Colombo, Aug 23 (IANS): South Asian nations need to fast track economic liberalisation to increase their current $2.5 billion worth of trade and catch up with East Asian nations, a senior official said here Friday.

South Asian Association for Regional Cooperation (SAARC) Secretary General Ahamed Saleam, addressing the 7th South Asian Free Trade Area (SAFTA) Ministerial Council meeting in Colombo, called for greater reduction of sensitive lists, non-tariff barriers and aligning of customs procedures to boost trade in one of the most populous regions in the world.

According to figures available to the SAARC Secretariat, SAFTA trade has crossed the $2.5-billion mark, which is largely due to member states reducing sensitive lists by at least 20 percent before the 17th SAARC Summit in 2011, he said.

However, Saleam admitted that SAARC is still often criticised because its regional trade is low compared to other regional organizations such as the Association of Southeast Asian Nations and Latin American Free Trade Association.

"One of the reasons cited is that the number of trade items in the region is still in the sensitive lists of the member states such as agriculture commodities. I am happy however to note that the Phase II exercise to further reduce sensitive lists and liberalise those lists have been undertaken and two meetings in this regard have already been held," he told delegates from member countries.

Saleam also acknowledged that larger volumes of trade are taking place via bilateral free trade agreements inked between SAARC members than through SAFTA but insisted that both forms could be integrated for common growth.

The Trade and Services Agreement that was signed in 2007 has also been ratified and Saelam appealed to SAARC leaders to fast track its implementation.

SAFTA is an agreement reached in January 2004 at the 12th SAARC summit in Islamabad, Pakistan. It created a free trade area of 1.8 billion people in Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka.

The seven foreign ministers of the region signed a framework agreement on SAFTA to reduce customs duties of all traded goods to zero by the year 2016.