I thoroughly enjoyed reading your cover story on trade within the SAARC region. Though it was enlightening to get a balanced viewpoint put forth by different arguments, trade in SAARC will always remain at a dismal level. Unfortunately, the two big players, India and Pakistan, who essentially hold the future of the entire region in their hands, will never look beyond their political hostilities and it is unlikely that the two will be able to conduct free trade before resolving outstanding issues, such as Kashmir or domestic market encroachment. Pakistan granting India a symbolic MFN status means little, even though the matter has been deemed as a breakthrough in relations. The process remains incomplete and it is uncertain whether the status will be accorded by October 2012. It will be critical to see if Pakistan moves beyond an ‘all talk, no action’ stance and conducts trade with India. On the other hand, even though India had granted the MFN status to Pakistan in 1996, Pakistan exports lie at a mere $287 million compared with the $1.5 billion Indian exports to Pakistan. While it may be a step in the right direction for South Asia, it may be too early to celebrate just yet.
Ahmed Kapadia Karachi, Pakistan
(2) INTER-SAARC trade has never been more crucial. With the global economy in shambles, regional trade should take precedence. India, one of the world’s greatest emerging markets, can lead the trend. India already has free trading agreements with various South Asian countries, including Bangladesh, Sri Lanka, Bhutan and Nepal. Since all countries lie in similar climates and specialize in agricultural and primary goods, much can be gained by regional trade. It is imperative to set aside political rivalries for the sake of prosperity. While some view this as unattainable, it must be remembered that the same model was adopted for the EU, which today is a conglomerate of countries engaged in economic cooperation, despite having fought a number of wars and still victim to unresolved issues. Looking at the region as a whole, due to climate conditions, labor expertise and capital, each of the countries has a comparative advantage in the production of primary and secondary goods. If an inter-saarc trade agreement were drawn up keeping in mind a relevant specialization area, the region would immensely benefit, reduce production costs and become the hub of commercial activity. The potential in South Asia is unprecedented. It just remains to be tapped. Aveenath Kumar Delhi, India