India may freeze Safta
By agencies   |   Friday, 01 September 2006, 19:30 IST
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NEW DELHI: India is thinking of suspending all trade concessions under the South Asian Free Trade Area (Safta) pact till Pakistan abides by market access commitments in the agreement, a leading business daily said. According to news in the Economic Times, if India goes ahead, Safta could plunge into a crisis, and resurrecting the trade pact would become virtually impossible. Sections within the government, especially the ministry of external affairs, are so upset with Pakistan that they want Safta to be grounded till the neighbor falls in line. Islamabad has been resisting the MFN status to India and market access for Indian products. Deviating from Safta, Pakistan maintains its own list of exports from India. It also denies Indian exporters the land route, the paper said. Government sources confirmed the growing resentment within the government over Pakistan’s attitude. The external affairs ministry has also suggested that India should withhold the next phase of concessions under Safta’s trade liberalization program (TLP) due in December 2006. The Economic Times said the Prime Minister’s Trade & Economic Relations Committee (TERC), which recently considered the two options, also looked at a third option of keeping in abeyance TLP concessions to Pakistan. As the commerce & industry ministry is not in favor retaliation at this stage, India might wait for the October meeting of the Safta ministerial council before rocking the boat. In the past too, the commerce & industry ministry had desisted from retaliation and Pakistan has not been dragging to World Trade Organization (WTO) so far for denying MFN status to India. However, the external affairs ministry’s stand would mean that the going might not be smooth for Pakistan any more, the paper said.