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SAARC freezes SAFTA, unveils regional trade plan

The 10th South Association Association for Regional Co-operation summit has sidestepped plans to establish a South Asian Free Trade Area by 2001 and instead agreed to have a regulatory framework to boost regional trade, Sri Lankan President Chandrika Kumaratunga said today in Colombo.

''We decided it is not feasible to actually make it functionally operational by 2001,'' the new SAARC chairperson told a post-summit news conference.

But she said the summit agreed that they should start work on the regulatory framework to be finalised and ratified by that year.

It was at the ninth summit in Male that the leaders decided to advance the goal of SAFTA from 2005 to 2001, but a ''group of eminent persons'' appointed by the SAARC to study its activities had reported that SAFTA was not practical before 2008 or 2010.

The decision to defer SAFTA was believed to have stemmed from the fear among the smaller member-states that it would lead to Indian goods flooding their tiny markets.

The Colombo declaration, issued at the end of the summit, reiterated the importance of achieving SAFTA. ''To this end, they (SAARC leaders) decided that a committee of experts, in consultationwith member-states, be constituted with specific terms of reference to work on drafting a comprehensive treaty regime for creating a free trade area.''

They expressed the view that such a treaty must incorporate, among other things, binding time-frames for freeing trade, measures to facilitate trade, and provisions to ensure an equitable distribution of the benefits of trade to all states, especially smaller and least developed states including mechanisms for compensation for revenue loss.

The declaration said the leaders assessed the progress made in the two rounds of negotiations undertaken under the South Asian Preferential Trade Agreement and decided that the third round of talks should be concluded well before the 21st session of the Council of Ministers next year.

''The heads of state or government decided that to accelerate progress in the next round of SAPTA negotiations, deeper preferential tariff concessions should be extended to products which are being actively traded, or are likely to be traded, among members.''

They also decided that discriminatory practices and non-tariff barriers should be simultaneously removed on items in respect of which tariff concessions were granted or had been granted earlier.

The declaration also said that measures to remove structural impediments should also be taken in order to move speedily towards the goal of SAFTA.

They also decided that the domestic content requirements under the SAPTA rules of origin should be reduced and that the SAPTA committee of participants should meet by mid October in Colombo to finalise the extent of reduction in keeping with the decision of the second SAARC commerce ministers meeting.

Kumaratunga hailed the wide-ranging concessions and removal of non-tariff barriers announced by Prime Minister Atal Bihari Vajpayee in his summit speech to boost trade ties with the SAARC nations.

''They are the most wide-ranging concessions offered by India,'' she said.

UNI