By Thomas Wallgren
* Presentation given at International Conference of governments and social movements “Regional Integration: an opportunity to face the crises” (21 and 22 July 2009, Asunción del Paraguay)
Because of systemic constraints in the so called leading nations we cannot wait for the Obamas and even Lulas of the world to show the way for the deep changes we need. Political, cultural and moral initiative that will inspire hope on all continents can and needs to come from many places.
In the golden age of the Nordic model, the small North European area that I come from, had disproportionate global significance in pro-people politics. Many of us in these countries still work to preserve and take further the Nordic tradition. We must, however, humbly admit that the Nordic identity has weakened in the last 15 years as we have been been overwhelmed by globalisation and EU-integration.
In this spirit I want to join the large number of people on all continents who enthusiastically welcome the recent wave of positive developments in Latin America, including also many smaller countries, such as Bolivia, Ecuador and Paraguay. I recognise the enormous difficulties you are facing, including the current crisis in Honduras. Nevertheless I want to welcome the quality and direction of development in many South and Latin American countries in the last few years and the efforts and the decisive contribution of ordinary people from the struggling classes to them.
A. GLOBAL AND HISTORICAL PREMISES OF REGIONAL COOPERATION
Regional integration in the context of collapsing neo-liberalism, authoritarian capitalism and the search for cultural alternatives
1. “Neoliberalism died in 2008-2009. ” Is this statement true or false?
It is true in a limited sense. The state is back in the economy. Simultaneously deregulation, privatisation and trade liberalisation are all on a hold or they are rolled back. George W. Bush goes down in the books as the greatest socialiser of banks and enterprises in world history. Market fundamentalism will not come back easily as an economic orthodoxy. So far so good.
Nevertheless, as we have seen during the past months the demise of neo-liberalism does not mean the end of capitalism nor does it automatically change the balance of power or fundamental policies. Banks are bailed out and the costs of enterprise failures are carried by tax-payers. In the EU the centralising and liberalising Lissabon treaty is back on track. In India the elections were won by a centre right still pursuing growth through exports, international competitiveness, intensified exploitation of domestic natural resources and deepened integration into global markets. Obama brings the US back on a more Keynesian track and into multilateral cooperation, but his victory was more due to the catastrophic results of Bush’s politics than of a desire for fundamental redirection of US power. Financial regulation remains weak, tax havens still work as usual and even the Tobin tax awaits its implementation. In the global arenas, at WTO, the World Bank or even in the climate negotiations positive news are yet to come. All in all, it is clear by now that radical shifts in power structures, economic distribution or national or international policies are not easily within reach.
The main lesson of the past winter is that neo-liberalism was always only a radical fashion, a tip of the iceberg. When it goes away we can see again clearly that the modern state in most countries remains committed to a development model in which a mix of capitalist, growth dependent exploitative economy and consumerist, individualistic, civilisational values remains central. The global trend in the last years and months is not that neo-liberal capitalism is replaced by socialism, a new green politics or even social liberalism but, unfortunately, by authoritarian capitalism. In fact, what we witness on all continents is a colossal lack of political and cultural creativity in the state and corporate sector. Hence, and this is my first point today, people seeking social and ecological justice need to recognise that the shift to politics for sustainable futures that the world so badly needs will not come about just because neo-liberalism goes away.
The good news is that with neo-liberalism gone, with George Bush down and out and with the states and business sector at a loss both intellectually and morally we can begin to understand our responsibility and define our tasks and challenges more clearly than has been possible during the past ten years.
Everywhere people recognise that the ruling elites are failing and at a loss. We need a new internationalism that is not founded on state to state cooperation or market integration. The regional cooperation we are looking for must protect and build upon people-to-people solidarity and conviviality. It must draw its strength from the confidence and creativity of ordinary people who are engaged in a multitude of local struggles and in a plurality of efforts towards decolonisation and civilisational renewal.
2. Too often only the global and national level are recognized as relevant political arenas. They are important, but should not make us overlook the relevance of the local and regional levels. From the perspective of radical and comprehensive democracy building from below and strengthening the disempowered is essential in all responses to the crisis. Democratising the politics and economy of globalisation is important but difficult. In global efforts large corporations and states still have a relative advantage over other actors. Hence, as long as power structure are not altered, we should not expect too much good to come out from institutions working on global regulation of e.g. finance and climate.
