The Hindu Business Line : Pranab urges Pakistan to revise stance on SAFTA

New Delhi March 19 Ahead of a crucial SAARC summit meeting being hosted by India, the Union External Affairs Minister, Mr Pranab Mukherjee, on Monday cautioned Pakistan against non-compliance with SAFTA (SAARC Free Trade Agreement) and urged it to revise its stance to ensure that its global commitments were complied with.

Inaugurating a day-long regional conference on `Economic Cooperation in SAARC: SAFTA and Beyond' organised by the Research and Information System (RIS) for Developing Countries and the South Asian Centre for Policy Studies, Mr Mukherjee said that otherwise SAFTA and the process of regional economic cooperation would continue to remain "fragile".

Noting that "in the sub-continent, we must begin to walk on both legs — simultaneously resolving political differences and expanding economic integration," Mr Mukherjee said that the realisation of genuine free trade in the region should not be weakened by linking SAFTA to "extraneous political considerations". He said that the complementarities in the region should be used to expand the scope of SAFTA to cover trade in the services sector too. He added that India was hopeful of finalising "the Agreement for Promotion and Protection of Investments", which would contribute meaningfully to further economic integration.

Enumerating the advantages of regional integration, the Minister said that the emergence of Indian economy over the last few years as one of the fastest growing ones provides opportunities of expanding markets, investments, technology and entrepreneurial resources for the countries in the region.

He cited India's FTA with Sri Lanka which helped the latter to reduce its trade deficit with India, while Bhutan's cooperation with New Delhi in tapping its hydro electrical potential has helped in its economic advancement. Trade-creating investment in Nepal was yet another successful instance of spurring bilateral trade, he said, adding that the growing purchasing power of Indians has helped boost tourism in Maldives, Nepal and Sri Lanka. Highlighting India's partnerships with countries of the region and beyond, including Singapore and the proposed one with ASEAN, Mr Mukherjee said the web of engagements might herald an eventual free trade area in Asia and possibly extend to Australia and New Zealand.

Mr Mukherjee also voiced concern that while countries in South Asia were integrating with the global economy, they remain less integrated among themselves. In his presentation, the RIS Director General, Dr Nagesh Kumar, emphasised the need for expediting completion of SAFTA through an early harvest scheme or a faster track, complemented by unilateral measures, expanding the scope to substantially all trade by only negative list approach and by reducing sensitive lists and addressing non-tariff barriers.

He said that an integrated South Asia could be a crucial building bloc of an emerging broader Asian regional grouping.

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