ISLAMABAD, Feb 8: Pakistan and Sri Lanka expressed the hope on Tuesday that the free-trade agreement (FTA) between the two countries would open a new era of trade and economic cooperation.

After their formal talks at the Aiwan-i-Sadr, President Gen Pervez Musharraf and visiting Sri Lankan President Chandrika Kumaratunga told journalists that both South Asian countries stood to gain enormously from bilateral free trade.

"The FTA will impart a tremendous boost to our economic and commercial ties, we will identify areas for developing greater economic cooperation, this will certainly be beneficial for both," President Musharraf said.

The Sri Lankan leader said her country saw the free-trade accord with Pakistan as a major development in relations between the two countries and believed that it would take bilateral trade to a higher level.

President Musharraf expressed Pakistan's disappointment over the postponement of the 13th Saarc summit which was scheduled to be held in Dhaka on Feb 6-7.

"Pakistan believes that we need to inject more seriousness into Saarc, which is for the benefit of all South Asian countries and postponement of summit does not augur well for the effectiveness of this organization," he said.

He suggested that there should be some formulations where no postponements were possible, saying that the member countries should work collectively to decide about it.

"If a country does not want to attend, it should not, but others should attend - why should any one country have the onus of postponing or scuttling the whole meeting?

"We feel that because of the frequency of postponements we have seen over the past years, we need to collectively decide on what course needs to be taken, so that such postponements do not occur in future."

President Kumaratunga expressed the hope that new dates for the Saarc summit would soon be worked out and the regional body would move forward for the economic wellbeing of all South Asian nations.

Referring to the peace process between Pakistan and India, she said that improvement in relations between the two countries would augur well for regional economic cooperation.

The Sri Lankan leader also commended President Musharraf's efforts for establishment of peace in the region.

"We would like to commend sincerely President Musharraf's efforts at resolving the burning issue of the region, that is the issue of Kashmir, between India and Pakistan -President Musharraf has been very sincere in his efforts." She also lauded Pakistan's role in the fight against terrorism.

"We too have been facing this problem in our country and making efforts for peace, at the moment the cease-fire is holding between rebels and the government," she added.

About talks with India, President Musharraf said: "Our efforts move in tandem on the confidence-building measures and the dialogue process going on between India and Pakistan.

"Pakistan is very serious on moving forward on the betterment of relations between India and Pakistan so that the entire South Asian region benefits from the resolution of disputes to the mutual benefit of the people of the region," he added.

The two leaders said Pakistan and Sri Lanka enjoyed excellent relations in the fields of politics and defence cooperation with Gen Musharraf expressing the hope that President Kumaratunga's visit would further deepen bilateral ties.

The Sri Lankan president thanked the government and people of Pakistan for extending help in the face of Tsunami calamity.

Pakistan's relief assistance was greatly helpful in overcoming the initial difficulties, she said and appreciated Pakistan's rapid response to suffering of Sri Lankan people.

President Musharraf assured the visiting dignitary of Pakistan's continued support to Sri Lanka and said the entire Pakistani nation shared the sorrow and grief of the island in the wake of Tsunami devastation.-APP