Constraints of the Agreement on South Asian Free Trade Area and SAARC Agreement on Trade in Services Militating Against Sub-Regional Trade Proliferation in South Asia

Although the Agreement on South Asian Free Trade Area (SAFTA) was signed in January 2004, it has not substantially contributed to the expansion of regional trade among its contracting states.This article shows how a number of bilateral preferential trade agreements (PTAs) between SAFTA parties act as formidable stumbling blocks against the expansion of intra-SAFTA trade and must be abolished.It critically analyzes SAFTA's constraints, including areas that SAFTA over-and under-regulates, that militate against the expansion of intra-SAFTA trade.Finally, it advocates that SAFTA must be more ambitious in its scope by adding provisions that will help attract foreign direct investment (FDI) and build coalitions for World Trade Organization (WTO) negotiations.