KATHMANDU: Services market within the Saarc (South Asian Association for Regional Cooperation) region could be liberalized. Trade ministers from Saarc countries have agreed to negotiate on liberalising the services market within the region.
This will lead to freer movement of people within the region and give a boost to investments in areas like tourism, financial services and telecom. Saarc is constituted of countries like India, Pakistan, Nepal, Bhutan, Bangladesh and Maldives.
Saarc secretary general Sheel Kant Sharma told TOI that an expert group had been constituted to draft the agreement on services. He said the group has made considerable progress in preparing the draft. The endeavor is to complete the draft agreement before the next Saarc summit in April 2010, Sharma said. The move will provide a boost to the trades among the Saarc countries as services accounts for more than half their GDP.
Sharma said that the recent trend in the intra-Saarc trade is encouraging. He said in the first six months of 2009, the value of intra Saarc trade was $377 million, which is more than the traded amount for the entire 2008, Sharma said. Intra-regional trade share in 2008 in the case of South Asia was 4.31% as against 27.06% in case of Asean. In order to increase the trade volume, Saarc countries have decided to prune the negative list of items that are not covered under South Asian Free Trade Agreement (SAFTA). The seven Saarc countries concluded the SAFTA on January 6, 2004 as an effort to pursue greater economic integration in the region.
To provide fillip to SAFTA, India unilaterally prune its negative list for least developed countries (LDCs) from 744 items to 500 items. Nepal, Bhutan, Bangladesh and Maldives constitute LDC in SAFTA. Not only this, India is also working to reduce the negative list for the non LDCs also. In order give further boost to the intra SAARC trade, Sheel Kant Sharma said a further pruning of the negative list should be done. He hoped that before the SAARC next summit, it could happen.
To give boost to trade in the region, Saarc launched a trade information portal recently. The portal that was launched by Nepalese commerce minister Rajendra Mahto will be a single opoint access for all current Saarc-related business and trade information.
Bsides the policy issues, the biggest stumbling block for flourishing the trade in the region is the lack of information and the availability of physical infrastructure to transport of goods. He underlined the needs for developing such infrastructure to give a boost to the trade in the region.
Source : TOI