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SAARC Summit Ends with Regional Free Trade Agreement - 2004-01-06

South Asian leaders concluded their three-day summit Tuesday, after adopting a major regional agreement on free trade and combating terrorism. The summit also saw a breakthrough meeting between the leaders of rival neighbors Pakistan and India.

A smoothing over of political differences marked this year's summit of the South Asian Association for Regional Cooperation - known by the acronym SAARC.

While political tensions among the seven members have canceled several summits during SAARC's 18-year history, leaders say the spirit of cooperation at this year's event is historic and groundbreaking.

Bangladeshi Prime Minister Khaleda Zia, whose nation will be the host for next year's summit, praised the new atmosphere of goodwill. "I am happy to see that the spirit of accommodation and cooperation prevailed all through our deliberations," she said.

Speaking at the closing session Tuesday, she noted the completion of a long-awaited plan for a South Asia Free Trade Area. Under the agreement, the SAARC nations will begin drastically cutting tariffs on traded goods in 2006.

The deal is aimed at paving the way for economic union, including plans for a region-wide currency. But receiving even more attention than the summit itself was a meeting between Indian Prime Minister Atal Bihari Vajpayee and Pakistani President Pervez Musharraf.

It was the first meeting in more than two years between the leaders of the two nations, which have fought three wars and numerous skirmishes since their independence in 1947.

While officials released few details of the meeting, a joint statement said the two countries will resume a dialogue on all bilateral issues. That includes the divided region of Kashmir, which both governments claim in its entirety.

Pakistan's Prime Minister Zafarullah Jamali called his own meeting with the Indian leader very productive. Speaking after the close of the summit, Mr. Jamali said peace is only a matter of will for the two countries' leaders. "To put the Pakistan and Indian issue in a box, it's not locked, and I think President Musharraf … and Prime Minister Vajpayee have the master key," he said. "They can open it whenever they feel like."

After almost returning to war in 2002, Pakistan and India have launched a series of peace gestures in recent months, including a cease-fire in Kashmir.