950829

India stresses regional

trade pact to combat

with developed nations

NEW DELHI: Indian Foreign Minister Pranab Mukherjee said on Tuesday a trade pact among the nations of South Asia would help the region strengthen its bargaining power with developed countries.

"Serious attempts are being made to raise non-tariff barriers under the World Trade organisation (WTO). We can resist these if we take advantage of regional trade," Mukherjee told a business seminar.

He said South Asian nations, comprising India, Nepal, Bhutan, Bangladesh, Sri Lanka, the Maldives and Pakistan, had a market of 1.2 billion people and contained a powerhouse of skilled and unskilled labour.

"If we can pool these resources, the ultimate objective being a free-trade zone, and join the countries into one entity, our bargaining power with the developed world will increase considerably," the minister said.

The seven nations, who form the South Asian Association for Regional Cooperation (Saarc), have already agreed to reduce tariffs among the bloc under the South Asian Preferential Trade Arrangement (Sapta), Mukherjee said.

"The Social Clause, child labour clauses, the environment - all these are used by developed countries to restrict goods from developing countries," the minister said.

Developed nations want the WTO to set new rules which include allowing trade privileges to be withheld from developing countries that exploit children or other workers, or fail to adopt strict anti-pollution rules.

Developing countries like India have repeatedly argued that strict interpretation of these laws would deprive low-wage nations of a valuable trade advantage.

India, which ratified SAPTA last week, was the fifth SAARC nation to accede to the pact. Officials said Bangladesh and Pakistan were expected to ratify it shortly, and the treaty would come into effect from November 8.

But trade with Pakistan, remains a sticking point in the treaty's implementation.

"Europe is now dominated by a common currency, a common market among countries who were locked in fratricidal conflicts for centuries," Mukherjee said. "If they can do it, why can't we?"

Trade among Saarc countries amounts to less than three percent of the region's total trade. Most of the 106 items on which India offered concessional tariffs under SAPTA would now be traded at at least half the normal rates, the minister said.

"We would like to legalise informal border trade and smuggling," Mukherjee said. "We must exploit the full potential of economic cooperation. The time has come to concentrate on building on our tremendous human and material resources."-Reuter