SAARC South Asian Association for Regional Cooperation Free trade

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Course summary (South Asian Association for Regional Cooperation SAARC):

South Asian Free trade area (SAFTA). Economic Union. Communications, transport, ... Preferential Trading Arrangement (SAPTA) SAARC.

The South Asian Association for Regional Cooperation (SAARC) was established when its Charter was formally adopted on December 8, 1985 by the Heads of State or Government of Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka.

Until 2009 China, Japan, Republic of Korea, USA, Iran, Mauritius, Australia, Myanmar and the European Union have joined SAARC as Observers.

SAARC provides a platform for the peoples of South Asia to work together in a spirit of friendship, trust and understanding. It aims to accelerate the process of economic and social development in member states. With the world’s most populous country, SAARC is home to nearly 1.5 billion people or about 22% of world’s population. South Asia’s external trade has been increasing at a faster rate than the growth of world trade. While world trade increased at an annual rate of 11% between 2000 and 2006, South Asia’s exports to the world increased annually by 16.8% and its global imports increased at an annual rate of 21.5%.

SAFTA enhances the possibility of increased foreign direct investment (FDI) inflows into the region. By ex: in Nepal, several Indian companies have set up plants for production of fast moving consumer goods for serving the Indian market.

SAARC has also initiated action on a series of practical measures to facilitate the process of economic integration. A group on customs cooperation was set up in 1996 and so far has held three meetings. It was inter-alia decided to harmonize HS lines and customs rules and regulations, simplify procedures for intra-regional exports; upgrade infra-structural facilities and provide training facilities. A customs action plan was drawn up in Islamabad in April 1997 and agreed by all member states.

SAARC Preferential Trading Arrangement (SAPTA)
In December 1991, the Sixth Summit held in Colombo approved the establishment of an Inter-Governmental Group (IGG) to formulate an agreement to establish a SAARC Preferential Arrangement (SAPTA) by 1997. Given the consensus within SAARC, the Agreement on SAPTA was signed on 11 April 1993 and entered into force on 7 December 1995 well in advance of the date stipulated by the Colombo Summit. The Agreement reflected the desire of the member states to promote and sustain mutual trade and economic cooperation within the SAARC region through the exchange of concessions.

SAPTA was envisaged primarily as the first step towards the transition to a South Asian Free Trade Area (SAFTA) leading subsequently, towards in customs union, common market and economic union.

Example of the course South Asian Association for Regional Cooperation SAARC:

South Asian Free trade area (SAFTA)
SAPTA was envisaged primarily as the first step towards the transition to a South Asian Free trade area (SAFTA) leading subsequently towards a Customs Union, Common market and Economic Union. In 1995, the Sixteenth session of the Council of Ministers (New Delhi, 18-19 December) agreed on the need to strive for the realization of SAFTA and to this end an Inter-Governmental Expert Group (IGEG) was set up in 1996 to identify the necessary steps for progressing to a Free trade area.

The Agreement on South Asian Free Trade Area (SAFTA) was signed on 6 January 2004 during the Twelfth SAARC Summit in Islamabad. The Agreement entered into force on 1 January 2006.

Currently, the Sensitive Lists of products, Rules of Origin, Technical Assistance as well as a Mechanism for Compensation of Revenue Loss for Least Developed Member States are under negotiation.

Under the Trade Liberalisation Programme scheduled for completion in ten years by 2016, the customs duties on products from the region will be progressively reduced. However, under an early harvest programme for the Least Developed Member States, India, Pakistan and Sri Lanka are to bring down their customs duties to 0-5 % by 1 January 2009 for the products from such Member States.

Asia Scholarships

Topic: Globalization and regionalization

Web site SAARC

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