South Asian Free Trade Area (SAFTA)

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  • Preetam asked: What are the achievements of SAFTA and its future prospects?

    Smruti S. Pattanaik replies: SAFTA was ratified in 2006. Under SAFTA, trade concessions are offered to two categories of countries – the LDCs and non-LDCs. It provides unilateral concession on 4,536 tariff lines to the five LDC countries of South Asia. India has now announced zero tariffs to the LDC countries. The tariff reduction is contained in article 7 of SAFTA. For smooth implementation, SAFTA has established a committee of experts to review its progress. They help the SAARC ministerial council consisting of Commerce Ministers who periodically review the working of SAFTA. The seventh meeting was held in February this year. This meeting reviewed the revised sensitive list in phase two where each country is required to bring down the sensitive list to adhere to zero tariffs within the timeframe envisaged by SAFTA.

    SAFTA has trade facilitation measures contained in Article 8. Trade within the region is increasing and in August last year the intra regional trade was US$ 1.3 billion. SAFTA process would get a boost with increased connectivity within the region and establishment of multi-modal transport network that will facilitate free trade.

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    Instead of taking up new areas in its summit declarations, SAARC should focus on trade, connectivity and security and the need to develop a regional identity. Only a regional identity will generate a regional approach.

    May 07, 2010

    Can SAARC hold the Regional Dream?

    SAARC has in recent years attracted wide international attention and generated much interest among countries that now hold Observer status. The 15th Summit held in Colombo on August 2 – 3, 2008 renewed its pledge to take SAARC from a declaratory to the implementation stage. Four agreements were signed at the Summit on mutual assistance to address criminal activities, trade, combating terrorism and climate change. The theme of the 41-point Colombo Declaration announced at the end of the Summit was “Partnership for Growth for Our People.”

    August 07, 2008

    Pakistan’s New Trade Policy: A Step in the Right Direction?

    At a time when Pakistan’s phenomenal economic growth of the past few years under the Musharraf regime has hit a severe road block, the country’s Trade Minister Ahmed Mukhtar, who also holds the defence portfolio, announced a new trade policy on July 18, 2008. The announcement of the new trade policy has been governed by the state of Pakistan’s economy, which has been on a downward spiral since February.

    August 05, 2008

    India-Bangladesh Relations after the Foreign Secretary Level Talks

    The recently concluded Foreign Secretary level talks in Dhaka between India and Bangladesh saw agreement on three broad issues. The first of these related to sharing of intelligence pertaining to security. Secondly, India agreed to provide greater access to Bangladeshi goods to the Indian market, as earlier announced by Prime Minister Manmohan Singh during the SAARC summit held in New Delhi. And thirdly, the two countries agreed to take steps to implement the 1974 Indira-Mujib land boundary agreement, which has been a long-standing demand of Bangladesh.

    July 17, 2007

    Troubled Road to SAFTA

    The proposal to reconvene the 13th SAARC Summit soon has rekindled the hopes of South Asian Free Trade Area (SAFTA) coming into force on schedule on 01 Jan 2006. It is a sad commentary on the regional economic cooperation that although the South Asian Association for Regional Cooperation (SAARC) has been in existence for about 20 years, the intra regional trade is still languishing below five percent of the global trade of the member states. It is widely believed that all the seven states of the region will benefit immensely in the long run from the economic benefits of SAFTA.

    March 10, 2005

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