"Regretfully, volumes of trade within the south Asian region are far, far below what it should be," Peiris said.
Trade volume within the South Asian Association for Regional Co-operation (SAARC) region was only five percent of their total trade compared with 55 percent within the European Union and 22 percent in the South East Asian (Asean) regional economic bloc.
Critics say economic nationalism had robbed the freedoms of the citizens to trade with one another, especially after gaining self determination from British rule allowing producers to prey on consumer with the backing of the state.
Post independent South Asian rulers have imposed trade restrictions on citizens to give large profits to powerful rent seeking nationalist businesses that were perhaps not even seen under the Dutch East India Company.In Sri Lanka in particular, which was among the first countries to restore trade freedoms to people, protectionist businesses had begun to rob citizens' freedoms again.
Meanwhile Pieris said arguments that it was not possible to increase intra-regional trade since south Asian countries export the same products were not entirely valid.
He pointed to Indian vehicle exports to Sri Lanka and the island's plans to import pharmaceuticals from Bangladesh.
"Globally, within each region very strong steps are being taken to promote intra-regional trade," Peiris said.
He noted how Sri Lanka lost its market for tea in Egypt after African countries fixed trade agreements to promote intra-regional trade.
"Although we had a substantial hold on tea markets in some African countries such as Egypt, today these African countries have come together and concluded agreements to promote trade within the African region.
"It had a negative impact on tea exports from Sri Lanka into markets we had in various parts of Africa."
He also noted that 70 percent of Indo-Lanka trade is taking place outside the free trade agreement between the two countries.
"You can have free trade agreements but the impediments we have to deal with today are largely non-tariff barriers," Peiris told the forum organised by the Federation of Chambers of Commerce and Industry of Sri Lanka, the SAARC Chambers of Commerce and Industry and Friedrich Naumann Foundation.
"When you try to export there are numerous problems. We need to simplify trade procedures."
Peiris said some of the problems were a lack of uniformity in banking and problems in transportation, and cargo clearance at national borders.
"The cumulative impact of all these impediments is substantial and constitutes today the major disincentive to increasing trade volumes within the SAARC region," Peiris said.
"We need to give thought to a single clearance certificate."
SAARC member countries need to ensure greater harmonisation of trade procedures and automation of cargo clearance such as using electronic data transmission.
"This can't be done only by formal talks within governments and dealing with only tariffs because non-tariff barriers are pretty inhibitive," Peiris said, adding that SAARC was not only a political entity but that its economic dimension was now critical.
Professional bodies have established a whole network of contacts within the SAARC region and this was one of most significant achievements of the regional grouping up to now.
"Harmonisation of standards, such as among accountants, will contribute to solving the problem."
Peiris noted how in the EU trade led to European countries coming together much closer.
"Trade led to political and monetary union because trade is relatively non-controversial. When you have problems among countries, you can start with areas where there no problems.
"Then you find it easier to deal with seemingly intractable problems as we see from Europe's experience."