Intra SAARC Trade

India, Pakistan, Sri Lanka and five other South Asian nations pledged to cut trade barriers to spur growth, underscoring the importance of regional groupings after collapse of WTO talks. The leaders of the South Asian Association for Regional Cooperation (Saarc), which also includes Afghanistan, Nepal, Bangladesh, Maldives and Bhutan, agreed to slash the number of items on the ‘‘sensitive’’ list of commodities that are banned from trading and include services in their freetrade pact. South Asian nations, where a quarter of the world’s population lives, have each kept about 800 items outside their free-trade accord — almost double the number of goods excluded from India’s accord with the Association of Southeast Asian Nations (Asean). That’s undermined trade within South Asia, which contributes less than 2% to global commerce. ‘‘Free trade in South Asia was never implemented in the true spirit,’’ said Ameeta Sarkar, head of the South Asia division at Ficci. ‘‘One hopes, this time the countries go beyond the rhetoric.’’ Intra-Saarc trade is less than 5% of the countries’ total, according to the Ficci. By comparison, trade among Asean accounts for 30% of their total while intra-European Union commerce is about 55%. Saarc’s two-day summit in Colombo ended on Sunday.‘‘We need to open our eyes to the wonder of the great opportunities that we missed,’’ said Lyonchhen Jigme Y. Thinley, PM of Bhutan. ‘‘Furtherance of intra-regional trade is the key to promoting economic growth.’’ The World Bank estimates about 40% of South Asia’s 1.4 billion people live on less than $1 a day. If the region can accelerate growth to 8% a year from the average 6% since 2000 by opening up for greater trade, poverty can be wiped out in one generation, the World Bank says.

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