PSAARC Working Group on Trade & Investment
7 April 2015
Introduction
Intraregional trade in South Asia lags far behind other regions – for example, of the region’s total trade volume of $517.5 billion in 2007, only 4% was intraregional trade. Trade policy, in particular in India, has not focused on enhancing trade relations within South Asia. There is an increasing drive for regionalism but mostly driven by interest of big capital. Moreover, liberalization has translated into an increase in imports more from the global North and other developed economies than from the region.
At the same time, in an era of globalisation and open economies, trade and foreign investment policies pursued by, or sometimes imposed on our governments, are beginning to impact each and every aspect our lives. Starting from livelihoods and incomes across sectors; access to food, medicines, resources, and social services such as healthcare and education; to environmental regulation are all being significantly influenced by trade and investment policies. In addition, what used to be purely policies about trading of goods are now expanding to trade in services, intellectual property rights, investment, government procurement, competition policy; and are really beginning to create large inequalities and inequity, with disproportionate burden on the marginalised and the vulnerable, be it the poor, women, indigenous communities.
Therefore there is a need to build strong links between elected representatives, trade unions, mass organizations and other social movements in the region, in particular within sectors and multinationals, to develop common regional strategies to counter neo-liberal frameworks and propose progressive alternatives.
The statement from the workshop on trade and investment held in New Delhi during the 2010 PSAARC Convention had proposed that we envision:
a regionalism based on complementarities between economies of the region and at an net expansion of domestic demand aiming at increasing employment and environmental sustainability. the concept of non-reciprocity for large economies and special and differential treatment, in particular for less developed countries in the region.
However, this should ensure equity within the country and between countries with a regional mechanism to compensate for the distortion created by trade in the region.
Recognising and expanding of the role of trade unions and other mass organisations in the policy framing process.
To take forward the initiative that began in the 2010 and 2014 workshops, to both understand the issues at hand and work out effective intervention strategies from people’s perspective a PSAARC Working Group on trade and investment was constituted on 7 April 2015.
Scope of Engagement
1./ Trade Agreements
1.1/ SAARC countries’ engagement in multilateral forums on trade and investment issues
In multilateral forums such as the World Trade Organisation (WTO), SAARC countries can play a strategic role to protect the interests of the region and that of developing countries at large, especially when the WTO negotiations are at a crucial stage. After the Bali deal at the 9th Ministerial, the developed countries are trying their best to scuttle the Doha Development round and bring in new issues which would be detrimental for the interest of developing countries. Moreover, the issue of public stockholding for food security purposes is currently being negotiated in the WTO, which requires unity of the SAARC nations to protect the interest of the farmers and the poor, by seeking a permanent solution to the issue of food security. It is therefore quite imperative that in forums like WTO developing countries could share common strategies as they share a similar concerns and challenges in trade and investment issues. PSAARC can also work to mobilize the governments to reflect people’s concerns in their negotiations and agreements in the WTO. The WG on trade can immediately begin its work with the focus on this issue.
1.2/ SAARC countries’ engagement on bilateral and regional free trade and investment agreements with countries from other regions
All SAARC countries are engaged in various bilateral trade and investment agreements with developed and developing countries in regions. Templates and impacts for most of these agreements are more or less similar, barring few national specific issues. Through sharing information, civil society perspectives and national campaign strategies among PSAARC members, the working group can contribute to evolve effective national level strategies for intervention at national and regional level. For example campaign issues, literature, strategies deployed by groups in India on EU India FTA may be useful for PSAARC members in Pakistan in case if they have to face a similar situation.
Another important example could be both India and Pakistan are cautious about their engagement in Bilateral Investment Protection and Promotion Agreement (BIPA) or Bilateral Investment Treaty (BIT) with United States. Currently, both governments are in the process of reviewing their BIPA draft texts. Concerns shared by Bangladesh, Sri Lanka on BITs in forums like UNCTAD are more or less similar to that of India. Civil society groups’ coordinated work at national and regional level can play an important role to make the governments to reflect people’s concerns on such issues.
2./ Autonomous/ Informal Trade
2.1/ Understand the elements underlying the vitality of informal trading arrangements as well as to identify the bottlenecks of formal trading arrangement between South Asian neighbours: characteristics of informal trade, why [is it due to high tariffs and non-tariff barriers in the region; weak infrastructure and high cost of trading; complex rules of origin; distortions in domestic policy; institutional and non-economic factors (traditional, historical, ethnic links);] and how it takes place, how it differs from formal trade, impact on livelihoods etc.
This can be a priority area for the WG precisely because of the demand by people for policies that support and encourage informal trade due to factors such as impact of such trade on the local economy; the dependence on trade to secure a livelihood especially in border areas and landlocked countries which are also zones of concentrated poverty and lack of employment opportunities, zones bypassed by formal trade and trade-led globalization processes; trade in culturally specific goods such as foodstuff; trade influenced by traditional/ethnic links across borders. In addition, greater integration, cross-border trade and mutual dependence could also reduce the likelihood of conflict with neighbours.
3./ Corporate Investments in South Asia & Impact of Government investment on border infrastructure (roads, electricity, telecommunications etc.)
There is growing investment, especially by Indian MNCs and PSUs, in neighbouring countries (e.g. garment industry in Bangladesh, hydropower in Bhutan etc.). This is impacting the local economies and local communities. We need to understand this further to ensure people’s rights and livelihoods are protected and to hold these corporates accountable for any ensuing human rights violations due to their investments.
Monitoring Business approach in the SAARC region – A PSAARC Corporation Watch on business activities would enable PSAARC members to challenge anti-people business strategies
There is a growing concern, especially among movements and local communities in the northeast, about the rapidly rising investment in border infrastructure development and its impacts on the environment, local livelihood, communities etc.
4./ Engagement with existing SAARC mechanisms/policies on trade and investment
The Working group can work on issues currently covered by SAARC framework from a civil society perspective. E.g. SAARC Food Bank. It also can take up issues that are not covered and work to make the SAARC to include those issues in its framework. For example issues like the demand for opening trade engagement at the border areas, which will benefit communities and people living in the border areas.
Please send your comments to the secretariat <psaarc.india@gmail.com>, if you have any.
We would like to reach out to all those groups/ institutions/ organisations in South Asia who are working on trade and investment issues and invite them to join the Working Group.
Looking forward to your inputs and cooperation.
PSAARC INDIA 