Saarc moots trade treaty in services

In a significant move, Saarc foreign ministers today proposed an agreement on trade in services among the member countries.

"The proposal is to look at both the options: to make it a part of Safta or negotiate a separate agreement in trade in services," Foreign Secretary Shiv Shankar Menon said.

The Council of Ministers, which met prior to the Saarc Summit beginning tomorrow, decided to explore the possibility of such a pact in view of the growing role of services in economies of the region.

In India, services contribute 56 per cent of Gross Domestic Product. Even in countries like Pakistan, Sri Lanka and Maldives, services such as tourism, banking, telecom and financial sector are becoming an important engine of growth.

With inclusion of services, the overall trade in the region is expected to increase from the present level of mere $7 billion. Menon said the council had "different views whether or not Pakistan is in compliance with Safta". He said the discussions would continue and ministerial process had been asked to work in this direction.

Safta, which became operational from July 2006, has failed to make much of an impact because Pakistan continues to deny market access to India and meet its obligation. Pakistan has also alleged its goods face non-tariff barriers in India.

Menon also announced today that India and Pakistan may have a common map for Sir Creek, thereby signalling that this particular conflict between the countries sees an end in sight.

Menon also confirmed that defence secretaries of the two countries would be meeting on April 6 in Islamabad to discuss the more intractable issue of the Siachen glacier. Giving no other details on this meeting, Menon signalled that the government had adopted a more cautious approach on the issue.