The experience of the past years has shown clearly the inadequacy of the current structure, instruments and policies of global financial regulation and economic development. The Bretton Woods institutions and the WTO-framwork have been insufficient or even dysfunctional for development, ecological responsibility and economic stability, especially for the global South. This much should now be uncontroversial. It remains open, however, what the implications are for the politics of global governance and the role of regional and national politics.
My second point today is that regional politics needs to be recognised more than before as a relevant arena of political initiative in its own right. The regional arena is too often considered to be only complementary to nation states and global institutional arrangements and global governance. Regional cooperation in the South can provide protection from dysfunctional and failing global institutions. It can also strengthen the bargaining power of the South, especially the smaller countries of the South, in global politics. Thirdly regional political instruments may play a huge role in achieving at the regional level governance services and functions that are not available at the global level. These can include for instance protection and support of micro and small enterprise as well as of local knowledge systems and forms or democracy, the launch of local and regional currencies with high social and ecological value, and so forth.
3. State borders are becoming more porous than before, people are meeting and mixing more than before. The future belongs, as Indian social philosoper Lohia said fifty years ago, increasingly to “the bastards.” We see every day along the Southern borders of the US and the EU that efforts to keep borders closed and nations clean lead to disaster. Regional cooperation presents major opportunities if the physical and cultural mobility of peoples in the region and between them is enhanced. The opposite politics of regional integration which allows mobility only internally and is closed to the outer world, with exceptions allowed only for selfish reasons or on market premises is a false and dangerous model.
In societies atomised socially and empoverished culturally by late capitalism and consumerism nation state are often seen as competitors. The sense of competition fosters widely felt anxiety. As we have seen in South Asia, Europe, North America and elsewhere the consequence is often un upsurge of xenophobic identity-politics, increasing militarisation and securitisation and even terror by states and non-state agencies.
Regional protection and strategic cooperation should be built with a clear commitment to global solidarity.
In building regionalism for a new internationalism it is essential that we go beyond the current logic of competetive identity politics. In this a people-to-people cooperation and diplomacy, as pursued for instance in the World Social Forum and by a multitude of innovative smaller groups and movementsduring the past years, can play an important role. The legitimacy and need for non-state political cooperation is obvious and in regional cooperation as well tax-payers money and other public resources should not be exclusively spent on state and market driven integration.
Having said this let me stress that our efforts must complement and give life to, but not undermine the UN centred multilateral system. The G-192 that met in June 2009 for a UN General Assembly on the financial crisis and its impact on development also needs strengthening.
4. Regional cooperation in the South should not only protect the weak. It should also lead the world out of its multiple crises on the long-term. Globally the political debates seem to be moving from a discussion of separate crises to a discussion of inter-connected crises: of the finance sector, the world economy, political governance, food, water, development and climate. I welcome the synthetic framework of this conference. I only want to add that not only are the different areas of crisis interconnected and systemic. They should all be seen as symptoms of an underlying cultural crisis; a crisis of development models and the fundamental aspirations and ideals of modernization.
My fourth suggestion is that all political reforms and initiatives now of the short and medium term should be shaped so as not to hamper but rather support a civilisational shift in which the ultimate goals and ideals of development are reconsidered. It is clear that people, states and corporations in Europe and America must be pressed to responsibility and that we must pay for the mess we have caused during five hundred years through exploitation of other continents and mother earth. Nevertheless, for historical, cultural and social reasons the global North cannot be trusted too much in the search for new civilisational visions and new socially and ecologically enriching models for progress and development. The global South must take the lead. Regional cooperation in the global South and between increasingly self-reliant but co-operating Southern regional blocs can be essential for gaining economic, political and cultural autonomy from Europe and the US, serving global solidarity and environmental responsibility.
Latin America, with its strong tradition of mass participation in politics, progressive left movements, liberation theology and its great cultural variety should be a strong region in this search. In recent years the increasingly lively alliances throughout the region of indigenous and other emancipatory movements, that has given one country a president coming from the indigenous movements and another country a constitution that recognises Mother Earth is of particular interest for people on all continents who are searching for new political tools, ideas and visions. In decolonising development, art iculating new visions of good life (buen vivir) and building radical democracy the movements South America are today a great source of energy and hope for people on all continents. It is important for us all that this political and cultural resurgence is placed at the centre of regional integration here.
