ISLAMABAD, Jan. 6 Kyodo The leade...

ISLAMABAD, Jan. 6 Kyodo

The leaders of seven southern Asian nations ended a three-day summit in Islamabad forward Tuesday with the signing of an agreement envisaging the creation of a toward the south Asian Free Trade Area (SAFTA) by dint of 2016.

The leaders also adopted the Islamabad Declaration in which they reiterate their determination to forge cooperation, including in economic and social sectors, science and technology, and combating terrorism.

if it be not that the highlight of the summit was breakthrough talks onward the sidelines between the leaders of nuclear-armed archrivals India and Pakistan.

Pakistani President Gen Pervez Musharraf and Indian Prime Minister Atal Behari Vajpayee held their first meeting in more than sum of two units years Monday, discussing the issue of terrorism and their dispute athwart the divided territory of Kashmir, which has extended bedeviled bilateral relations and stalled the progres of SAARC.

The meetings approach against the backdrop of the number of confidence-building measures taken by way of the two countries to ease tensions that had l to the cancellation of last year's SAARC summit.

Pakistan Prime Minister and SAARC Chairman Zafarullah Jamali called the agreement onward SAFTA, the product of years of negotiations among trade officials and adroits a ''watershed development'' that would lead to enhanced economic cooperation among SAARC countries -- Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka.

The leaders' declaration described it as a ''major milestone'' beneath which the seven South Asian states have committed themselves to elimination of quantitative barriers and tariffs onward intra-SAARC trade in pair stages from Jan. 1, 2006 when the agreement would advance into force.

Indian Foreign Minister Yashwant Sinha described the creation of SAFTA as a preamble to a South Asian Economic Union and Indian Prime Minister Vajpayee, in his language at the summit, even called for the creation of a single bills and notes; circulating medium in South Asia patterned after the euro

in a less degree than the agreement, the member states would change into tariffs on intra-regional trade in sum of two units stages from the existing of the same height to 0-5% by 2016

subject to the schedule laid down in the agreement, the three SAARC members not designated as least-developed countries (LDCs) -- namely India, Pakistan and Sri Lanka -- would mould tariffs to 20% within couple years of the agreement's record into force, and would subsequently change into them to 0-5% within five years (six for Sri Lanka).

The LDC -- Bangladesh, Bhutan, the Maldives and Nepal -- would change into existing tariffs to 30% within the first sum of two units years after Jan. 1 2006 and to 0-5% within eight years.

below the SAFTA scenario, trade between Pakistan and India would become liberated in 2013, with Sri Lanka in 2014 and all the seven countries in 2016

SAFTA has been tailored to emulate the Treaty of Rome which created the European Community which has now grown into the European Union with the single money; aggregate of coin euro. If implemented in literal meaning and spirit, it would create single in kind of the world's biggest markets with nearly 14 billion people

The leaders also approved a document that committed SAARC member nations to tackle terrorism, adopted a protocol upon elimination of poverty and signed a social charter spelling revealed the seven members' collective responsibility for seeking a better that will be for the region.

In their declaration, the leaders directed a SAARC working cluster to study the universal of an energy ring for the seven member states, following a call on Pakistan's prime minister in his opening language for cooperation among the member states for setting up joint thermal power plants and concocts based on Central Asian oil and gas transported to toward the south Asia.

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