Non-tariff barriers set back trade in S Asia | The Daily Star
12:00 AM, October 23, 2011 / LAST MODIFIED: 12:00 AM, October 23, 2011

Non-tariff barriers set back trade in S Asia

Analysts tell the fourth South Asia Economic Summit

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The South Asian analysts yesterday found that non-tariff barriers, lack of connectivity, informal trade, rigid border and lack of banking facilities in the bordering areas are the major obstacles to accelerate trade in this region.
The observation came at a session of the fourth South Asia Economic Summit on "Acceleration of trade in South Asia: Where are the current obstacles?", at Ruposhi Bangla Hotel in the capital.
The businessmen of the region largely depend on the raw materials imported from the countries outside of the area, despite having the potential of becoming raw materials suppliers for each other, they said.
They mentioned the example of textile and garment. The member countries of South Asian Association for Regional Cooperation (Saarc) trade only 18 percent textile among themselves although India, Pakistan, Sri Lanka and Bangladesh are strong global players in textiles and garment, the analysts added.
India and Pakistan are strong in textile while Bangladesh and Sri Lanka are strong in garment, they said, adding that both India and Pakistan has the ability to meet the demand for fabrics of the other two countries alone.
Most of the trades among the Saarc region take place on supply and demand basis, not through agreements.
As a result, the Saarc countries lag behind other trade blocs like Association of Southeast Asian Nations (Asean) in intra-regional trades.
The intra-regional trade under the Saarc umbrella is more than 4 percent while the trades among Asean countries are nearly 40 percent.
Roads and highways of this region are not still ready for boosting the trade, said Ajitava Raychaudhury, a teacher of economics at Jadavpur University in India.
“The banking system has also not yet developed in the bordering areas of Saarc member countries,” he said.
Most of the trades take place bilaterally, not under the Saarc umbrella, said Nisha Taneja from Indian Council for Research on International Economic Relations.
Taneja mentioned the bilateral trades between India-Bangladesh and India-Sri Lanka.
The South Asian market is a divided one, although it was a common market before 1947, said A Matin Chowdhury, former president of Bangladesh Textile Mills Association.
He said India is a big player in the area. “So, India is a major factor to increase trade in this region.”
Bureaucrats act like the custodians, for whom many good political decisions were not implemented for increasing the trade and connectivity, he added.
Product diversification is a major challenge for increasing the intra-regional trade, said Hamid Mahmood, director (advocacy and outreach) Global Research Insight for Development, Pakistan.
“The trades with Pakistan with other Saarc member countries are low because the internal market of Pakistan is not made yet,” he added.
Biswajit Dhar, director general of Research and Information System for Developing Countries, India chaired the session.

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