6. Nuclear proliferation, the totalisation of war through the war on terror and anti-hegemonic insurgency with little or no dependence on states, and the largely uncalculable threats of new military technologies combining e.g. new IT, nano-technology and genetic engineering make 21st century questions of war and peace more intractable than before. For this reason pro-people regional cooperation should systematically promote cultures and economies of sustainability and peace.
Peace-politics cannot imply thoughtless pacifism. We can still draw insight and inspiration from the Gandhian notion of and experiments with truth-force (“satyagraha”). This year 100 years have passed since Gandhi wrote his definitive statement, the pivotal pamphlet Hind Swaraj or Indian Home Rule on board a ship between Britain and South Africa. The new politics of global security that we need, must, as Gandhi and others have clearly seen long back, be linked to the construction of pro-people and environmentally sound development models. These can emerge on the basis of the variety of sustainable life-styles, democracies and civilisational values existing today especially in the global South.
The industrial growth centred development model that first emerged in Europe and North America in the 18th to 20th century needs to be seriously reconsidered. The global record seems to be that industrial growth economies are not capable of overcoming poverty and deprivation everywhere. Without a commitment to peaceful cooperation and civilisational alternatives zero-sum competition for growth and unsustainable life-styles among nations and regions is likely to dominate global politics in the 21st century. Regions are then more than likely to develop into competing, protectionist blocs forming strategic alliances. Even under the condition of functional interdependence globally of the competing blocs, climate change, development failures and resource depletion combined with nuclear proliferation and the evolution of new military technologies may easily lead to completely new types of wars with planetary consequences. Hence, regional cooperation in Latin America, in other Southern regions and between them needs to be globally oriented towards cooperation and solidarity, not competition. It may be helpful in this regard to think of the global North in a new way: not as the developed regions that have made it, but as regions suffering from serious development failures. Even quite conservative new models for measuring overall success in development, such as the so called Happy Planet Index, indicate that life-conditions in the US, Sweden, Germany and other similar countries reached an all-time high in th 1970s and haved steadily deteriorated since then.
B. LESSONS FROM THE EUROPEAN MODEL
Since the early 1950s the emergence of, first the European Economic Community, EEC, and later, its sequel, the European Union, has been the dynamic centre of European integration. The EU is now the most advanced model of regional integration globally. It has the largest internal market, the most ambitious common political instruments and the tightest juridical integration.
European integration has gained popular support and political legitimacy from two great promises. It has been seen, first, as a peace project and, secondly, increasingly in later years, as a project for benign, political governance of corporate driven globalisation. Without these impressive ideas European integration could not have been brought to its present level. Both ideas are now in a crisis.
I wish to bring out some lessons for regional integration from the fifty years of building the European Union:
(1) Peace ambitions may undermine democracy:
Since its inception in the 1950s the EU has been seen as a device to overcome the belligerent tendencies of nation-states. Drawing on analysis and inspiration coming from the 18th century German enlightenment philosopher Immanuel Kant and others, the idea has been to promote peace through functional integration of the national economies in the region.
The dark side of this idea was that EU integration has worked top-down. The people have been seen as prone to aggressive sentiment. Integration has proceeded on the initiative and under the leadership of bureaucratic elites. Economic integration has intentionally been built as a device that will promote political and other integration later, behind the backs of the reluctant citizens. For this reason the EU carries a vast democratic deficit. In recent years the democratic deficit in Europe has become obvious to all. The repeated side-stepping of the outcome of national referenda on EU-issues, such as the French and Dutch rejection of the EU constitution and the Irish rejection of the Lisbon Treaty is rapidly leading Europe to a very serious and deep crisis in democratic legitimacy and participation.
The deficit is structural: decision-making in the EU is so undemocratic that, ironically, the EU, if it would be a nation, would not qualify for membership in the EU. Because of the post-war technocratic logic of EU-integration the democratic crisis in Europe is also very deep-seated. It will take time to overcome it. At the moment, the effort by EU-leaders to enforce the Lisbin treaty show that so far the EU is on the wrong track in this regard.
The lesson to be learnt is that regional cooperation must, much more than has been the case in Europe, be built democratically, with explicit consent and support by the citizens.
