A Subcontinental free trade utopia

It was unlikely for the plebeians to have missed the self-congratulatory tide which followed the January 2004 Islamabad SAARC summit. The South Asian Free Trade Area (SAFTA) agreement signed by the foreign ministers of the seven SAARC countries was hailed as the biggest outcome of the summit and the framework for the Free Trade Area (FTA) which SAFTA envisions was projected as the remedy to alleviate the economic woes of the region. While the thaw in the relations between the two 'biggest' players in the area was a positive step, setting aside the compulsions of an upcoming election in India and the ex-gratia benefits of good neighbourly behaviour on the part of Pakistan, the agreement on trade liberalisation and intra-region free trade in goods needs to be reviewed in the face of pretentious optimism.

Globally, regional trading agreements (RTA's) have been proliferating over the second half of the 1990s, enabling many states to gain from freer trade. Depending on the level of integration, these have ranged from preferential trading agreements, free trade agreements such as the North American Free Trade Agreement (NAFTA), customs unions such as Mercosur (a Latin American regional integration mechanism with Argentina, Brazil, Paraguay and Uruguay as full members, and Bolivia and Chile as associate members), to economic union such as the European Union (EU). The SAFTA agreement is a higher stage in the evolution of the earlier SAARC Preferential Trade Agreement (SAPTA) of 1993.