The leaders of seven South Asian countries in Islamabad Tuesday wrapped up their 12th summit after signing the Islamabad Declaration, pledging to enhance regional cooperation as well as collective efforts to fight against poverty and terrorism.

Addressing the closing session for the three-day summit of the South Asian Association for Regional Cooperation (SAARC), Pakistani Prime Minister Mir Zafarullah Khan Jamali said the meeting was "successful" in reinvigorating the 18-year-old regional forum.

The Islamabad Declaration encompassed regional cooperation in the economic and commercial affairs, poverty alleviation, science and technology, social development, cultural interaction, environment, fight against terrorism, enhanced links in the areas of information and communications and peace and stability in South Asia.

On behalf of their respective head of state and government, the foreign ministers of the SAARC members inked the SAARC Social Charter, the Additional Protocol to the 1987 SAARC Convention on Suppression of Terrorism and the Framework Agreement on South Asia Free Trade Area (SAFTA), the Poverty Alleviation Plan of Action along with other documents aimed at promoting the socio-economic development of member nations.

During the meeting, Pakistan assumed the Chairmanship of SAARC from Nepal. The South Asian regional bloc groups Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka.

The 13th SAARC Summit will be held in Dhaka, Bangladesh, in January 2005.

South Asian nations seal free trade accord

Leaders of the seven South Asian countries on Tuesday inked the Framework Agreement of the South Asia Free Trade Area (SAFTA), at the conclusion of the 12th Summit of the SAARC.

The SAFTA accord, which topped the agenda of the summit, will enter into force by January 1, 2006, after the completion of the required formalities, including the ratification by all the member states.

Under the treaty, the non-least developed countries (NLDC) in the region will reduce their tariffs from an average 30 percent in a period of seven years, from the date of coming into force of the agreement.

The least developed countries (LDC), however, will lower their tariffs to between zero and 5 percent in a period of 10 years.

Each SAARC member state will be allowed to maintain "a sensitive list" of products on which tariffs will not be reduced. The list will be finalized prior the coming date of the treaty.

At the 1998's SAARC Summit in Colombo, capital of Sri Lanka, all member states agreed to work out a treaty to deeper tariff concessions, in a bid to gear up the steps towards the establishment of the South Asian Free Trade Area.

The combined external trade of the seven South Asian countries stands at over US$66 billion. The size of such trade within the region, however, is four percent, a meagre, compared with the around 61-percent size of the kind within the European Union forum.

High tariffs were the main block in the way to bring the seven countries of the region together in ties. Some less developed nations have long been worrying about the hazard that products from comparatively developed nations might flood in their domestic markets, which slowed down the pace of the progress of the free trade deal.

South Asian region represents one fifth of the world population. And more than 40 percent of the 1.4-billion population live on less than US$1 a day, making it home to nearly half of the world's poor.

The free trade agreement, which was hailed by local media as a landmark of the summit, will hopefully boost the regions economy.

During the three-day summit, leaders of the seven countries also weighed the possibility of the establishment of a South Asian Economic Union.

(Xinhua News Agency January 7, 2004)