(2) Peace ambitions regionally may be counterproductive for peace globally:
In the aftermath of the second world war the sound ambition of the architects of European integration was to prevent the outbreak of war between European nations. Less attention has, for understandable reasons, been paid to the contribution of Europe to global security. The consequence is that wars between the leading countries of Europe has become highly unlikely but that their integration between them may become, or has perhaps already become, counter-productive for global security. In the great wars of the Bush regime – on Iraq and Afghanistan – a new obscene division of labour is emerging between the trans-Atlantic forces. The USA carries the main burden of classical warfare, the EU steps in economically and logistically in the aftermath of the war, takinmg care of crisis management. This, it may be argued, is the new logic of Western, imperial military hegemony.
If other regions follow the EU model and see regional integration of foreign policy, security policy and trade policy as an instrument for selfish and hegemonic ambitions the ensuing world order may easily end up repeating the calamities of what we in Europe call the westphalian order of competing, sovereign nation states, at a new, higher level.
(3) Regional cooperation for global governance needs to be built democratically from below. Special care must be taken at every step to keep economic policies within democratic control and to avoid spill-over from economic policies on social protection, environmental protection and other vital policy areas:
Since the 1980s the main left and centre argument in favour of deepening European integration has no longer been the argument from peace. The new argument has been the argument from globalization. The main ideas are familiar to all by now. Technological changes have made possible deep changes in the economy. Deepening economic interdependence between nations and regions, the increasing importance of a globalised capital market and the increasing size and power of transnational corporations have overburdened the steering and regulating capacity of nation states. For these reasons new instruments for political regulations are called for. The European Union has been seen by many as a much needed instrument for improved global governance of the economy at first, and now increasingly also of climate change, migration etc.
For this and other reasons the primacy of economic policy instruments is a deep-seated feature of European integration. The creation of a common internal market and of common external economic policies, especially as regards trade, has been a priority in European integration.
In this tradition markets and trade have often been given politically very expansive interpretations: in the EU (as in the WTO) the free movement of trade in goods has not been enough. Free movement of capital, labour and services have been seen as equally natural parts of economic integration on liberal premises. In consequence, the more the economic instruments have developed the more they have dominated over other policy areas in which decision-making has been more confined to the national level. Social policy, workers rights, health and education, environment have all suffered from a subordination to common economic policies. The strong efforts by trade unions, left governments, environmentalists, women’s movements and others to change the balance of forces in Europe have so far met with, at best, half-success. Recent key developments, such as the text and ratification process of the Lisbon Treaty, the formation of Europe’s new global economic policy, and the struggles over the working time, services and chemical legislation at the European level, show that corporate interests and narrowly defined economic goals still tend to dominate EU-policies.
The lesson for other regions is again negative. It is extremely dangerous for democracy, ecology and social justice to make economic cooperation the heart of regional integration.
(4) Regional integration is possible but needs to be democratic:
Let me close on a more positive note with some recommendations drawn from the European experience:
* Regional integration needs to be built democratically. Economic integration should be subservient to social justice and radical democracy.
To this end, there are four fundamental conditions:
One: the fundamental principle of democracy, that all state power and all power of regional authorities belongs to the people, must always be recognized formally. (In the EU this is still not the case!)
Two: It is imperative that the juridical hierarchy, including the effective control of constitutional rights and freedoms of people and nature, is never subordinated to economic policies or juridical agreements regulating the economy. In the European Union the primacy of economic rights and freedoms at the level of the common regional market and in trade agreements infringes more and more on the human rights achievements. This is not only a concern at the international level where bilateral and multilateral free trade agreements are known to undermine human rights. Also internally in Europe social rights achievements have some times been undermined by the economic logic of integration.
Three: the peoples must always have effective control, before the fact and after the fact, of the balance of powers between regional and national authorities. In practice, referenda about that powers to hold at the national level and what powers to confer to regional authorities are essential. But these must be complemented by stronger powers to question and interfere in the formation of this balance by national parliaments.
Four: the political logic of democratic regionalism by the people and for the people should be pluralistic and decentred. When the peoples are in effective control of the balance of powers different countries will participate in different ways in regional cooperation, taking exceptions as they see fit and forming sub-units of tighter cooperation as they see fit. This should not be seen as a problem. The example of the European Union shows that even when integration is rigidly designed to create a Union of just one kind of members the end-result will be something else. In actual fact different European countries have different between them quite different kinds of membership in the EU both politically and juridically.
