Tarek Saeed, vice-president of the Confederation of Asia Pacific Chambers of Commerce and Industry speaks during his visit to Dubai.
Saturday, March 12, 2011
South Asia plans a common market
Move to a 'zero tariff' regime by 2016 will pave way for increased regional trade
Dubai: South Asia, the world's most populous region, is gradually moving towards a ‘zero tariff' regime that will lay the ground for a common market, said a top official of South Asia's apex trade body.
However, it may take a long time to create a European Union-type environment in which people could move across borders without visas and other hassles. The region that hosts 1.6 billion — or nearly a quarter of mankind — has been averaging 5-6 per cent average annual growth in gross domestic product since 2000, reaching $900 billion.
The region collectively holds 8.5 per cent of the world's natural resources and intra-regional trade reached $12 billion, or 5.8 per cent of South Asia's total trade. South Asia's seven neighbours created the South Asian Association for Regional Cooperation (Saarc) in Dhaka in 1985, which has been limping for 26 years with little progress. The group later added Afghanistan.
In 2006 it created the South Asian Free Trade Area (Safta) as part of a move to reduce barriers for the free flow of goods and services.
Trade under Safta has been too slow — to reach $682 million only, so far. Businessmen say they are pushing the governments to reduce barriers to increase cross-border trading.
"Doing business with neighbours makes more economic sense that doing it with countries located far away," said Tarek Saeed, vice-president of the Confederation of Asia Pacific Chambers of Commerce and Industry and immediate past president of the Saarc Chamber of Commerce and Industry (Saarc CCI).
"We are now moving towards a ‘zero tariff' regime by 2016 that will pave the way for more movement of goods and services across the region."
The countries are now simplifying the customs procedures, paperwork and finalising land transit, mostly through Indian territory. Saarc, like the GCC, is surrounded by a large country. Most Saarc members surround India, need access through it land to reach their neighbours. A framework is currently being worked on.
South Asia's two biggest neighbours, India and Pakistan, who have fought three wars in 60 years, are currently trying to overcome a number of issues including trying to move away from hostilities to cooperation.
"I believe, it is in the interest of India to pursue good relations with Pakistan. They cannot maintain 600,000 soldiers across the border for too long. The Kashmir issue is also being solved," he said.
For many of them, replacing cross-border terrorism with cross-border trade and tourism will need more courage and initiatives than just holding meetings.
Saeed said his colleagues at the Saarc Chamber are now trying to de-link trade and investment from other political issues.
"There is a growing feeling among business communities across India and Pakistan that there is no other way than to cooperate. Together we could accelerate our growth. For this we are now delinking political issues from trade and economic," Saeed said.
A study shows that imports of goods and capital equipment from India could potentially help Pakistani importers save $1.5 billion annually.
Iqbal Tabish, Secretary General of Saarc CCI, said his organisation has managed to prioritise the economic agenda. "Pakistani members of Saarc CCI can now get an exemption to travel to India — that has prompted a large number of Pakistani traders to become its members and they are now importing products from India without any problem," he said.
Saeed said free movement of people across the region could help the economic agenda move ahead.
"We expect to eliminate barriers and there will be a time when people will move across the borders freely — a process that has already begun," he said.
"This will help Pakistan to secure a MFN status and that could change the trade dynamics in the region," he said.
However, the anti-Indian and anti-Pakistani mentality must change first. India's supremacy had been an issue for Pakistan in dealing with its neighbour — which has been changing. Tariq H. Schon, president of Pakistan Business Council in Dubai, said,
http://gulfnews.com/business/economy/south-asia-plans-a-common-market-1.775025
