South Asia Trade Needs Political Talks

Nihal Rodrigo is secretary-general of the secretariat of the South Asian Association of Regional Cooperation (Saarc). He is trying to steer his organisation through difficult times. The war at Kargil and the subsequent military coup in Pakistan led India to refuse to countenance a Saarc summit meeting which would provide legitimacy to a military ruler. As a result, some promising programmes which Saarc had launched, including a customs union and free trade, have run into trouble. However, Rodrigo, who is one of Sri Lanka's most senior bureaucrats, believes Saarc can achieve a lot if politics continues to be kept out. Excerpts from an interview with Aditi

 

Q. There are predictions about Saarc having outlived its utility in the wake of the cancellation of the Kathmandu summit. Do you agree that Saarc is all but dead ?

A. One cancelled summit does not pose impediments to the non-political work of Saarc. In any case, the thrust of Saarc has been increasingly economic, not political.

But having said that, it is true that detailed negotiations, for instance in the area of the South Asia Free Trade Agreements, do need political discussion. Those agreements have been held back.

One set of official-level meetings for the Safta was to be held in Kathmandu in June. It has now been postponed. It has to admitted, however, that Saarc is slowing down. But I am optimistic. Things will get worked out.

If the meeting of Saarc foreign secretaries had been held, things could have been thrashed out. But India's position is that foreign secretary is a political person, because the pecking order is: Meetings of foreign secretaries lead to meetings of the council of ministers and later, summit meetings.

There is to be a meeting of environment ministers in Bhutan. Bangladesh is holding a meeting on energy. Things are moving.

There is also some movement on the Social Charter, social problems in the regional framework.

Q. Why have things slowed down?

A. One reason is there are no institutional measures to push things along. Safta has been negotiated at the level of the bureaucracy. I'm not trying to blame anyone, but summits need to take these issues into account.

As a result, Safta is still grappling with basic issues. For instance, how do you deal with Bangladesh (a least developed country, according to the definition of the World Bank) and Maldives, which call themselves `small' countries and demand preferential treatment and protection because they are small?

While the WTO could consider recognising a least developed country (LDC), would it recognise a new entity called a `small' country? So, even if Safta agrees to recognise smallness as a criterion for trade barriers, would this pass muster with the WTO?

There is the issue of bilateral Free Trade Agreements. India has bilateral FTAs with Bhutan and Nepal, and now with Sri Lanka. India says it will need three years to remove tariff barriers, while Sri Lanka says it will require eight. How will trade in the interim period be harmonised ?

Also, the issue of bilateral agreements in a multilateral setting. If India reaches bilateral trade arrangements with several countries, what will remain in the basket of products for multilateral trade?

Another contentious issue is the Rules of Origin. If the Maldivians get a Japanese canning company to sell tinned Maldivian tuna, how will you identify the Maldivian content in the tuna?

India is formulating a working paper on Rules of Origin. This is one of the casualties of not holding meetings. If there are some small differences on the matter, these can be sorted out in a face-to-face encounter. But it is difficult to do it by bureaucratic correspondence.

Q. Is there any possibility of the evolution of a common Saarc position on regional security?

A. Not if it comes under the loose rubric of a bilateral or a political issue, because the Saarc charter debars discussions on bilateral or political issues.

However, if it is not obviously political, everyone can (and actually has, in the past) have a common position on issues like terrorism and disarmament.

Though it is true that Bangladesh and Pakistan have not ratified the terrorism convention, they have helped in evolving a common Saarc position on regional security.

As an example, in 1998, shortly after the Indo-Pakistan nuclear tests, a resolution was brought in the UN by some developed countries condemning the two countries for the tests. As Sri Lanka appreciated the two nation's security concerns, it proposed an amendment. At that time, Sri Lanka was the chairperson of Saarc. So, it undertook to talk to other Saarc countries and its amendment was tabled as a South Asian position. This is an example of the type or coordination possible even in the intense situation after the tests.

It is another matter that the amendment was not put to vote. There was a No Action Motion which got a few votes. But even on a sensitive issue like nuclear tests, the action illustrated the type of coordination that is possible.

Q. Is there any evidence of this kind of cooperation in multilateral economic negotiations?

A. It is increasingly being recognised that the Saarc countries have been unprofessional on pushing the Saarc view of economic issues at multinational fora. There is a paucity of legal and technical specialisation in an area which is extremely complex. So, when we had the idea of pooling expertise, two meeting of commerce secretaries took place. This was followed by a meeting on commerce ministers. There was strong agreement on general positions, though the details eluded consensus.

On child labour, for instance, it was agreed that while many of the Saarc countries were not affected by this issue, they should not become barriers to trade.

Then on the issue of patents and biodiversity, we discussed how we could protect practices which our villagers had been following for years and which were in danger of being patented by others. We decided to set up a network of research on economic issues in different areas.

The most important thing is the recognition that on issues like IPRs, there is more scope of pooling resources and sharing expertise regionally than there is individually.

On international finance, chairmen of central banks in South Asia have decided to meet regularly to devise a strategy for the IMF and World Bank. At the macro level, we now have coordination of banking laws. This will lead to greater investments in Saarc member countries and thus, an intensification of trade. There must be some consultation among the Saarc countries so that there is more rational pursuit of FDI. All these are issues outside the political arena.

Also, there is scope for bodies of professionals to devise one Saarc position. Take the master printers. They have got together and formed their own Saarc association. The same goes for architects and university women. All this leads to more interaction, more conversation and the forming of pressure groups which put pressure on their own countries.

Recently, we had a meeting of chief election commissioners of the Saarc countries. They evolved guidelines for conduct of elections. Maybe Saarc can develop one model of holding free and fair elections which can be applied to all countries.

I'm happy that a lot of inputs are provided by the Saarc chambers of commerce. So long as these arrangements are in place, Saarc can never really die.