“India should focus more sharply to advance trade relations with neighboring countries in South Asia”, said Arvind Mehta, Joint secretary (SAARC Division), Department of Commerce, Government of India. He was speaking at an interactive meeting among public officials and private sector representatives on removal and/or harmonisation of non-tariff barriers to trade in South Asia. He said that specific policy proposals should emerge from think tanks in order to initiate actions that results in growth of regional trade. The meeting was organized in New Delhi on 19th March 2013, jointly by CUTS International, Federation of Indian Export Organization (FIEO) as part of a regional project supported by The Asia Foundation.
Satish Kumar Reddy, Director, Ministry of Finance, Government of India said that the high potential for intra-regional trade in South Asia is well recognised. While long gestation projects like Integrated Check Posts at land customs stations are being undertaken by the government, procedural problems and their solutions should be explored simultaneously.
Ajay Sahai, Director General and CEO of FIEO mentioned that non-tariff barriers have emerged as the principal challenge after the reduction of tariff barriers and quotas. Taking the example of deliberations at the G-20 and other such forums, he said that though there have been statements made by world leaders, committing to trade reforms for removing NTBs, protectionist tendencies in developed and emerging market economies have been on the rise. Given that India’s trade with regional trading partners has grown faster than with other countries, more should be done to deepen regional trade integration.
Presenting the policy suggestions emerging from CUTS study on non-tariff barriers affecting South Asian trade, Bipul Chatterjee, Deputy Executive Director of CUTS said, it is time for trade and business associations in the region to take initiatives and proactively engage in the process of trade reforms, supporting governmental efforts. Such a participatory approach will help to identify the most problematic trade barriers and prioritise reform measures in a better way.
In recent times, both at the multilateral level and at the regional level, a realisation has emerged that without direct involvement of business, it is impossible to effectively carry forward the agenda of NTB reforms. In some regional context, like at the COMESA (Common Market for Eastern and Southern Africa) and ASEAN (Association of South East Asian Nations), there exists consultative mechanism, in which business organisations support governmental initiatives to plan and implement measures to remove/harmonise NTBs. These initiatives have generated positive results.
The CUTS study shows that improvement in trade conditions in the region through NTB reforms can reduce trade costs by up to 27 per cent of import value. This will generate annual benefit worth more than US$ 4 billion. If such incremental reform measures are sustained, intra-regional trade can rise sharply, from less than 5 per cent to 15 per cent of total trade of South Asian countries, within a span of next five to seven years.
As part of its initiatives on South Asian regional economic integration, CUTS, with support from The Asia Foundation, is organising a regional conference on 11th April in New Delhi to discuss a business plan for future interventions to remove and/or harmonise non-tariff barriers hindering intra-regional trade. Representatives from governments and business/trade organisations from all South Asian countries will discuss the contours of a participatory approach to NTB reforms in South Asia.
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