ASEAN's example

ASEAN's example

It is encouraging to see that ASEAN and China have signed an accord to create the world's biggest free trade area by removing tariffs for their two billion people by the decade's end.

This is a giant leap in their vision of building a trade bloc to rival Europe and the U.S. ASEAN leaders had earlier signed a pact to flesh out the agreement last year to create an ASEAN community along the lines of a unified Europe by 2020.

It aims at creating a common market with common security goals. November's accord will remove all tariffs by 2010, and is part of a wider "plan of action" to develop cooperation in politics, security, military affairs, transportation, information technology and tourism. It will build on two-way trade and is expected to surpass $100 billion this year.

In today's world regional economic grouping for cooperation seems to be the general trend. South Asia needs to emulate this example. Saarc countries have already taken a decision to begin to implement the South Asian Free Trade Agreement from January 1, 2006.

Though Safta would benefit all member nations, in the immediate context following the signing of the agreement the primary beneficiaries will be India and Pakistan. So far, direct trade between India and Pakistan has been very little.

No doubt, Safta will be advantageous for the region, but it might face some hurdles in the way of its implementation. The most important of it could be the failure of India and Pakistan to resolve their disputes amicably.

Tension-free relations between India and Pakistan are a pre- requisite for a successful trade treaty in South Asia. If the region manages to implement the agreement as planned, it will have a far-reaching economic and political impact which would be largely positive. It could also turn out to be the most important confidence-building measure in recent times in South Asia. -- The Dawn, Karachi