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S. Asian Ministers Agree to Establish Free Trade Area - 2004-01-02

Foreign ministers from seven South Asian nations have agreed to establish a regional free trade area. They say a formal agreement will be signed during a summit of the South Asian Association for Regional Cooperation, or SAARC, beginning on Sunday in Islamabad.

The long-delayed understanding to establish a free trade zone in South Asia was reached during a meeting Friday of the foreign ministers of the seven SAARC countries. In addition to India and Pakistan, the 18-year-old forum brings together Bangladesh, Bhutan, Nepal, Sri Lanka and the Maldives.

Indian Foreign Minister Yashwant Sinha says the deal ensures the summit's success.

"I have no hesitation in saying that the Islamabad summit is indeed going to be an extremely successful, [and] a historic summit of SAARC, because we will be adopting, or signing, the agreement on free trade," he said.

Mr. Sinha added that the SAARC foreign ministers have also agreed on measures to fight terrorism and on a social charter meant to improve living conditions in South Asia. The region accounts for nearly 25 percent of the world's total population, with an average income of just $450.

India's foreign minister says the close economic cooperation will also benefit India-Pakistan relations.

"A successful SAARC summit has the potential of rubbing off on all bilateral relationships, including the relationship between India and Pakistan," he said.

Strained relations between India and Pakistan, the two largest SAARC countries, have severely hampered the organization's effectiveness as a regional forum. The two nuclear-capable nations have fought three wars, two of them over Kashmir. The divided region remains a major source of bilateral tensions.

Addressing a gathering of businessmen from the seven South Asian nations on Friday, Pakistan Foreign Minister Khursheed Kasuri reiterated that the resolution of political issues between India and Pakistan is key to a sustainable economic cooperation.

"For all of us know very well that real cooperation will not be sustainable in a political vacuum and in an environment of conflict and confrontation," he said. "That is why Pakistan has been emphasizing the need for a composite dialogue between the two countries, so that all issues of concern to both the countries could be addressed."

Indian Prime Minister Atal Behari Vajpayee is expected in the Pakistani capital on Saturday. But Indian officials say there is no plan yet for a direct meeting between Mr. Vajpayee and Pakistani leaders.

The three-day summit is to begin Sunday in Islamabad, amid unprecedented tight security, in the wake of two recent assassination attempts against Pakistan's president. The capital city's airport will be closed for almost two days, starting Saturday to boost security for the arrival of the South Asian leaders.