SAFTA Conference
Mumbai, India Hotel Taj Mahal Palace and Towers, February 1, 2006

Conference Report

Session 1. Welcome, Introduction, Conference Overview Shahid Javed Burki, James Robertson, James L. Walker
	The speakers focused on issues that should concern policymakers as they prepare SAARC countries for the launch of the SAFTA agreement. Under the study discussed, authors of the country studies reached a number of conclusions; the most important are as follows: (a) member governments have focused too much on protecting their economies by drawing up highly restrictive "sensitive lists" and being very conservative in formulating rules of origin; (b) not enough attention has been paid to trade facilitation measures that will do more to increase intraregional trade than reducing tariff rates; (c) the agreement should cover other areas of cooperation, in particular cross-border investment; and (d) the timetable for full implementation of the proposed tariff cuts needs to be accelerated.
Session 2. Economic growth for South Asia Amir Ullah Khan
This session focused on (a) the reform experiences in South Asia and how lessons from that experience can be incorporated into the SAFTA framework; and (b) the likely impact on economies of the region following a freeing up of regional trade . Presentation 1
Session 3. India, Pakistan and Afghanistan Harsh Vivek
This session focused on India's trade with Pakistan, transit rights for trade with Afghanistan, new avenues for trade, tariff and non tariff issues and the potential for such trade. Presentation 2
Session 4. Discussion
A healthy discussion followed with inputs from leading industry representatives talking of the need to remove barriers to trade.

Shahid Javed Burki
Team Leader & Pakistan Expert, Nathan Associates Inc.

Mr. S. J. Burki is a macroeconomist with more than 40 years experience in economic development issues. He is serving as the Team Leader and Pakistan Country Expert for the USAID-funded SAFTA Collaboration Project, implemented by Nathan Associates, via the Trade Capacity Building Project. Mr. Burki's distinguished career includes service as Chairman of EMP an investment bank focused on Pakistan. In addition, he has held a variety of senior positions at the World Bank, including Vice President for Latin America (1994-1999), and Country Director for China. Mr. Burki has also served as Finance Minister in Pakistan. He began his career in 1960 with the Civil Service of Pakistan after completing a Rhodes Scholarship. He completed his coursework at Harvard University toward a Ph.D. in economics; holds an MA in Economics from Oxford University, and a MPF from the Kennedy School of Government at Harvard University. Mr. Burki is the author of numerous books and articles on a wide variety of topics concerning economic development in Pakistan.

James Robertson
Regional Trade Expert, Nathan Associates Inc.

James Robertson is an applied economist, currently based in Sri Lanka, with more than 25 years of practical experience working closely with policy makers in developing countries to promote increased economic growth and development of trade and industry. Mr. Robertson has served as a long-term advisor to senior policy makers. His repertoire includes assisting with the development and implementation of a comprehensive economic reform program in Sri Lanka and advising the Minister of Commerce in Cambodia on a strategy for entry to the ASEAN Free Trade Area. Mr. Robertson has extensive analytical experience analyzing international trade issues. Some of the specific topics that he has addressed have been: the estimation of nominal and effective rates of protection and effective tax rates for agricultural and industrial activities, the analysis of patterns of comparative advantage, the assessment of the costs, benefits, and processes for integration into multi-country trade blocs, the preparation of detailed programs for reductions in tariff rates and non-tariff barriers, and the analysis of the regional patterns of industrial activity. Mr. Robertson holds an M.A. in Economics from The John Hopkins University.

James L. Walker
Senior Economic Advisor, USAID Bureau for Asia and Near East, and SAFTA Project Coordinator

A development economist with over 25 years of advisory and management experience with the U.S. Agency for International Development and Nathan Associates, Inc., including in Bangladesh, Egypt, Sri Lanka, Indonesia, Philippines, Thailand, Viet Nam, East Timor, and West Bank Gaza. Mr. Walker's assignments have included evaluating fiscal and trade reforms in Egypt and Indonesia, directing tariff liberalization research in Egypt, managing competitiveness development activities in Sri Lanka, and designing comprehensive policy reform projects in Indonesia and the Philippines. In addition to his international development work, Mr. Walker had 10 years of research and teaching experience at universities in the United States. His economics training includes a Ph.D. from the University of Texas at Austin and a M.A. from UCLA.

Amir Ullah Khan
Fellow, India Development Foundation

Dr. Amir Ullah Khan graduated from the Department of Electronics and Communication Engineering at Osmania University, Hyderabad. He then studied management at the Institute of Rural Management, Anand (IRMA). He did his doctorate on 'Intellectual Property Issues in International Trade'. In 1993, he joined the Indian Civil Services after which he worked for four years with the United Nations Development Programme (UNDP). He has several years of academic experience at the Indian School of Finance and Management, where he taught economics and management at the chapters of the School in New Delhi, Madras and London. Subsequently, he worked as the Executive Director and Editor, Encyclopaedia Britannica (India). He is a Fellow with the India Development Foundation.

