ISLAMABAD: Despite its ratification of the South Asian Free Trade Agreement (SAFTA), Pakistan has said it will not allow import of items from India other than the 773 permitted under the `positive list' for bilateral trade."We would continue our bilateral trade through 773 items. Those products which are not included in the positive list would not be allowed to be imported under the SAFTA," the English daily, Dawn, quoted Commerce Minister Humayun Akhtar Khan as saying.

No reciprocal gesture

While India conferred the most favoured nation (MFN) status on Pakistan for trade, Islamabad has not reciprocated the gesture. It said full trade relations between the countries were not possible without a resolution of the Kashmir issue.

On Wednesday, the Pakistan Cabinet ratified the SAFTA, which was agreed on among the South Asian countries at the 12th SAARC Summit held here in January 2004. The delay in ratification was attributed to differences within the Government over the advisability of implementation of the SAFTA without a resolution of the Kashmir issue.

The SAFTA is an approved pact of the SAARC and no member-country could impose conditionalities for implementing it. Under the agreement, the seven-member countries will bring down tariffs on a whole range of products to 0-5 per cent within an agreed time frame to increase the volume of regional trade.

It will be difficult for Pakistan to defend tariff restrictions if India challenges them before the dispute settlement mechanism of the SAARC Secretariat.

The SAFTA contains annexes of items — one for reduction in duties during a specified period for the least developed countries including Bangladesh, Nepal, Bhutan and Maldives, while there is a list of items for duty reduction for non-LDCs, India, Pakistan and Sri Lanka.

Sensitive list

There is another list of sensitive items including 20-22 per cent products of tariff lines of the member-countries. These items are not allowed duty reduction. This means trade in these items will be allowed among the member-countries on normal duties and will not be banned.

In the case of India, the Minister said the approach of sensitive list would not apply at the moment. "The products, which are committed under the lists for duty reduction but are not part of the positive list, would not be considered even for trade." The number of items on the positive list could be increased later, after progress on other issues.

Mr. Khan said his country would not grant the MFN status to India until a move was made in tandem on other bilateral issues, particularly Kashmir. "The implementation of SAFTA could not bind us to grant the MFN status to India until bilateral issues are resolved amicably."

There were some provisions in the WTO, which allowed the member-countries the cushion of not granting the MFN status to any country for some peculiar reasons, the Minister said.

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