KATHMANDU: South Asian consumers stand to gain hugely from enhanced intra-regional trade, according to the experts. One of the main reasons why intra-regional trade in South Asia failed to take
off is lack of political will in taking the SAFTA negotiations to the next stage, said secretary general of CUTS International Pradeep Mehta, speaking on the importance of the summit of South Asian leaders. “The annual savings of consumers could be as much as $2 billion,” Mehta said, adding that many products with regional trade potential are still kept out of bounds of the Agreement’s tariff liberalisation programme for fear of disturbance to domestic industries from import competition.
According to a study undertaken by CUTS with support from The Asia Foundation and in collaboration with prominent think tanks from five major South Asian countries, the South Asian Free Trade Agreement (SAFTA) holds the key to realise this gain.
The SAARC Summit to be held in Maldives in this week provides a good platform for South Asian leaders to renew their commitment toward greater regional integration.
Though South Asian economies have achieved significant growth in international trade, expansion of trade relationships has been mostly with trading blocs outside the region.
There are many product categories in which imports are currently sourced by South Asian countries mainly from Europe, South East Asia and the Middle East, while they could resort to cheaper imports from regional trading partners, who have export competence in such products.
The CUTS study entitled Cost of Economic Non-Cooperation to Consumers in South Asia shows that in about 355 excluded products listed by SAFTA members, there exists very strong prospects for higher regional trade if preferential tariff rates under the Agreement are applied to them.