Indo-Pak differences hold up SAARC agreement; slow progress on key issues

New Delhi

9 November 2005

The prickly issue of "most favoured nation"

between India and Pakistan has held up a possible agreement on

promotion and protection of investments by all seven SAARC member-

states. Consequently, only three agreements will be signed during the

13th SAARC Summit in Dhaka.

There seems to be little forward movement even on the issue of terrorism

because not all member-states have ratified the additional protocol to the

SAARC Convention on Suppression of Terrorism even after the passage of

almost two years since the 12th SAARC Summit held in Islamabad

between January 4 and 6 in 2004.

Nepal, apparently, has not ratified the Additional Protocol because its

Parliament stands dissolved. India, accordingly, has observed that the

Dhaka Summit "would be stressing the need for ratification of the

Additional Protocol [and] call for an early conclusion of a Comprehensive

Convention on International Terrorism."

While a consensus already existed on the signing of two agreements on

mutual administrative assistance in customs matters and a limited

multilateral treaty on avoidance of double taxation, member-states have

ironed out their differences on a third agreement on establishment of a

SAARC Arbitration Council.

According to sources, there were many claimants besides India for

hosting the Arbitration Council. Those differences have since been

eliminated in the run-up to the Summit but a fourth possible agreement on

promotion and protection of investments has been held to ransom by the

MFN issue between India and Pakistan.

Incidentally, Prime Minister Manmohan Singh said in Chandigarh on

Wednesday, "Be it in education, in health care, in tourism, in trade and

investment opportunities, in all these matters India has the capacity and

the tradition to be welcoming of its neighbours. Provided, of course, that

those who visit us come as our friends and our well-wishers and bear no

ill-will towards our people and our nation."

The 13th SAARC Summit was deferred twice -- first due to the tsunami

disaster and then because of India pulling out expressing concern over

developments in Nepal as also the security situation in Bangladesh. The

next Summit will be held in India in January 2007 after Bhutan expressed

its inability to host it.