The ADB said East and South Asia have been at the forefront of the global drive to establish free-trade agreements in recent years, with around 20 either signed, under negotiation, or proposed by the two regions as of January last year.
Trade between East and South Asia soared by over 114 billion U.S. dollars between 2000 and 2007. Despite that progress, the benefits of the trade were limited and spread unevenly, the ADB said.
"A pan-Asian free-trade agreement would not only increase and broaden the benefits of trade for economic giants China and India, but would also help enormously the rest of the region, particularly smaller South Asian nations like Bangladesh, Nepal and Sri Lanka," said Ganeshan Wignaraja, ADB principal economist for regional economic integration. "Moreover, it could do that with virtually no impact on large economies outside the region."
The ADB said the inking of more free trade agreements is valuable at a time when global trade talks have faltered and protectionist sentiment is on the rise.
It urged countries to further lower trade and non-tariff barriers, boost investment in trade-linked infrastructure, and improve handling of cross-border goods and other administrative procedures to cut costs.
