India Ratifies Regional Services Deal, Urges Others
Sunday, 19 September 2010

India has ratified the SAARC Agreement on Trade in Services and called upon other members of the South Asian bloc to do the same at the earliest to boost economic cooperation.

India's external affairs minister S M Krishna said that services trade should strengthen the region's economic cooperation further by expanding intra-regional investment and production opportunities.

"I am glad to inform that India has very recently ratified this agreement and I hope that the early ratification of this agreement by other member states will give a boost to realising the full potential of trade in services in the region," said Krishna.

The services trade agreement was signed by the foreign ministers of the eight SAARC countries at the Thimphu summit in April this year.

Krishna announced New Delhi's ratification of the agreement while delivering the inaugural speech in a conference held to mark the 25th anniversary of SAARC.

The SAARC members had inked a South Asian Free Trade Agreement (SAFTA) in 2004 during their 12th summit in Islamabad in 2004 and it came into effect in 2006.

But SAFTA did not cover trade in services. The SAARC members had over the past few years been negotiating a trade in services agreement, which was finally inked in Thimphu.

"As per the SAARC Charter of 1985," said Krishna, "a fundamental objective of SAARC is to promote the welfare of the peoples of South Asia and to improve their quality of life."

"To achieve this objective, a key strategy adopted has been to work towards enabling freer movement of goods and services. The implementation of the SAFTA in 2006 was a significant milestone in this effort. Intra-regional trade in South Asia has begun to grow and has doubled over the past five years," he said.

Noting that there are varying estimates of intra-SAARC trade volume, Krishna said that it would be fair to assume that the figure touched close to $550 million in 2009, increasing from just $10 million in 2006 when SAFTA had come into force.

"What is also significant is that intra-SAARC exports, as a proportion of total SAARC exports, have more than doubled in these last 25 years. This reflects the growing importance of the region for the overall trade of its member states," he added.

The Indian external affairs minister said that there was considerably greater potential to increase the share of intra-regional trade and investment flows as has been witnessed in East and South East Asia.

"It is time that the South Asian region takes adequate cognisance of the economies of the neighbourhood just as different regions across the world have adopted the strategy of regional economic integration to exploit the synergies for mutual benefit in a balanced and equitable manner," he said.

SAARC is also working to rectify some 'technical flaws' in SAFTA and to smoothen its implementation and set up a region-wide trade facilitation regime. "In the last couple of meetings of the SAFTA Committee of Experts, we have been focusing on reducing the large size of sensitive lists under SAFTA. We have urged the committee to focus on taking those products out of the list that have high regional tradability," said the SAARC secretary general Sheel Kant Sharma.

Sharma said that efforts were on to bring a larger percentage of goods under the regional preferential trading regime. SAARC had asked its member countries to accelerate their trade liberalisation programmes.

Efforts were also on to "get rid of high walls" of non-tariff and para-tariff barriers, which added to the already high costs of trade in South Asia, he added.

Source: bdnews24.com

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