Maldives insists on 100pc reduction in sensitive products

Syful Islam SAARC chair country the Maldives is insisting on 100 per cent reduction in sensitive list of products under the SAFTA accord by 2012 to make the regional bloc a free trade area, trade officials said Thursday. India supports the proposal as it has recently abolished the sensitive list for the least developed countries (LDCs) and offered duty free and quota free access of 25 but all their products to its market. During the declaration drafting committee meeting in the Maldives, before the South Asian Association for Regional Cooperation (SAARC) summit took place in the first week of this month, the Maldives officials tried to convince the member countries to incorporate it in the Addu declaration. "Though India has supported the proposal, other members were silent as usual since it's not possible for the countries which have any manufacturing unit," Dr Mostafa Abid Khan, joint chief of Bangladesh Tariff Commission who attended the meeting, told the FE. Maldives officials have been saying that 100 per cent reduction in the sensitive list should be a political decision. However, they could not convince the meeting how they are going to realize it. Bangladesh officials in the meeting opposed the proposal terming it 'unrealistic from the previous experience'. They said that the proposal in not implementable. Dr Khan said in the meeting that the problem was not only with the sensitive list. There are other issues like non-tariff measures, standard and customs procedures with the sensitive list which are barrier to intra- SAFTA trade. "As a last option I proposed substantial reduction in the sensitive list at the earliest, early resolution on non tariff measures, harmonisation of standards and customs procedures." Mr Khan informed the ministry of commerce (MoC). He said: "The non tariff measures, standard and customs procedures hinder trade under SAFTA even in non- sensitive items." Bangladesh has 1,233 products on the sensitive list for the LDCs and 1241 for the non-LDCs. India had 480 items on the sensitive list for the LDCs which it recently reduced to 25. It has 868 products in the sensitive list for the non-LDCs. Bhutan has 150 items for both the LDCs and non-LDCs, Nepal-1,257 for the LDCs and 1,295 for the non-LDCs, the Maldives-681 for both, Pakistan-1,169, Sri Lanka-1,042 and Afghanistan-1,072 items on the sensitive list. The SAARC member states in September last agreed to trim their sensitive list by 20 per cent which will be effective from January 1, 2012. Bangladesh has already got cabinet approval to reduce the sensitive list by 246 items for the LDCs and 248 ones for the non-LDCs. A circular will soon be distributed taking out the items from the sensitive list. Exclusion of the items from the sensitive list means these products are allowed in the country paying reduced duty or in some cases enjoying duty and quota free facilities. Statistics show that the intra-SAARC trade under the SAFTA arrangement reached US$1.1 billion mark in February last since launching of the trade liberalisation programme in July, 2006. Bangladesh has exported goods worth $399.60 million between 2007 and 2010 under the SAFTA, while India's export during the period reached $604.95 million and that of Sri Lanka, $1.18 million. Bangladesh's export to Pakistan under the SAFTA arrangement between 2006 and 2010 reached $94.79 million and to the Maldives, $0.014 million during the period. Negative list of SAFTA comprises 53 per cent of the total trade among the SAARC member-states and that is why their intra-regional trade is not increasing. Statistics show that Bangladesh had no exports to Afghanistan, Bhutan and the Maldives during the July, 2006-December, 2010 period under the SAFTA arrangement. It exported goods worth $342.87 million to India, $56.39 million to Pakistan and $0.26 million to Sri Lanka during the period. Dr Mostafa Abid Khan told the FE that foreign ministers of the SAARC member countries have said that they will take the steps which are realistic. "It won't be wise to give declaration which is not possible to implement." He said since India has almost removed its sensitive list for the LDCs, pressure is there to do the same by others. "It's not unlikely that the sensitive list can be trim med by phase. Mr Khan said if the private sector supports the move to reduce the sensitive list of items 'we will be able to do so quickly'. "We need to emphasise on the SAFTA's goal of making the regional bloc a free trade area. Let's see how quickly we can achieve it."