US embassy cable - 02KATHMANDU2158

C O N F I D E N T I A L KATHMANDU 002158 
 
SIPDIS 
 
E.O. 12958: DECL: 11/04/2007 
TAGS: ECON, NP, XD 
SUBJECT: SAARC: SECRETARIAT COMMENTS ON LATEST COUNCIL FOR 
ECONOMIC COOPERATION 
 
Classified By: Classified by Ambassador Michael Malinowski, Reason 1.5( 
d) 
 
Summary 
------- 
 
1. (C) On November 14, the Economic Officer met with Rajiv 
Chander, Director of Trade Economic and Transportation 
Division of the South Asia Association for Regional 
Cooperation (SAARC) and an Indian national, to discuss the 
recent meeting of the Committee on Economic Cooperation 
(CEC). Mr. Chander did not see evidence of Indian demands on 
Pakistan during the CEC proceedings. Although India and 
Pakistan did not agree to any trade preferences at the 
session, Mr. Chander saw progress through a commitment for 
representatives to meet late November, and perhaps again in 
December, to finalizing the South Asia Free Trade Area 
framework for presentation in January. The Secretariat is 
also prepared for the Twelfth Summit as scheduled and making 
provisions for postponement, rather than a cancellation. 
 
Accomplishments 
--------------- 
 
2. (U) On November 14, the Economic Officer met with Rajiv 
Chander, Director of Trade Economic and Transportation 
Division of the South Asia Association for Regional 
Cooperation (SAARC) and an Indian national, to discuss the 
recent meeting of the Committee on Economic Cooperation 
(CEC). The CEC, made up of the Commerce or Trade Secretaries 
of the member states, met for the eleventh time in Kathmandu 
from October 26-27. The CEC concluded the fourth round of the 
South Asia Preferential Trading Arrangement (SAPTA), which 
will be implemented in six months; set dates for the 
preparation of the South Asian Free Trade Area (SAFTA) 
tentatively scheduled for the end of November; and set Dhaka 
as the host for the fifth SAARC Trade Fair. 
 
Indo-Pak Discussions 
-------------------- 
 
3. (C) During the CEC discussions, Pakistan and India were 
unable to come to any agreement on trade concessions under 
the SAPTA framework. Mr. Chander did not participate in the 
bilateral meeting, but he did not see the Indian delegation 
present any preconditions for Indian participation in the 
January Summit. He views the commitment to meet at the end of 
November to finalize SAFTA as a positive sign. The CEC 
members also committed to a follow-on meeting in December to 
finalize the effort. (Comment: If press reports on New 
Dehli's statements are accurate, the Prime Minister has 
demanded Pakistan grant India Most Favored Nation Status as a 
sign of progress in economic cooperation and a condition for 
Indian participation in the Twelfth SAARC Summit. While these 
statements were not reiterated in Kathmandu, it is possible 
that progess on SAFTA may substitute for demands made on Most 
Favored Nation Status.) 
 
Prospects for the Twelfth SAARC Summit 
-------------------------------------- 
 
4. (C) The Secretariat is fully prepared for the Summit as 
scheduled. Provisions are being made for a delay in the 
proceedings, but not for their cancellation. Mr. Chander did 
not see this period as a return of the "dark days of SAARC," 
the period from 1999 to 2001 when no summit took place due to 
Indo-Pak bilateral tensions. Rather, he believes that 
postponement of the proceedings is more likely, with the 
Secretariat is already making provisional plans for just such 
 
SIPDIS 
a contingency. Other activities of the SAARC technical 
committees continue, including the development of a 
agriculture program and a forum discussing the impact on 
South Asia with the sunset of the Multi-Fiber Arrangement in 
2005. 
 
Comment 
------- 
 
5. (C) Despite Mr. Chander's position as facilitator during 
the recent CEC meeting, he was unwilling to provide a candid 
view of the Indo-Pak bilateral relationship. This falls in 
line with the Secretariat's unassertive stance on bilateral 
issues, which it defines rather broadly. SAARC continues to 
present opportunities for bilateral dialogue for all member 
states, particularly India and Pakistan. However, it lacks a 
recognized role as a mediator and does not have a history of 
holding member states to prior agreements as a condition for 
future talks. 
MALINOWSKI