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Monday, 26 August 2013 00:10 - - {{hitsCtrl.values.hits}}
Sri Lanka marked yet another milestone in its global trade on 23 August as it arrived at the very frontlines of the 1.6 billion strong markets of emergent South Asian economic union. On 23 August, the country was unanimously elected by SAARC’s top trade decision makers, the SAFTA bloc, to lead them in their first ever open call for stronger private sector involvement in SAFTA’s otherwise state-to-state dominated intra-regional trade.
“We congratulate Sri Lanka and we are confident of successful outcomes in this meeting. I thank Sri Lanka (DoC) for the excellent arrangements made for us and for this SAFTA session. The Government of Sri Lanka deserves profound appreciation for the warm hospitality extended to the visiting SAFTA delegates,” announced SAARC Secretary General Ahmed Salem on 23 August in Colombo, and added: “Trade under SAFTA has crossed $ 2.4 billion. Our request to reduce sensitive lists by at least 20% before the 17th SAARC summit, must have contributed to trade growth in SAARC.”
Salem was addressing the inaugural event of the seventh SAFTA Ministerial Council meeting 2013 held at Cinnamon Grand Hotel, Colombo on 23 August. The SAFTA Ministerial Council Meeting remains the highest decision making body for the effective implementation and administration of the SAFTA concluded in 2004 which came into effect in 2006 in place of the SAPTA. It is estimated that the surging SAFTA market has a huge consumer headcount at 1.6 billion and therefore is ‘highly promising’. Chief amongst the SA markets are India (world’s second most populous nation, 192 million estimated households), Pakistan (world’s sixth most populous nation and second urbanised country in SA, with 28 million estimated households), and Bangladesh (world’s eighth most populous nation with 34 million estimated households). All the delegates at the 23 August Ministerial Council Meeting were united in their calls to exploit South Asia’s strong market potentials, calls for further trade liberalisation, expansion of trade integration across the region and to move forward in the on-going processes with regard to their respective sensitive lists. However the most important development being that for the first time, all members of the SAFTA bloc openly endorsed the role of private sector involvement in SAFTAs future direction.
During the 23 August session, visiting delegates of the SAFTA bloc elected Sri Lanka to Chair the SAFTA Ministerial Council till August 2014 after which Bhutan is scheduled to take over from Sri Lanka. Thus, by virtue of being the Minister of Industry and Commerce of Sri Lanka, Minister Bathiudeen becomes the new Chairperson of SAFTA till August 2014. With the exception of Afghanistan, joining Minister of Industry and Commerce Rishad Bathiudeen, who officially represented Sri Lanka at SAFTA on 23 August at Colombo’s seventh Ministerial Council Meeting were the visiting SAFTA representatives from Bhutan (Minister of Economic Affairs of Bhutan Lyonpo Norbu Wangchuk and officials), Bangladesh (Minister of Commerce of Bangladesh Ghulam Muhammed Quader and officials), India (Joint Secretary of Indian Department of Commerce Arvind Mehta and officials), Maldives (High Commissioner of Maldives to Sri Lanka Hussain Shihab and Maldivian officials), Nepal (Secretary, Ministry of Commerce and Supplies Janardan Nepal and officials), Pakistan (Secretary, Pakistan Commerce Qasim M. Niaz and officials), and Secretary General - SAARC Secretariat Kathmandu Ahmed Saleem).
The 23 August Ministerial session, was preceded by the SAFTA Committee of Experts’ in-depth, face-to-face discussions that began two days earlier on 21 August at Cinnamon Grand, Colombo.
The Lankan team was led by Minister Bathiudeen and consisted of Secretary, Ministry of Industry and Commerce Anura Siriwardena, Director General of Commerce P.D. Fernando, officials of his Ministry and officials from the Department of Commerce, among many others.
Secy. General Salem said: “The 2011 SAARC summit held in Maldives directed the SAFTA Ministerial Council to reduce members’ sensitive lists, resolution of non-tariff barriers, harmonising standards and modernise custom standards. Trade under SAFTA has crossed $ 2.4 billion. Our request to reduce sensitive list by at least 20% before the 17th SAARC summit, must have contributed to trade growth in SAARC. Within South Asia, much larger volumes of trade are taking place outside SAFTA. These are mainly due to the bilateral trade agreements among members. One of the reasons for slow phase of SAFTA is the sensitive lists. A number of suggestions have now been put forward to the council to reduce hindrance to regional trade. To involve the private sector in the SAFTA process, representatives of SAARC Chamber of Commerce and Industry are invited to the special meeting of Committee of Experts on non-tariff and para-tariff measures to present their views and concerns. However SAARC is still often criticised that much more can be done. SAFTA regional trade is still low in comparison to ASEAN and NAFTA. One of the reasons cited is that number of items in region’s sensitive lists of member states are still high, such as agriculture commodities. I am happy to note that the Phase II exercise to reduce sensitive list items and to liberalise trade have been undertaken by member states and two meetings in this regard have already been held.”
“Many pragmatic businessmen will agree with me that it is not the size or length of the negative lists that are negotiated that counts, but whether the products indicated therein are actually “exportable” without the obstruction of NTBs,” said Minister of Industry and Commerce Rishad Baathiudeen, who chaired and moderated the three-hour long closed door session of the Ministerial Council on 23 August. Minister Bathiudeen then commended Sri Lanka’s Department of Commerce for its successful effort in singlehandedly hosting a three-day South Asian event of such a scale in Colombo for the first time.
“I praise my Department of Commerce for making this important three-day regional event a reality. Measures to dismantle all barriers to trade under the South Asian Free Trade Area (SAFTA) Agreement are already underway. Emergence of successful Northern Trade Blocks as NAFTA (North Atlantic Free Trade Arrangement) and EU (European Union) have resulted in marginalisation of the developing countries in global trade. Sri Lanka remains fully committed, confidant and supportive of the objectives of SAFTA. SAFTA is not merely South Asia’s response to the undeniable trend of regionalism. SAFTA is fundamentally important because it gives a cooperative framework for South Asian economic integration. This has undoubted benefits for the region by way of pure economic gains in the form of efficient use of capital, labour, FDI and distribution of goods and services across borders. There could be strategic gains as SAFTA members negotiate multilateral concessions in global fora as a unified group with common interest. Some commendable progress can be observed from the deliberations of the 5th and 6th SAFTA Ministerial Council Meetings held respectively in Maldives in 2011 and in Islamabad in 2012. I am happy to state that we have secured a definite plus with the SAFTA and its stand on NTBs. We must also note that the SAFTA has an important consultation and dispute settlement mechanism in its framework. This is unparalleled in previous FTA’s concluded by countries and the lack of such mechanism had marred their success. The launching of a fresh round of negotiations for further reduction of the number of products in the sensitive lists under SAFTA has proceeded beyond the minimum requirement of 20%. I am happy to note that some members have proposed reductions more than the stipulated requirement. The placing of a ceiling on the sensitive list of SAFTA is therefore a very important development.”
