ne © © 4 646% 7:15 p.m. Ganges oy Take your game ta the nextlevel. ee’. Se The major reason for meager intra- SAARC trade is low volume of trade between Pakistan and India, the largest economies and trading nations in the region. SAFTA In order ta achieve the objectives of SAARC and increase regional integration, the member countries created South Asian Free Trade Agreement (Safta) in 2004 at the twelfth SAARC summit. The agreement, which came into force on January 1, 2006, provides that members will reduce their tariffs to 0-5 per cent by December 31, 2015. The success of Safte, however, largely depends on normalization of Pakistan-India relations. In case the relations between the two countries de not normalize, Satta’s fate will not be different from that of its predecessor, South Asian Preferential Trade Agreement (Sapta) Reasons for Low Trade The major reason for meager intra- SAARC trade is low volume of trade between Pakistan and India, the largest economies and trading nations in the region. Though formal Pak-India trade (the two countries have informal trade of more than $3 billion a year) has increased fromm $236 million in 2001-2002 to $1.95 billion in 2007-08, it still constitutes less than 7 per cent of the global trade of the two cauntries!ne © W 4 46% 7:15 p.m. — oy Take your game to the next level. ee’. Maximize your rewerue. Pakistan has not even granted MFN status, a basic requirement under the WTO, to India and continues to conduct its imports from India on the basis of a positive list. On its part, India maintains high tariffs and non-tariff barriers on products of export interest to Pakistan. SAARC vs ASEAN The poor trade performance of SAARC stands in marked contrast with that of the neighboring regional alliance-Association of South East Asian Nations (ASEAN). The ASEAN countries account for mercly 8.4 per cent of the total world population. However their share in total world trade is nearly 7 per cent. ASEAN’s contribution 10 Asia's total trade is 23 per cent. Intra: ASEAN trade accounts for nearly 30 per cent of the glopal trade of the 10- member countries. ASEAN countries have remained embroiled in territorial disputes but that has not hampered their trade relations. Thimpu Summit and Causes of Failure The two-day 76th summit of South Asian Association for Regional Cooperation (SAARC) held in Bhutanese capital of Thimpu on April 28-29 concluded with a joint declaration expressing the resolve of their leaders to wage common struggle for economic development. improve their inter-