NTBs & PTBs In SAFTA

By B. Bhattacharyya

Distinguished Professor &Director IILM

SAFTA shall involve the free movement of goods, between countries through, inter alia, the elimination of tariffs, para tariffs and non-tariff restrictions on the movement of goods, and any other equivalent measures;

Article 3 (D)

Article 6

SAFTA may, inter-alia, consist of arrangements relating to:

• Tariffs;

• Para-tariffs;

• Non-tariff measures

• Direct trade measures

Article 7.4

Trade Liberalisation Programme• The Contracting States shall notify the SAARC

Secretariat all non-tariff and para-tariff measures to their trade on an annual basis. The notified measures shall be reviewed by the Committee of Experts, established under Article 10, in its regular meetings to examine their compatibility with relevant WTO provisions. The Committee of Experts shall recommend the elimination or implementation of the measure in the least trade restrictive manner in order to facilitate intra-SAARC trade.

• Contracting Parties shall eliminate all quantitative restrictions, except otherwise permitted under GATT 1994, in respect of products included in the Trade Liberalisation Programme.

Article 7.5

Evaluation

• Provisions on NTBs/PTBs weak

• QR elimination is on but no time limit

• AFTA time limit for these is 5 yrs.

• Database on NTB/PTB weak. So notification system will also be less effective.

• Meeting of COE & SMC was held at Dhaka in April 2006.

• Focus on NTBs. A sub group on NTBs/PTBs formed to identify, review and recommend steps for their removal through both bilateral & regional consultations.

Follow-up pursuant to Article 7.4

Indian perspectives on NTBs

• Kamal Nath in a meeting with Bangladesh. NTBs are there not by design but by default.

• Jairam Ramesh in Dhaka

“We are committed to remaining the NTBs over a period of time. The NTBs will be identified, they will be removed.”

Extent of NTBs in Intra SAFTA Trade

• Hard data on NTBs for this trade segment are scarce.

• A World Bank study shows that QR restrictions had declined in all SAARC countries and are presently insignificant in Pakistan and Sri Lanka

• Intra-SAARC agriculture trade is large and growing. NTBs mostly are pervasive here all over the world. These are also very difficult to identify and remove.

• Trade/industry has an important role to play in identifying non-transparent measures, all of which may not necessarily turn to out to be barriers.

• With gradual shifting of unofficial trade to official trade, the issue of NTBs will become more important, and also visible.

• Cost of compliance will also become higher.

• Will tariff reduction be enough of an incentive?

Way Forward

• Mutual recognition of – Standards– Certification

• Use SAARC Chamber & Associate Chambers for NTB inventory.

• Analyze TRAINS Data and evaluate the extent of barriers at academic level

• Prioritize the NTBs for elimination