* Economic policies of regions should learn from the failures of the neo-liberal experiments in the EU and elsewhere:
+ A Latin American Central Bank issuing a common currencie that may in the long run function as a (regional?) reserve currency must work under democratic political guidance and pursue socially and ecologically responsible monetary policies;
+ The political weight and influence of large corporations tends to be relatively greater on regional than on national and local levels of political decision-making. In order to curb excess corporate influence strong measures must be taken at all times. They need to include very tight transparency regulation and, as I believe, innovative, radical anti-trust regulation. I suggest that a maximum size of corporations is considered as well as sealings on individual ownership and control of corporate activity.
* Regional cooperation may have democratizing effects on the relations between big and small countries. For this, effective, almost excessive formal veto powers by smaller members states in the regional organisations are needed to counter the effective and lasting, greater political weight of larger members.
* Regional, elected parliaments can play an important role in a new regionalism. The elected parliament should not be subordinate to regional non-elected bodies, but the extent of its powers needs to be controlled from lower levels.
* The world has seen the emergence of many special economic zones lately. In a new kind of regionalism special zones for people’s power from below can be created, where people and nature are protected against corporations and states. In Bolivia there seems to be encouraging experiments along this line that could serve as a model for further work.
* The European experience shows that regional cooperation can be effective in enhancing the power and economic and social status of oppressed minorities and underprivileged regions. The mechanisms to achieve this need careful attention.
* If we manage to correct the imbalances mentioned the European Union shows that cultural and social solidarity between peoples with a long negative record of wars is possible and can be promoted through regional cooperation.
* Lastly, as compared with Europe, Latin America (as well as e.g. South Asia) has four distinct advantages as compared with Europe in its effort to build pro-people, ecologically sustainable regional cooperation to the benefit of the global community.
+ The first is a commonality of cultural values and identity. I do not want to under underestimate the cultural diversity of the Americas. But it seems to me as an outside observer that the experience of more than 500 years of colonialism and imperialism serves as a source of solidarity between the peoples in Latin America.
+ The second is common languages: Spanish and Portuguese are closely related. Again I hope that I do not offend the many people with other languages as their first language if I say that the conditions for a common public space, and hence for radical regional democracy is more happy in Latin America than in some other regions. In view of recent experiences elsewhere this is likely to be more important for post-national democracy than computer-intensity.
+ The third is common interest. Again, I do not want to overstate the case, but it appears to me that all countries in Latin Ameica could gain in economic and cultural terns from deepened cooperation between them and also with other Southern regions, even if it has to happen at the cost of laxer links to Europe and North America.
+ The fourth is the mere fact that Latin Ametican efforts towards regional integration can learn from the European experience, positively and negatively. For instance, it appears to me that it can be advantageous to build relatively more on existing sub-regional organizations than has been done in the European context where Benelux, Nordic and other sub-regional cooperation structures have been eroded by European institutions when a better policy could have been to sustain and strengthen them as parts of a multilayered regional cooperation structure.
Latin American regional cooperation may also benefit from solidarity and cooperation with regional cooperation in other regions of the South. Together the cooperating regions may make historic contributions to a post-colonial and post-imperial, pluricentric and peaceful world order
With these remarks I wish Paraguay and all countries in Mercosur and South and Latin America at large determination and democratic energy for regional cooperation that will enhance a new internationalism and civilisational renewal world-wide.
Thank you for your attention.
 The author is the secretary of Coalition for comprehensive democracy, Vasudhaiva Kutumbakam in Finland. He is affiliated with the Brussels based organisation Corporate Europe Observatory, chair of the Finnish Refugee Council and co-chair of Alternative to the EU – Finland. He serves as an elected member of the city council of Helsinki and is co-chair of the social-democratic group. Wallgren is the head of the Department of Philosophy at the University of Helsinki, Finland. – All references are given for purposes of identification and transparency only. The author claims no ownership of his ideas nor originality for his views. He carries sole responsibility for the views expressed and all shortcomings of his remarks.
