Saarc has got the free trade bit right at least. There’s much to learn from the body’s move to standardise product quality in preparation of free trade in food commodities. That it has been forgotten as the essential prerequisite for falling trade barriers shows how much international trade dynamics have been skewed ever since WTO’s Doha round went off track more than a decade ago. Stranger still is the fact that it took eight years for negotiations to reach near-fruition. Common since obviously has its limits.
Once South Asia has got a handle on food commodity standardisation, it is essential to move on to other commodity ranges sooner rather than later. Till recently, Asia was credited with engineering the international bottoming out after the severity of the ’08 recession. But with China revising growth downward and India recording slowing industrial expansion, Asia risks losing significance in a world where Europe’s sovereign debt crisis refuses to go away, US recovery is fragile at best, and high oil prices threaten to derail much of the cross-Atlantic quantitative easing relief.
Opportunities that present themselves today must be exploited forcefully. Once Saarc smoothens out other free trade essentials, there will be a quantum jump in trade within the few countries that comprise the union. The current wave of unprecedented Pak-India trade enhancement is another example of opportunities that must be built upon. Asia’s economies need each other. Technically the international recession may have ended the moment two consecutive quarters failed to register negative growth, but its hangover will trouble international financial linkages for some time to come. It’s not even worth the trouble to quote Europe’s example anymore, so clichéd it has become. Our neck of the woods, long used to postures of political and financial confrontation, still features broadly weak systems and institutions (one of the reasons for the eight year delay). But the signs are good. If Saarc’s initiative is successful, numerous similar trading blocs will mushroom in no time. They have got the basics right.
Free trade requirements
