed in 2004 came into force on the first day of last year. India’s charge was one of non-reciprocity. Indian commerce minister Kamal Nath warned that India could stop market access facilities to Pakistan if it refused to open up its market to Indian products under the regional pact. On its part, Pakistan is seeking to link such opening up to the settlement of “other crucial political issues”. Besides, Pakistan has been accusing India of placing non-tariff barriers on its exports. Several months ago, the Pakistani foreign minister had been quoted as saying that Indian exports to Pakistan had shot up by 400 per cent during the preceding year, while Pakistani exports could not go up “despite its competitive strength”.
If the dispute is not resolved soon and the Indian threat is carried out, SAFTA would lose much of its relevance, creating a big setback for the regional body. The two neighbours have longstanding major political problems to solve. The composite dialogue process is already underway between the two biggest and most powerful SAARC members. But it needs to be speeded up with all seriousness if a long-term solution of those disputes is to be found, with both the neighbours changing somewhat their entrenched positions. But this should not, however, be allowed to weaken the regional trading arrangements, put in place after so much of time and effort. There is merit in Kamal Nath’s argument that Pakistan should
not insist on qualified and conditional implementation of a regional pact that applies to all the signatories equally. At the same time, it would be fair enough to look into the Pakistani charge of non-tariff barriers. Both sides could sit together to find out whether it was based on mere apprehensions or on obtaining realities.
According to Pakistani commerce minister Humayun Akhtar Khan, Pakistan is seeking a “level playing field in order to create a further trade-enabling environment”, for which he says a “composite dialogue” with India was necessary to address the Indian demand. However, he offered some hope by indicating that a resolution of the present differences could be found “within six months”. Therefore, as the largest, the most populous and the most powerful member of SAARC, India cannot be expected to take retaliatory measures in haste. But it is incumbent on Pakistan to explain fully its discriminatory trade practices against India, as SAFTA does not provide for selective implementation. All this requires more bilateral talks and more time. Finally, member states will be well advised to ponder whether it is proper within the SAARC framework to make the discharge of their trade-treaty obligations conditional on the resolution of bilateral political problems.