Immediate beneficiaries will be Bangladesh, Bhutan, Maldives, Nepal and Sri Lanka
To draw up a timetable to ease tariffsTariff concessions will be effective from July
DHAKA: India and Pakistan on Thursday agreed not to levy import duties of more than 5 per cent on products traded within the South Asia Free Trade Area (SAFTA).
The decision was made at a meeting of South Asian commerce ministers, which concluded in Dhaka on Thursday. The meeting primarily discussed implementation of a free trade area in the region over the next decade.
``They have agreed to remove import duties above 5 per cent in three years to 2008 under the South Asia Free Trade Area (SAFTA) agreement,'' Bangladesh's Commerce Mminister Altaf Hossain Choudhury told reporters.
"The immediate beneficiaries will be five other countries in the South Asian Association for Regional Cooperation (SAARC),'' Mr. Choudhury said.
SAARC groups Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka.
"The other five SAARC countries have also agreed to reduce their import duties by between 0 and five per cent within the next 10 years,'' he added.
The meeting was attended by commerce ministers of all SAARC nations, except Nepal where anti-monarchy protests have gathered momentum over recent weeks. The meeting decided to draw up a timetable to gradually ease tariffs to make SAFTA effective by 2016, officials at the meeting said. Intra-regional trade volume among SAARC countries stands at $6 billion, or a mere 4.4 per cent of the total trade of member states worth $135 billion, officials said.
This is in contrast to intra-regional trade of 55 per cent in the European Union. 61 per cent in North American Free Trade Agreement members and 25 per cent in the Association of South East Asian Nations (ASEAN).
The SAFTA agreement signed in Islamabad in January 2004 came into effect in January this year. Tariff concessions under the agreement will be effective from July.
A range of products that members deem sensitive will be excluded from the free trade deal. Reuters
UNI reports: India stands prepared to negotiate a bilateral Free Trade Agreement (FTA) with Bangladesh if Bangladesh wants it for mutual benefit, India's Minister of State for Commerce Jairam Ramesh said. He said Indian Commerce Minister Kamal Nath had proposed categorically to Bangladesh about the bilateral FTA during Prime Minister Khaleda Zia's visit to New Delhi last month. "We're waiting for Bangladesh's response to that proposal,'' he said.
However, Mr. Ramesh said, "FTA is not a `mantra'. It is only an instrument of deepening engagement with Bangladesh. It has both plus and minus points. It is a very serious issue that needs to be examined how it could meet the requirements of the two countries.''