Tariffs on 4,649 items to be cut under Safta

ISLAMABAD: Pakistan will bring down import tariffs on 4,649 items under Trade Liberalisation Programme (TLP) of South Asia Free Trade Area (Safta) agreement on Dec 31, 2009, officials of the commerce ministry said.
 
According to the details of agreement, by the end of current calendar year Pakistan will reduce import tariff to 5 per cent on 2,354 items, 5.12 per cent on 15 items, 5.36 per cent on 59 items, 6.8 per cent on 757 items, 8.72 per cent on 62 items, 9.2 per cent on 16 items and import tariff will be reduced on 1,389 items to 14 per cent, which is the maximum level.


The ministry officials said that it was agreed in 2006 when Safta was signed that all the member countries would gradually reduce import tariffs for increasing regional trade in South Asia.

Sources said that the tariffs reduction would be applicable to 4,649 items being imported from Sri Lanka, Bangladesh, Nepal, Bhutan and Maldives, while the tariff reduction under TLP would be applicable only to 1,939 items being imported from India, which are in the positive list.

Despite signing of Safta bilateral trade between Pakistan and India is based on the positive list regime, mainly due to political issues between them, the officials said.

Sources said that commerce ministries of the Saarc nations have decided that the deadline for the implementation of tariff reduction regime should be reduced by two years to create a competitive business environment in the region.

The official said that it had been proposed that for the Non-Least Developed countries like Pakistan, Sri Lanka and India should complete their trade liberalisation programme well ahead of schedule by 2010 instead of the actual deadline of 2012.

This would mean bringing down maximum import tariffs by Non-LDCs between zero to 5 per cent by 2010 instead of 2012,’ the official said adding that the LDCs such as Bangladesh, Nepal, Bhutan and Maldives have been given the margin to bring down their tariffs to zero to 5 per cent by the year 2015.

The official said that the move would also speedup the process towards the implementation of Free Trade Agreement (FTA) in South Asia.

‘We have to be ready for the WTO regime and protection based on higher import tariff would never allow local industries and the service sector to develop innovation,’ the official said.

He added that the Safta committee of experts comprising senior trade officials from Saarc member countries will make a decision in next two months for an early completion of trade liberalisation programme.

‘The proposal would be taken up at the committee of experts (COE) meeting scheduled to be held in Kathmandu in January next.’

Sources said that there was also a proposal under consideration at COE level that members should reduce their sensitive lists by 20 per cent ahead of schedule so that real trade liberalisation regime could be implemented in South Asia.