Addressing the first SAARC Finance Ministers' meeting in New Delhi, Minister of State for Finance Pawan Kumar Bansal also highlighted the need for combating terrorism collectively as also curbing cross-border terrorism to promote peace and security in the region.
Pakistan's move to limit trade to a few items with India under SAFTA contradicted the decision taken at the 13th SAARC summit in Dhaka last year which called for timely implementation of SAFTA, he told the meet inaugurated by Pakistan Prime Minister Shaukat Aziz.
The free trade agreement became operational from July 1. Bansal said India was "surprised" to see Pakistan's notification issued on July 1 stating that SAFTA tariff concessions for India would be on 773 items existing in bilateral "positive list."
"We regard this action as going against the very essence of SAFTA as it operated on the basis of agreed sensitive lists. SAFTA has little operational meaning if commitments are not honoured in letter and spirit," he said.
He said Pakistan's decision to introduce conditionalties could undermine the credibility of SAARC members.
"The credibility of the participating member countries and SAFTA itself will be seriously questioned if additional conditionalties are introduced that were neither discussed nor agreed when SAFTA was being negotiated. Such condiationalities would be a derogation from SAFTA agreement. It would also contradict the commitment made by leaders of the 13th SAARC summit," Bansal said.
"In view of the serious impact this decision of Pakistan likely to have on the implementation of SAFTA, we have asked for an urgent meeting of the SAFTA Ministerial Council (which is comprised of Commerce Ministers of SAARC countries).
"We therefore hope that this issue would be resolved at the earliest so that SAFTA is implemented in the spirit it was negotiated with all parties living up to the commitments they have solemnly undertaken," Bansal said.
He also referred to the need to curb cross-border terrorism to promote peace and security in the region. Noting the major theme of the Dhaka SAARC summit in which terrorism was condemned in strong terms, Bansal said there can also be no double standards in tackling this "collective challenge."
He said the effective implementation of the convention on suppression of terrorism, signed by the SAARC Home Ministers this year, and the additional protocol on terrorism will help to collectively tackle the problem of terrorism.
Besides, he said studies have shown that trade and business, specially from smaller countries, expected to be the biggest beneficiaries of SAFTA.
"Intra-regional trade will receive a big boost and can become a major engine of growth, development and stability in the region. A successful implementation of SAFTA will also catalyse other areas of regional economic integration."
