U.S. Reaffirms Support for South Asian Free Trade Agreement

October 24, 2005

NEW DELHI -- The United States today urged South Asian nations to unshackle trade barriers among themselves, and find tangible ways to transform the South Asian Free Trade Agreement (SAFTA) into a working agreement.

Speaking at the opening of the October 25-26 conference on “SAFTA: Opportunities and Obstacles” in New Delhi, the U.S. Embassy’s Deputy Chief of Mission Robert O. Blake said SAFTA would significantly improve regional growth, job creation and poverty reduction. He committed U.S. support for South Asia’s economic development and regional integration, saying it was one of the most important U.S. goals.

Policymakers, trade and business leaders from Afghanistan, Bangladesh, India, Nepal and Sri Lanka, and representatives from SAARC, UNDP, the World Bank, the Asia Foundation, CII and the U.S. Mission in India are attending the meeting sponsored by the U.S. Agency for International Development (USAID) to discuss implementation of the trade liberalization framework. SAFTA, signed nearly two years ago, goes into effect on January 1, 2006.

“This is a valuable opportunity to bring together representatives from the region to openly discuss trade and investment potential,” said Blake. President Bush has long recognized the importance of the Subcontinent and has made strengthening bilateral relationships with all the countries in the region a priority, he remarked. He aims to move our relations with South Asia “to the next level,” he said.

“Many themes of America’s worldwide foreign policy apply across South Asia. Helping create stronger democratic institutions is a central U.S. goal in many of these countries,” he commented.

“The potential of SAFTA-type arrangements in the region are enormous, given that the South Asian Association for Regional Cooperation (SAARC) now accounts for less than 6 percent of total regional trade. In comparison, he noted: “Within the Association of South East Asian Nations and the European Union, regional trade accounts for 30 percent and 65 percent respectively.”

Pointing to the North American Free Trade Agreement (NAFTA) as an example of what can be achieved, he remarked that total trade among Mexico, the U.S. and Canada has more than doubled, increasing from $300 billion in 1993 to well over $600 billion within a decade.

Blake said member countries should liberalize highly restrictive “sensitive lists” that limit trade; pursue trade facilitation measures that level the playing field and remove barriers; explore other areas of cooperation, such as cross-border investments; and quicken the pace for rolling out tariff cuts. “The United States urges South Asia to continue this positive momentum. We can be counted on for continued support for this vital agreement,” he concluded.