The (SAFTA) South Asian Free Trade Agreement has been implemented from July 1, 2006, sale which is operating under the framework of the South Asian Association for Regional Cooperation (SAARC). The SAARC includes Bangladesh, here Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka. Afghanistan will join the group next year. India, Pakistan and Sri Lanka belong to the group of the developing countries while the least developed countries.
The South Asian history would have entered into a more encouraging phase with the free trade arrangement of the region (SAFTA) taken effect from the beginning of July had Pakistan not adopted the positive list approach granting duty concessions to a restricted number of Indian export items in difference with others in the group. Thus, the SAFTA has not begun its journey as smoothly as it should have. It belied the expectation that economic co-operation would progressively remove mistrust among the countries of the sub-continent to steadily encourage political rapprochement.
On the other hand, India-the largest economy of the sub-continent that draws benefits from regional trade larger than that drawn by all other countries combined-should be also ready to play a critical role in pulling up the entire area to a higher level of economic development and prosperity. It should play this role on its own as a responsibility conferred upon it by its size to help create positive demonstration effects in favour of gradual intensification of regional trade within the area. In pace with the rest of the member countries, it should unilaterally dismantle all non-tariff and para-tariff barriers to encourage trade with it so that the smaller countries may have no reason to suspect its intention.
The Indian act of imposing additional duties on four major export items of Bangladesh-hilsha fish, saree, medicine and porcelain, while SAFTA was about to take effect-has created an adverse notion in some circles in this country that the latter has raised its effective duties on these items for eroding the value of tariff concession to squeeze market access of these goods. If that were so, it is disconcerting for the people of this country and is a step in the wrong direction.
India should rescind the pertinent order to restore public confidence in this side of the border about its sincerity of purpose for making the SAFTA a success.
Bangladesh and other partners of the arrangement should unilaterally revoke all unjustified non-tariff and para-tariff barriers also to signal their firm commitment to the SAFTA. It would not be fair for them to expect that India alone should do it. But one is disappointed to see that-long after the preferential trade agreement into effect before commencement of free trade-the SAFTA countries are now working together to identity non-tariff and para-tariff barriers, which they individually face while exporting commodities to partner countries. It smacks of ill intention within this family of nations. The group which is doing the task, should finish it within the stipulated time and complete it in a flawless manner.
Recently, local business leaders complained that they were yet to receive the sensitive lists of all SAFTA countries. It speaks badly about those in the ministry of foreign affairs and that of commerce who are responsible for the SAFTA matter. About the role of business community in it and the government on its agencies to conduct business under the free economy still become questionable. If it is their mind-set for economic diplomacy, the nation should wait only for disasters. Copies of the sensitive lists and the SAFTA agreement should be immediately procured, if not already done, and distributed among the apex trade promotion bodies and the media so that concerted efforts can be mounted to draw maximum benefits from the free trade arrangement.
Since the sensitive list of this country, as that of others, will be shortened in phases, as the agreement stipulates, through subsequent reviews, the business community and opinion leaders in the country must know how quickly and in what sectors the country will have to be industrialised for drawing maximum benefits from this regional arrangement.
India has issued a series of specified tariff concession notifications to Bangladesh along with three other Least-Developed Countries (LDCs) on goods imported from the latter under the SAFTA.
The concession rate under SAFTA are higher for Bangladesh, Nepal, Bhutan and Maldives than that of Pakistan and Sri Lanka.
The notifications were issued by the Indian Customs Department on June 30. A list of goods not eligible for benefits of SAFTA has also been notified. The concession rates will be applicable in accordance with the Rules of Origin of goods under SAFTA agreement.
However, Indian official are concerned over media reports emanating from Pakistan that Islamabad is not ready to open up its market to India for 773 more items, which were previously placed in the positive list of goods it maintains bilaterally with New Delhi.
Under SAFTA, Pakistan had promised to offer preferential access to 4,800 items from all SAARC members and restrict only 1183 items that were specified in the negative list of goods.
However, Pakistan is yet to communicate its decision officially to restrict market access for the new items from India.
Identifying non-tariff barriers as the main bottleneck in implementing SAFTA agreement, the country’s experts expressed their mixed reaction over the benefit Bangladesh can reap from the deal. They however, understand the need for participation of all SAARC nations in making the deal properly effective.
