Making SAFTA effective

The New Nation, Bangladesh

Editorial Page

Making SAFTA effective

3 July 2006

The South Asia Free Trade Agreement (SAFTA), has come into force in the member countries in South Asia. Of the seven countries of SAARC India, Pakistan and Sri Lanka are at the phase of developing countries and the remaining four in the category of least developed countries.

The operationalisation of the SAFTA is a major initiative of the South Asian Association for Regional Cooperation (SAARC) set up at an initiative taken in the late seventies of the past century. The then head of the state of Bangladesh Shaheed Ziaur Rahman took the initiative for persuading governments of these countries for setting up the association for regional cooperation, and obtained support from them. The move was commendable and people in these countries ever since looked for effective use of the regional body. It was important to protect the interests of member countries in different fields including trade, culture and technical collaboration. Collaborative measures are needed to protect their economic interests in the context of globalisation of trade, which has turned favourable to the major developed countries in the world.

The preponderance of the global economic powers in the field of trade and development and the uncertainties about outflow of goods from countries of South Asia is clear. That being so, countries in the region needed to take effective measures for augmenting trade deals. The quantum of trade deals among SAARC countries remains limited to around 4.5 percent of the total trade flows worth around 135 billion dollars per annum. As against that, inter-country trade deals among countries in the European Union accounts for 55 percent of total trade. If the ultimate end of augmenting trade between and among the countries in South Asia is to be attained, then a vigorous move for opening bilateral deals and strengthening regional deals has to be taken forthwith.

The barriers against the flow of goods to and from countries in South Asia are to be removed. The move of the trading community in Bangladesh to export garment products, home-made textile goods, medicine and processed foods plus ceramic products and handicrafts to major neighbour India faces different barriers. It is due to the imposition of terms, like obtaining clearance from Indian authorities about the quality of the products and also the high rates of duty on different items. Similar measures have also been taken by authorities in Pakistan against trade moves of neighbouring countries. The prospect of the growth of trade deals among the seven member countries, especially from the least developed ones, remains uncertain. Efforts have to be made by the official agencies of member countries in the SAARC region to review the prevailing situation. Short and long term deals in the field of trade have to be made for augmenting the growth of the economies of member countries of the SAARC.