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South Asian Leaders Fail to Finalize Free Trade Deal

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Leaders from seven South Asian nations have agreed on a number of measures to improve regional ties, at the end of a two-day summit in the Bangladeshi capital. But the members of SAARC, the South Asian Association of Regional Cooperation, failed to finalize details for a regional free-trade agreement.

Indian Prime Minister Manmohan Singh says he was satisfied with the achievements of the SAARC summit, despite his apparent disappointment on one issue, the failure of member states to ratify SAFTA, the South Asia Free Trade Agreement

"We must expedite the process of resolving the few outstanding issues that separate us from the final agreement on SAFTA," he said.

SAFTA is meant to create a regional economic bloc to eventually rival the Association of Southeast Asian Nations and the European Union. Officials say they remain hopeful it can begin to go into effect by its original deadline of January 1.

SAARC groups India, Bangladesh, Pakistan, Nepal, Sri Lanka, Bhutan and the Maldives, but it will soon have an eighth member, with leaders agreeing to allow Afghanistan into the forum.

South Asia is home to one-fifth of the world's population, including some of the poorest. SAARC leaders have declared the next 10 years to be the Decade of Poverty Alleviation.

To that end, leaders have agreed on new measures related to customs, tax and investment, meant to pave the way to a SAFTA agreement. Increased regional trade, they say, will contribute to improved standards of living. They have also decided to liberalize visa requirements for residents to travel across the region, including journalists.

Member states also decided to form a disaster management center, to be based in India, to improve the region's response to humanitarian crises. Millions of people remain homeless following October's deadly earthquake in Kashmir, and others since the Indian Ocean tsunami struck three South Asian nations in December.

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