There is no way to avoid any clause of the agreement as SAARC member states altogether signed the deal. The country can get benefit through export of fish, vegetables, jute, tea, leather, ready-made garments, home textiles, medicines, processed food, consumer goods, cosmetics, handicrafts and ceramics to other SAARC countries.
It will get trade benefits under SAFTA not from all countries. But as per the deal, it can get some export benefits from India, Bhutan, Sri Lanka and the Maldives. Bangladesh will have duty -free access of jute and jute goods, fruit, leather products, ceramic, electrical goods to India’s big market as the giant member country of the region keeps these products out of its sensitive list.
A number of Bangladesh’s export items including ceramic, melamine products, garments, fruit juice, electrical wire, leather and footwear, edible oil, hilsha fish and traditional jute products have huge demand in the Indian market. But due to non-tariff barriers such export potential is yet to be tapped.
Dwelling on the problems of non-tariff barriers imposed by the Indian customs it may be mentioned that the Indian authority does not seem to accept certification from Bangladesh organisations, although these products are also exported to the EU and US markets.
In the SAFTA sensitive list, Pakistan includes potential export items of Bangladesh such as jute, fabrics, woven and fabrics, made-up textiles and footwear. Although Bangladesh will not get much benefit from Pakistan under the SAFTA, it is possible to export some major items to Pakistan through bilaternal deal, which is under process. As per commitment, high level officials of both Bangladesh and Pakistan are supposed to sign bilateral deal by September-’06, which may help Bangladesh get market access of some major export items.
According to Export Promotion Bureau, Bangladesh exported goods worth $46.17 million to Pakistan in July-March period of FY 2005-06, which is 0.61 per cent of the total export earnings of the country. The main products that Bangladesh usually exports to Pakistan are raw jute and tea.
Sri Lanka sensitive list includes fish, leather and footwear, while all major export items of Bangladesh except tea are excluded from the sensitive list of Bhutan. So, Bangladesh will get a chance to boost its export to these countries.
Meanwhile, major export items of Bangladesh such as fish, jute fabrics, woven and knitted garments, made-up textiles and footwear are on the sensitive list of Nepal. Only three major items of Bangladesh is on the sensitive list of the Maldives.
Data of the country’s promotional agency for export show that the main export items of Bangladesh to the SAARC region are chemical fertilisers, raw jute, frozen fish, leather goods, tea, ceramic, garment and textile products.
As per the SAFTA, Bangladesh will have to allow for the next six months imports of other ten items under its sensitive list from the contracting states by reducing 2.5 per cent tariff from the existing rates. The highest rate of customs duty in Bangladesh is 25 per cent.
India, Pakistan and Sri Lanka will reduce their tariff for Bangladesh and other LDC contracting states by 10 per cent from their existing rates for next six months as per the negotiation concluded at the maiden SAFTA Ministerial Council meeting in Dhaka on April 20. ’06.
The member-states had decided to notify the non-tariff measures (NTM and para-tariff measures (PTMs) they face with their exports to other states of the regional body by October 01, ’06.
Chamber and business leaders have expressed their doubt about the benefits that Bangladesh will gain from the implementation of the SAFTA. It will rather depend on successful negotiations with the SAFA partners.
The country’s export basket is small, there is a need for effective negotiation with the partner countries for it expansion, especially for RMG and textile products.
We should remember two things in the perspective of the SAFTA. Firstly, we have a very small export basket and secondly, India is the major business partner of Bangladesh. If we want some positive outcome from such a move, we need concentrated efforts and effective negotiation. Bangladesh should look for areas having maximum export potential as the Indian side hardly gives concession in the bilateral trade with Bangladesh.
Harnessing of benefit from SAFTA implementation for Bangladesh depends largely on effective negotiation. Normally, India will not Liberalise its RMG market for Bangladesh, because it is our one of the competitions in the global market. But it can liberalise its cosmetics and toiletries market for Bangladesh.
It also needs investment along with the trading under the SAFTA. Inclusion of investment option in the regional trade agreement could benefit the member countries. But a concerted knowledge based negotiation by the public and private stakeholders can bring some positive benefits for the country.
Focus on the Global South Ocassional Paper 3 (October 2006)
The Bolivarian Alternative for the Americas (ALBA) represents the first attempt at regional integration that is not based primarily on trade liberalization but on a new vision of social welfare and equity. Alternatives are often either theoretical to the point of impracticality,