Tuesday, May 21, 2013

Participatory approach to address Non-Tariff Barriers in Regional Trade

Majyd Aziz


On April 11 and 12, 2013, CUTS International, an Indian think-tank headquartered in Jaipur, organized a couple of day-long conferences in New Delhi with support of Asia Foundation and AusAid. The program was to, firstly, promote a participatory approach to address non-tariff trade barriers in South Asian regional trade and, secondly, to achieve consensus on South Asian regional integration and connectivity. CUTS had assembled focused participants to discuss, deliberate, and endorse the Business Plan and South Asia Regional Economic Integration Strategy that were presented at the two conferences. The eight-member Pakistani delegation consisted of two representatives of Sustainable Development Policy Institute, two from Ministry of Commerce, two from NGOs, one from media, and the writer who represented trade and industry and leading the delegation.

Intra SAARC Trade is Indo-Pak Centric:

Liberalization of trade and investment, especially with reference to SAARC countries, is primarily focused on Indo-Pakistan bilateral relations and therefore assumes substantial importance whenever regional economic integration is deliberated within SAARC. Trade and investment liberalization within the Indo-Pakistan context was, is, and would generally be a very delicate affair since this process is susceptible to non-trade factors that hold its progress hostage.
Indo-Pakistan trade policy decisions have had a roller-coaster ride in the last two years. The process that melted the ice began in Islamabad in April 2011 when the two erstwhile Commerce Secretaries met and agreed to a joint declaration. Over the past two years, atleast fifteen initiatives have been undertaken by both countries and these have led to an upsurge in trade figures.

Trade and investment process between India and Pakistan has to maintain its own sustainability inspite of a high-low scenario where external factors impede as well as make the progress regressive at certain times. Be it military skirmishes at the border, be it hyper-brouhaha of hardliners, or be it the dastardly misguided actions of extremists and perpetrators of terrorism, trade between India and Pakistan would remain captive to them and the events. The recent jingoistic statements, allegations of beheading of captured troops, and the recent gruesome and fatal attacks on high profile prisoners in jails have muddied the environment and may affect the trade process.

However, acceding to these hindrances or resigning to these compelling reasons would throw the liberalization course back to the dark ages and hand a victory on a silver platter to those very forces that do not appreciate a conducive and peaceful environment. Therefore, in all sincerity, it is incumbent upon the stakeholders, such as business community, media, scholars, non-governmental organizations, etc, not only in the two large South Asian neighbors, but even those in other SAARC countries, to promote the need for India and Pakistan to go with full force towards liberalization of trade and investment. This would, of course, also motivate citizens of these other SAARC countries to endorse and promote the concept of regional economic integration and, at the same pace, providing the foundation to make SAARC a strong, meaningful, and effective organizational entity.

Notwithstanding the desire of stakeholders to enhance trade and investment within the region, the bare fact is that there are plenty of other roadblocks that have hampered smooth progress and continued to provide an element of doubt and distrust. The most vitiating blockade is the blatant implementation of Non-Tariff Trade Barriers. Today, while everyone talks of liberalization of trade, free trade agreements, preferential treatment, and establishing trade blocs, the fact of the matter is that new NTBs are being regularly invented by various countries. As tariffs go down or become zero-rated, NTBs become more prominent and prove to be largest impediments to trade. Where there were once barriers at the borders, now NTBs have become non-border barriers.

The role of SAARC becomes very important as this organization is the natural candidate as a focal point among member countries. The primary factor that can unite South Asia is trade and movement of business people and strong bonding between the business communities of member countries.

The perpetual faithfulness to discriminatory applications of rules, regulations and laws have provided ammunition to the adversaries and opponents of free trade to strongly agitate any relaxation in the trade policies, for example, Pakistan granting Most Favored Nation status to India inspite of the Pakistani Federal Cabinet’s decision in April 2012 to do so from January 01, 2013.

Institutional Mechanism:

There is an imperative need to, first and foremost, recognize that Track II approach is workable and practical. The main advantage of this process is that all interlocutors at various fora are serious and are more or less on the same page on most of the contentious issues or on the methodology and procedure of addressing these issues. There is seldom any sense of a pejorative situation and the feeling of vacuity seems to have evaporated.  This mode is not limited to prime stakeholders such as trade and industry or even those in arts and culture, media, social workers, think tanks, or even those who at one time or another were involved in policymaking.

It is therefore in the best scheme of things that an institutionalized mechanism should be developed to coordinate with all stakeholders and to set in motion a process to disseminate data and input through a centralized clearing house. The major reason for this approach is that a formidable movement can be evolved that would possess the critical mass to convince the policymakers, the naysayers, and the hardliners that progress towards liberalization of trade, that progress towards overall peace, and that progress towards bettering the lives of the people in the region could be possible for the mutual long term benefit of the region. In fact, SAARC should set up a Council for NTBs if SAFTA is to become a reality.

Notwithstanding this optimistic outlook, the fact of the matter is that citizens in each country must also play their constitutional and fundamental role in boosting the morale of those who are out to achieve the desired objectives of peace, harmony, and better quality of life. American tycoon Henry Ford very wisely stated that “coming together is a beginning, keeping together is progress, and working together is success.” 

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