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Trade is key to the success of SAARC

New Delhi, Sep 14 (Calcutta Tube) The South Asian Association for Regional Cooperation (SAARC) could become a success if there was adequate stress on trade promotion and facilitation, its secretary-general Sheel Kant Sharma said Tuesday.

‘In the age of liberalisation and deregulation, trade promotion remains one fertile field for growth of regionalism,’ said Sharma, who was appointed to the post in March 2008.

In a speech on prospects and challenges of South Asian regionalism at the Indian Council for World Affairs, Sharma said that the South Asian Free Trade Agreement (SAFTA), which went into force in 2006, showed that despite bilateral issues, there was a way to move forward.

‘Success in trade, transit and transport would have their impact all along the value chain. Therefore, trade, transport and related investment remain key to SAARC’s success,’ he said.

He noted that SAFTA is leading to development of new networks of regional trading patterns in different products.

As per a 2008 Asian Development Bank study, SAFTA has the potential of $85.1 billion worth of trade. Currently, trade under SAFTA certificates of origin was $687 million, which is rather modest but significant for initial years, Sharma said.

However, at the same time, the key impediment to strengthening regional cooperation is lack of physical and soft connectivity, he noted.

‘Infrastructure constraints like power shortages, underdeveloped road and rail transport constraints, port congestion etc., seriously hinder full realisation of regional trade potential,’ said Sharma.

He lamented that the media in south Asia was not able to understand the importance of SAARC.

‘Media in South Asia need to understand the enormous value of the SAARC paradigm of interdependence, engagement and pursuit of mutual benefits instead of zero-sum policies,’ he noted.

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