Peace for prosperity of South Asian nations
From the experience of NAFTA we could easily state that effective SAFTA will be win-win for all the parties
Md Joynal Abdin
South Asia is one of the most promising regions of the world. Its strategic geographical location, large domestic market of 1.67 billion populations, population dividend of the member countries, and 7.1 per cent economic growth over last decade made it unparalleled around the world. At the same time it is the most vulnerable region of the world due to political unrest, mistrust among the nations, misguidance of the political leaders, cross border conflicts and security concerns. Therefor it is one of the least economically integrated regions of the world. As a result intra-regional trade between the SAARC countries is less than five per cent while intra-regional trade between the Association of Southeast Asian Nations (ASEAN) countries is about 35 per cent and EU countries is about 60 per cent.
Deeper regional economic integration not only increases intra-regional trade but it is also contributing to increase share of the region in the global trade. For example deeper integrated European Union has consistently been the leading exporter over the past 20 years, with exports of US$ 6,162 billion representing 33 per cent of world trade in 2014. The North American Free Trade Agreement (NAFTA) comes second with exports of US$ 2,493 billion accounting for 14 per cent of world trade in 2014. Regional integration increases possibilities of regional value chain development and get more benefit out of the rule of origin system. Therefore countries around the world are involving with more Regional Trade Agreements (RTA) even sometime bilateral trade agreements for mutual benefit. Till date there are 283 RTAs notified to the World Trade Organization (WTO) and currently in force. All WTO member states (164) are involved with one or more RTAs.
South Asian countries namely Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka are member of the South Asian Free Trade Agreement (SAFTA) negotiated under the umbrella of SAARC. SAFTA is in force since January 01, 2006. Till now it is effective only for trade in goods. But SAARC leaders has to be wise enough to move forward into trade in services, free movement of transports, free movement of people, economic partnership and investment, Customs union, Common market, Economic union finally Economic and monetary union. But unfortunately SAARC has experienced several troublesome situations since its inception. Currently it is going through a very crucial period due to the bilateral conflict between its two major rival member states India and Pakistan.
India and Pakistan are first and second largest economies of the SAARC region. Both of the countries are nuclear power holders and fought for several times with each other. It is 20 per cent less costly to have international trade between India (South Asia) and Brazil (South America) than that of the two neighboring states i.e. India and Pakistan. It is less time consuming and economically viable to travel into the UK or Australia from Pakistan rather than come to India. Not only with the India and Pakistan but the situation is same in case of getting and Indian visa from Bangladesh too. Nepal and Bhutan has separate arrangements with India. Its true that India is far ahead of the other South Asian countries in any aspect like, largest economy of the region, having maximum population, biggest geographical territory, skilled professionals, strongest military power, efficient negotiation capacity so on and so forth. But we must remember that Pakistan is also a nuclear power of the region. Only two atomic bomb blast (detonated by either India or Pakistan) is enough to make the region second Hiroshima, to stop long laborious economic growth of the region, to make the life horrible for the South Asian nations. Winner and loser of that nuclear war will be meaningless. None could realize the situation of that terrible condition. Therefor it is our humble request to the South Asian leaders especially to the Indian and Pakistani leaders not to be involved with any types of war again. We are ashamed to see that several countries take either position if any war started between India and Pakistan. But none came forward to seat with the rival parties into a negotiation table and overcome the complex situation through dialogue.
India is aspiring to be the future leader of the South Asian countries. I have full confidence that they have every abilities and possibilities to be the power house of SAARC in near future. But if SAARC does not exist or being further inactive then Indias dream to be the South Asian leader will never be achieved. Any war with the neighboring states will destroy Indias potentiality forever. Lets try to look into the USA, how many times they have fought with Canada or Mexico in last hundred years? Why USA did not involve with any war with Canada or Mexico in last two hundred years? How do they resolve conflicting bilateral issues? Why North American Free Trade Agreement (NAFTA) is one of the successful models of RTA?
NAFTA came into force in January 01, 1994 (younger than SAARC); it has two supplements namely the North American Agreement on Environmental Cooperation (NAAEC) and the North American Agreement on Labor Cooperation (NAALC). Primary goal of NAFTA was to eliminate barriers to trade and investment between the member states namely the U.S., Canada and Mexico. But currently NAFTA enhanced into the CANAMEX Corridor for road transport between Canada and Mexico through USA, hick in US FDI into the Mexico and Canada, many US small businesses depend on exporting their products to Canada or Mexico under NAFTA. According to the Department of Homeland Security Yearbook of Immigration Statistics, during fiscal year 2006 about 73,880 foreign professionals (64,633 Canadians and 9,247 Mexicans) were admitted into the United States for temporary employment under NAFTA (i.e., in the TN status). Additionally, 17,321 of their family members (13,136 Canadians, 2,904 Mexicans, as well as a number of third-country nationals married to Canadians and Mexicans) entered the U.S. in the treaty nationals dependent (TD) status. Currently these three countries are doing about 14 per cent of global trade and intra NAFTA trade is about 35 per cent. Effective NAFTA provides win-win situation for all the parties from either aspect.
From the experience of NAFTA we could easily state that effective SAFTA will be win-win for all the parties. If India, Bangladesh or any other states think that they could make an alternative arrangement of SAARC it would be a nightmare. Because the Asia Pacific Trade Agreement (APTA) or, the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) could not be replaceable to SAFTA. Therefore it is the time to go further with SAARC and make the life meaningful to 400 million poor people of South Asia. Combined intra-regional projects could be taken for facilitating employment to 12 million youth of the region entering into job market each year. As the largest economy of the region India has to take the lead in this regard. India has to be friend of its neighbors rather than to be big boss, regional mafia or big brother of the region. A friendly, peaceful South Asia could lead the India into the Chair of South Asian leader. War and conflict will destroy the enter region and travel into backward for several hundred years.
The writer is Deputy Manager,SME Foundation, Dhaka, Bangladesh
