Dhaka and Colombo have a meagre bilateral trade, which too tilted to the Indian Ocean Island state. As of fiscal year 2001-02, Bangladesh's imports from Sri Lanka totalled $6.12 million while its exports stood at $2.07 million, leaving a $ 4.05 million deficit.

Animal and vegetables fats, oil, plastic and rubber articles, and textiles make the bulk of Bangladesh's imports from Sri Lanka. Its scant exports, on the other hand, comprise jute products, pharmaceuticals, battery and tobacco.

Among the seven member states of South Asian Association for Regional Cooperation (Saarc), only India and Sri Lanka have got an FTA on a bilateral basis. Both India and Pakistan are willing to sign FTA with Bangladesh.

Bangladesh and India initiated joint secretary-level trade talks on the FTA in Dhaka on October 20-22.

Since the prospect of a regional FTA is feeble in the near future, member states now prefer to have an FTA on a bilateral basis.

As a regional trade grouping, Saarc lags far behind such blocs as North American Free Trade Agreement (Nafta), the European Union (EU), the Asean Free Trade Area, the Central American Common Market and Latin American Free Trade Area -- all having regional free trade agreements.

Established in 1985, Saarc could not materialise formation of South Asian Free Trade Area (Safta) mainly because of hostility between the two big players, India and Pakistan.

The Saarc, region with just 3 percent of the world's area, houses 21 percent of the global population with 43 percent living below poverty line.

But the collective share of the region in the world trade is less than one percent while intra-Saarc trade is dismally a low four percent as the region failed to tap the potential for social-cultural exchange and economic cooperation.