Regional integration: Pakistan to cut tariffs on 233 products

Tariffs will be in range of zero to five per cent to meet SAFTA guidelines.

ISLAMABAD: In a step towards regional economic integration, Pakistan will lower tariffs on 233 products, bringing them down in the range of zero to five per cent to meet an obligation under the South Asia Free Trade Agreement (Safta).

The government has prepared a list of 233 tariff lines that will be taken out of the sensitive list, which comprises products on which more than five per cent tariff is being charged to protect the local industry, said a handout issued by the commerce ministry.

The sensitive list will be curtailed to 936 tariff lines from the existing level of 1,169, a reduction of 20 per cent. Under Safta reached in 2004, non-least developed countries in South Asia region including Sri Lanka, India and Pakistan are bound to lower their tariff lines to zero to five per cent by 2013. The deadline for least developed countries – Bangladesh, Nepal, Maldives and Bhutan – is 2016.

Each member state of the South Asian Association for Regional Cooperation (Saarc) has kept a sensitive list which is not offered for tariff concessions and is aimed at protecting local industries – a tool that is against the concept of free trade. Pakistan is also working on a plan to reduce overall tariffs and bring simplicity in tax codes to further liberalise the trade regime.

However, the plan is yet to be vetted by the Economic Coordination Committee of the cabinet where various lobbies are said to be working to block the move.

At the Saarc platform, a working group was created to work out modalities for reducing items on the sensitive list. The group has held three meetings and all member states have agreed to trim their sensitive lists by at least 20 per cent.

The government has selected 233 items in consultation with the stakeholders for removal from the sensitive list. It has sought industry’s comments on these items up to October 19.

The items include pulses, vegetables, meat, fruits, cooking oil, wheat, sugar, maize, tobacco, liquor, furniture articles, used tyres, sugar manufacturing machinery, broadcasting equipment and telephone sets.

Published in The Express Tribune, October 13^th, 2011.