Nepalnews.com Mercantile Communications Pvt. Ltd.

SAFTA will boost regional trade: Experts

Participants of a program have said that the implementation of the South Asian Free Trade Area (SAFTA) agreement will help Nepal to boost its trade with South Asian countries.

Speaking at an interaction in the capital on Sunday, they said Nepal has to identify the goods of comparative advantage to penetrate the regional market.

In his presentation, Prachanda Man Shrestha, joint-secretary at the ministry of industry, commerce and supply (MOICS), said that finalization of the SAFTA accord has given a message that economic agendas are also getting priority in the South Asian Association for Regional Cooperation (SAARC).

He informed that as per the SAFTA agreement, developing countries will bring down their customs tariff to 20 percent while Least Developed Countries (LDCs) countries will bring it down to 30 percent during the first phase between 2006-2008. Non-LDC nations will bring down tariff level to between 0 and 5 percent by 2009 while LDC nations will do so by 2016.

Though the agreement comes into force from January 1 2006, Nepal has to reduce its custom tariffs from August 2006 as the Nepalese new economic year begins from August.

He further informed that implementation of the agreement will create more investment opportunities in the region. He said Nepal has to identify the products of comparative advantage and special areas to penetrate regional market, as Nepalese products are not competitive in SAARC region as well.

He informed that all seven member countries have their own lists of sensitive goods and which will be reviewed every four years to help create confidence among the trading partners and boost intra regional trade.

Commenting on the presentation, Professor Dr Bishomver Pyakurel said that most of the provisions in the SAFTA agreement are tricky, so Nepal should be careful while dealing with these provisions.

He pointed out the need of formulating policies as per the regional agreement and increasing the physical infrastructure.

He however said revenue loss in the regional trading agreement is not a major challenge, as the free trade area will provide more space for trade of more products of member countries.

He said that the government and private sector should join hands to form supportive policies and to gain from the regional trading agreement.

Speaking at the same program, businessman turned assistant minister for MOICS, Rajesh Kaji Shrestha, assured that the government is ready to extend assistance for developing competitive strength of Nepalese enterprises.

Chairman of Management Association of Nepal-Management Development Centre, Dr Bimal Koirala, said that all should concentrate to develop competitive strengths of our products to maximise advantages from the regional trading agreement. nepalnews.com pb Dec 25 05