KARACHI, Jan 6: President Karachi Chamber of Commerce & Industry (KCCI) Siraj Kassam Teli on Tuesday welcomed the South Asia Free Trade Area (Safta) treaty and described it as a milestone in the regional economic cooperation.

The KCCI chief in a press statement observed that the treaty had provided a frame-work, in which free trade area would operate and be effective on January 1, 2006.

"This period could be utilized to give input by the stakeholders to their respective governments," he added. He said that the chamber had already constituted a special committee on regional trade, under the chairmanship of its former president A. Q. Khalil, to frame recommendations for the promotion of intra-regional trade and economic cooperation.

Mr Teli argued that to combat the challenges, being unfolded by the globalization and liberalization of trade, it was essential that the developing countries like Pakistan, should have strong economic linkages with the regional countries, under a single umbrella.

"The reactivation of Saarc would provide an effective forum to collectively deal with the protection policies of the developed countries," he observed. He regretted that the intra-regional volume of trade in the Saarc has been within the vicinity of 4 to 5 per cent whereas in European Union (EU) it was around 60 per cent and in ASEAN it was about 26 per cent.

He hoped that with the implementation of Safta, the volume of intra-regional trade would move to 20 per cent and it would also contribute in checking the menace of smuggling from India and the present volume of bilateral trade of $237.23 million would jump at least to $1 billion.

He felt that the duration of its implementation appeared to be quite longer, particularly in the wake of complete operation of WTO regime in 2005. He also hoped that the degree of economic cooperation, as envisaged in the treaty, would only be possible if all political issues are amicably settled, as no economic cooperation could be sustained without political unanimity in the region.

Meanwhile, Zubair Ahmed Malik, president of Islamabad Chamber of Commerce and Industry (ICCI), has also lauded the signing of Safta treaty. In a press statement here on Tuesday he said that this was a landmark development since the South Asian Association of Regional Cooperation was formed 18 years ago.

He said that it had been agreed to create effective mechanism for the implementation of the provisions made in the treaty. Mr Malik emphasized that the Saarc countries had the potential to double intra-regional trade every five years from the current annual level of $6 billion.

In particular, the private sector in Saarc countries must now gear up efforts to realize the ground realities and stimulate intra-regional trade and economic cooperation, which would guarantee peace and prosperity among its member countries.-APP