Business»
Pvt sector for true free trade in S Asia
KATHMANDU, APR 20 -
South Asian business executives on Tuesday urged that genuine free trade be established in the region, and that it should not be watered down by linking it to extraneous political considerations.
On the eve of the 16th summit of the South Asian Association for Regional Cooperation (SAARC) slated to be held in the Bhutanese capital from April 28-29, they emphasised that the subcontinent should come out of politics simultaneously by resolving political differences and expanding economic integration.
Speaking at a roundtable on the South Asian Free Trade Area which was organised to identify bottlenecks at various levels and operationalize SAFTA’s issues and options, business leaders pointed out that economic cooperation among the member countries would play a decisive role in diffusing political tension.
“Since the signing of SAFTA in 2004, SAARC has made some improvements with regard to regional trade integration. However, intra-regional trade at present remains close to only 5 percent,” said Kush Kumar Joshi, president of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI).
He added that inclusion of tradable commodities in the sensitive list, non-tariff barriers, high logistic costs and lack of intra-SAARC investment had hampered rapid expansion of intra-regional trade. He said that it was of utmost urgency to address specific issues impeding trade and investment in the region.
The two-day roundtable will focus on cost and cooperation in South Asia, the impact of barriers on intra-SAARC trade and creating synergy for regional integration.
Major issues on tariff liberalization (non-tariff barriers and duty barriers), connectivity, infrastructure development and simplifying travel visas for business entrepreneurs are slated for discussion at the roundtable.
“The issues will be put forward at the summit when the heads of state of South Asia will meet after a week to find a mechanism to spur coordinated efforts towards a better South Asia,” said Tariq Sayeed, immediate past president of the SAARC Chamber of Commerce and Industry.
Intra-regional trade as a share of the overall trade was 3.5 percent in 1970, which declined to 2.4 percent in 1990. Trade slightly increased to 4.1 percent in 1995. At the time of signing SAFTA in 2006, overall trade reached 4.8 percent. However, in 2006 and 2009, trade in South Asia progressed at a snail’s pace. Currently, overall trade stands at 5.8 percent.
“The leadership of South Asia has a noble desire to develop SAARC along the pattern of the European Union and the North American Free Trade Agreement (NAFTA), however, this move requires greater political will to transform it into reality,” Sayeed added.
SAARC Secretary General Sheel Kant Sharma said that the volume of South Asian trade was not satisfactory. He added that intra-regional trade might not grow at a rapid rate due to high transaction costs. Removal of non-tariff and para-tariff barriers, establishment of South Asian regional standards, product certification and implementation of trade facilitation will be vital to expand the trade volume.
“The path from here will determine how we scale up intra-regional trade. For this, there is a need for government-to-government negotiations to deal with the existing sensitive list and preferential treatment of products,” he said.
Business leaders pointed out that increasing intra-regional trade depended on the willingness of India to play a leading role, flexibility in the process of trade liberalization, reduction of high transaction costs and capacity and willingness to be part of global production structures.
Posted on: 2010-04-21 08:44
Headlines
Advertisements