Harsh Vivek
India Development Foundation

Harsh Vivek works at the India Development Foundation (IDF) as a researcher, and the managing editor of the Journal of Rural Markets, published by the India Development Foundation. He is an Economics graduate from the University of Delhi and a management graduate from the Institute of Rural Management, Anand (IRMA) in 2004. He has worked at the International Water Management Institute (Anand), after which he joined the India Development Foundation. He has worked with Dr. Amir Ullah Khan on several projects in agriculture and international trade. He has also worked as a visiting co-faculty with Dr. Khan at the Birla Institute of Management and Technology, Greater Noida where he taught the course called 'Fundamentals of Agribusiness'. Dr. Amir Ullah Khan and Harsh Vivek co-authored the publication from IDF and CII titled 'India-Pakistan: Partnering for a Prosperous South-Asia', which is expected to be officially released soon in both India and Pakistan.

Conference on
South Asia Free Trade Agreement (SAFTA): Opportunities and Obstacles
February 1, 2006

India Development Foundation (IDF) in association with the Confederation of India Industry (CII) and the United States Agency for International Development (USAID) organised a conference on 'South Asia Free Trade Agreement: Opportunities and Obstacles' in Mumbai on February 1, 2006. The conference was attended by over 100 delegates from leading industrial houses in the country (especially from Mumbai) and government officials. The conference marked the culmination of a year-long series of workshops and regional consultations involving South Asia's leading experts on regional development and economic integration.

The South Asia region is one of the fastest growing regions in the world. However, on an absolute scale it still has a long way to go. We will not be able to sustain this growth if we do not address some obvious flaws that our economies continue to have. This conference focused on issues that concerned policymakers, industrial houses and corporate groups as they prepare themselves for the launch of the SAFTA agreement in 2006. The conference was a good platform for authors of the country studies promoted by USAID to discuss their findings and reach out to a larger audience and target stakeholders.

Some major issues that came out in the conference were as follows. Member governments have focused too much on protecting their economies by drawing up highly restrictive "sensitive lists" and being very conservative in formulating rules of origin. Not enough attention has been paid to trade facilitation measures that will do more to increase intraregional trade than reducing tariff rates. The agreement should cover other areas of cooperation, in particular cross-border investment. The timetable for full implementation of the proposed tariff cuts needs to be accelerated.

Experts like Mr. Shahid Javed Burki highlighted the importance of regional trade agreements like SAFTA in boosting the country's economic growth. He also underlined the need for a greater acceleration in reforms in all the signatory countries in the area of trade and investment. He emphasized the need for infrastructure development in boosting trade between the member countries and reducing the transaction costs in trade in the region. He urged the governments of both India and Pakistan to give-up policies of distrust and focus on forging long-term economic relationships. Greater trade relations between India and Pakistan augur well for peace and stability in the entire SAARC region.

Mr. James Walker, Senior Economic Advisor (USAID) talked about the series of studies that USAID is sponsoring on the issue of SAFTA. The emphasized that SAFTA presents an unique opportunity for the South Asian countries to increase trade. He said that the Agreement needs to be examined and appreciated in the context of the region's history, geo-political heritage and economic structure.

Mr. James Robertson, trade expert and consultant (Nathan Associates), talked about the need for trade facilitation measures needed to be taken in the South Asian countries in order to reap the benefits from SAFTA. He called for a greater harmonization of tariffs, standards and trade protocols in the signatory countries, especially India and Pakistan - the two largest economies in the region. Regional Trade Agreements like SAFTA hold a lot of prominence in shaping the course of economic growth and development in the region. He talked about the need for a robust dispute settlement mechanism to address trade disputes under SAFTA.

Dr. Amir Ullah Khan, Fellow, India Development Foundation compared the South Asian region with the East Asian region and the Latin American region and discussed issues concerning trade. Intra-bloc trade within SAARC is miniscule, but intra-bloc trade in the East Asian and the Latin American region is substantial due to a focus on integration of markets in these countries, removal of tariff and non-tariff barriers and promotion of trade-friendly infrastructure. Dr. Khan mentioned that SAFTA too has the potential to give a fillip to regional trade in South Asia provided that the Agreement is executed in right earnestness. He highlighted the fact that there is also a need to examine the Agreement from the perspectives of individual countries that are its signatories and of countries that might be later brought into its ambit in the future (Afghanistan, Myanmar and even Thailand).

Mr. Harsh Vivek from the India Development Foundation talked about the potential of trade between India, Pakistan and Afghanistan. There has been a substantial growth in trade between these countries in the last two years, and there is a need to institutionalize it and develop systems to exploit the trade potential to its fullest. He mentioned that the success of SAFTA depends on the political commitment and harmony among all members and on the vigour and vision with which India, the largest economy in the region, leads by example of adopting meaningful trade reforms.