Islamabad: Prime Minister Syed Yusuf Raza Gilani has said that SAFTA has the potential to establish a regional bloc with collective goals, and diversified abilities and potential as well as accelerate trade among the member countries.
The Prime Minister was addressing the SAARC Commerce Ministers at PM’s House here today.
Following is the text of speech of the Prime Minister:
“I am pleased to extend all of the distinguished delegates from the SAARC countries a very warm welcome. It is indeed a great pleasure for Pakistan to have the opportunity of hosting the 6th SAFTA Ministerial Council and its earlier meetings.
We are all aware that the signing of the Agreement on South Asian Free Trade Area in January 2006 was a momentous event in the history of SAARC. We have undertaken an initiative, which, I believe, can open up a huge opportunity for achieving much greater economic integration among countries of the region. Regional economic integration, in my view, is the most viable mechanism in the contemporary world.
In this context, I would like to mention that in today’s world every country is struggling to transform the emerging challenges of globalization into opportunities for fostering development and economic prosperity.
Regional trading arrangements are seen as an effective regime to encounter the global challenges through greater economic cooperation and engagement. The emergence of regional groupings across the world in recent times clearly demonstrates the need for forging deeper integration in our region.
Ladies and Gentlemen
It is now widely recognized that regional trade agreements can complement the broader objectives of multilateral trade liberalization processes. A vast majority of existing regional agreements are established among geographical neighbours, as in the case of SAFTA. This is because such proximity provides inherent advantages in terms of greater and faster integration.
SAFTA has also provided us with an enabling institutional framework to increase the existing low levels of intra-SAARC trade – around 5% in comparison to the trade share of the regional trade of the European Union at 67 percent, the North American Free Trade Agreement (NAFTA) at 62 percent and the Association of Southeast Asian Nations (ASEAN) at 26 percent.
The potential benefits of a successful free trade agreement are multiple, and will not be restricted to increased trade alone. In fact it is not an exaggeration that the achievement of the core objectives of SAARC itself – economic growth, social progress and cultural development including the promotion of the welfare of the people of South Asia, will depend, to a great extent, on the economic and other benefits that will result from implementation of SAFTA. It is, therefore, imperative that we build on the momentum by implementing decisions taken by bodies formed under SAFTA.
The establishment of South Asian Free Trade Area depends critically on the ongoing negotiations. There are several vital issues that are to be successfully negotiated within the specified timeframe.
As per Trade Liberalization Programme under SAFTA, the Non-LDCs (Srilanka, India and Pakistan) would reduce their tariff to 0.5% by 2013, whereas the LDCs would reduce tariff to 0.5% by 2016. The SAFTA tariff Liberalization Programme also allows the member states to retain “Sensitive Lists” that are not offered for concessional treatment.
We know that India has two separate Sensitive Lists one for NLDCs and other for LDCs. Since India, Pakistan and Sri Lanka are NLDCs in the region, this makes Indian Sensitive List Pakistan-specific. The Indian Sensitive List for NLDCs has 861 but for LDCs it has only 25 items.
We are also cognizant of the fact that the WTO trading arrangement is based on the principle of MFN, which implies non-discriminatory treatment among the member countries in terms of tariff as well as the number of tariff lines traded between the countries. Pakistan being the signatory to WTO is obliged to observe this principle.
Ladies and Gentlemen
I recognize that the outstanding issues of negotiation are quite complicated and it is not easy to find a common ground for all negotiating parties. Despite such difficulties, we have got to work hard and work in a spirit of goodwill and accommodation, keeping in mind the time limit and the urgency of deepening economic integration in our region. I have full confidence in you and firmly believe that you would be able to conclude the negotiations successfully.
I see SAFTA not only as a regional bloc but also as a union of regional countries with collective goals, common objectives and diversified abilities and potential. Let us harness this diversity into unity and create an enabling environment to put our respective countries on the road of economic development by increased mutual trade and investment.
On behalf of the government of Pakistan, I assure you of our fullest cooperation in our collective march towards prosperity and peace in the region”.
Earlier Commerce Minister, Makhdoom Amin Fahim, in his address said that the major aim of the forum was to promote economic cooperation between the member states. He said that Prime Minister of Pakistan has declared the year 2012 as year of regional trade and economic connectivity.
In his remarks, the Secretary Commerce said that South Asia was the least integrated region in the world in terms of regional trade, while NAFTA, EU and ASEAN countries had a thriving trade among their members.
Present on the occasion were Minister for Commerce Bangladesh, Mr. Ghulam Muhammad Quader, Minister for Economic Affairs Bhutan, Mr. Lyonpo Khandu Wangehuk, Minister for Commerce India, Mr. Anand Sahrma, Minister for Industry and Commerce Nepal, Mr. Lekh Raj Bhutta, Minister for Commerce Sri Lanka, Mr. A Rishad Bathiudeen, Minister for Economic Development Maldives, Ms. Aminath Shausan and Director General Commerce and Industries, Mr. Mozammil Shinwari.
Makhdoom Amin Faheem, Minister for Commerce, Ch Pervez Elahi, Minister for Defence Production and Industries, Dr Abdul Hafeez Sheikh, Advisor to PM on Finance, and other senior officials of relevant ministries represented the Pakistani side.
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