A two-day meeting of the SAARC commerce secretaries held to finalize the South Asian Free Trade Agreement (SAFTA) ended in a deadlock Wednesday after four Least Developed Countries (LDCs) of the region – Bhutan, Bangladesh, Maldives and Nepal — demanded to address their concerns first, agencies reported from Islamabad Thursday.

According to the online edition of Daily Times, a consensus could not be evolved on SAFTA Treaty during the meeting of the SAARC commerce secretaries as the four LDCs opposed the Treaty, saying, it would be detrimental to their relatively small economies.

The four nations took the plea that their exports were not up to the mark and volume of their respective imports are already very high, the Times quoted an official, who attended the two-day meeting, as saying.

The official quoted the LDC states as saying that they oppose the SAFTA Treaty because if it is implemented then their respective economies would be destroyed as their local industry is already suffering, the Times said.

“They further said that incase of SAFTA, they would have to rely only on imports which are already very high and the local production would be affected severely,” the official said.

Fazeel Najeeb, director trade policy division of Maldives said that Maldives already depends on the imports and it has only the fish and tourism industry, according to the news report. “They also have no infrastructure and required raw material to set up any industrial city,” he said. SAFTA would further increase the imports and destroy their fish industry, the report said.

Official source said that Bangladesh also remained very vocal amongst the LDC states and vehemently opposed the SAFTA, saying that the protection to their local industries would go if SAFTA was implemented. Least developed nations demanded special and differential treatment to safeguard their economies, the report further quoted him, as saying.

Developed contracting states including India, Pakistan and Sri Lanka were in favor of SAFTA, but the draft for SAFTA can only be implemented if all the SAARC courtiers agreed to it, the official said, according to the report.

”But the official said there is a proposal to hold a SAARC ministerial meeting to develop consensus on a draft SAFTA treaty prior to the initiation of SARRC, which will be held on January 4 at Islamabad. He said that opinions were diverse about the modus operandi of reducing the tariff barriers among the SAARC states.”

Official sources said that SAARC countries have already developed consensus on some of the key issues in the last meeting of the committee of experts held in Katmandu, said the report.

Under the consensus decisions made so far, the tariff reduction by non-LDC states from existing tariff rates to 20 percent would be done within two years after SAFTA is signed; tariff reduction of LDC by 30 percent would be made in two years period, subsequent tariff reduction by non-LDC from 20 percent or below to 0-5 percent would be done in two years, and subsequent tariff reduction by LDC from 30 percent or blow to 0-5 percent in the same period, it added. nepalnews.com mr Dec 25