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KATHMANDU, Monday (AFP)

The seven-member South Asian regional bloc representing one-fifth of the world's population on Monday said the process of forming a common market, mired in squabbling since 1998, is finally set to start rolling.

Nihal Rodrigo, the outgoing secretary general of the South Asian Association for Regional Cooperation, said the complex process of negotiations had been kick-started by the weekend SAARC summit in Kathmandu.

The last meeting of the SAARC members -- Bhutan, Bangladesh, India, the Maldives, Nepal, Pakistan and Sri Lanka -- was in 1998, with summits postponed by Indian-Pakistani bickering.

The seven South Asian leaders in a declaration Sunday pledged to finalise a draft South Asian Free Trade Agreement (SAFTA) by the end of 2002.

"There was a virtual embargo on the meeting of the commerce ministers together for SAFTA. That will be a little easier now, but we will have to push quite a lot to get it going now," Rodrigo said.

The draft SAFTA treaty will set various deadlines that will help bring about the ultimate objective of free trade in the region.

Rodrigo acknowledged it was not an easy task but said bigger countries such as India and Pakistan would probably have to take the lead "while smaller countries may want a little more time."

He said there were at least 20 to 30 major points of contention that will have to be settled on a priority basis.

SAARC was originally expected to establish a framework treaty for a free trade area by the end of last year.

So far trade within the grouping is just four percent of the total volume of trade conducted between the countries and the rest of the world.

But Sunday's declaration saw some positive signs with members agreeing on the need to remove tariff and non-tariff barriers and reducing bureaucratic hurdles that hamper investment.

They also agreed to improve transportation, such as air links, between the countries to make trade easier.

However, industry officials felt these would not amount to much unless members agreed to synchronize duty structures and actually go ahead and reduce import tariffs.

Rodrigo said the association should come together so that it is not only World Trade Organisation-compatible, but more competitive in a globalised environment.

He said the WTO was the issue that brought together SAARC members for a trade meeting, with all countries including India and Pakistan agreeing in New Delhi to take a common position against imbalances in the organisation and asking for a better share of trade.

"If there are seven voices which talk of South Asia and its market -- and it is a huge market -- then nobody in the world can ignore such a grouping," Rodrigo said. 

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