The proposed South Asia Free Trade Agreement (SAFTA) among Saarc members is likely to adopt a 40 per cent value-addition norm under the rules of origin coupled with the change in the four-digit tariff heading. | |
| This is meant to check circumvention of imports from a third country. All countries barring Nepal have agreed to these norms. |
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| "Nepal is keen to have 20 per cent value-addition with a special derogation for some products along with change in the four-digit tariff heading. It has been asked to submit its list of products for special derogation by August 10," an official told Business Standard. |
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| Officials said all issues pertaining to the rules of origin for the proposed SAFTA is expected to be sorted out in the next meeting of the committee of experts to be held on August 31. "We are hopeful that the ministerial level meeting to formalise SAFTA will be held in December," they said. |
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| A recent study for the Saarc countries, commissioned to the Research and Information Systems (RIS), had concluded that a change in tariff heading in the four-digit level was not possible in the case of 954 products. |
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| Officials said a mechanism to compensate least developing countries in the region for revenue losses because of the they being asked to reduce their Customs tariff would also be finalised by the next meeting. |
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| While one proposal has been submitted by India and Pakistan, another has been submitted by least developing countries (LDC) in the region.An LDC will be deemed to have suffered losses if Customs revenue from import of goods benefiting from tariff concessions provided under SAFTA during a calendar year is less than what will have accrued to the country without concessions. |
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| The proposal submitted by India and Pakistan will take into account the growth rate of Customs revenue on non-sensitive items and also the increase in exports while calculating the losses. |
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| Officials said that both India and Pakistan felt that there should be a clearly-defined sunset clause for compensating revenue loss. FRIENDS IN NEED
- All countries except Nepal to adopt 40 per cent value addition norm under the rules of origin.
- Nepal to have 20 per cent value addition with a special derogation for some products.
- Rules of origin to be sorted out in the next meeting of the committee of experts to be held on August 31.
- To finalise a mechanism to compensate least developing countries for revenue losses because of reduction in their Customs tariff.
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