Home Kathmandu Implementation Of SAFTA Imperative For Economic Integration

Implementation Of SAFTA Imperative For Economic Integration

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Kathmandu, Nov 7,2014: Full implementation of the Agreement on South Asian Free Trade Area (SAFTA) was a must to promote trade among the SAARC member-countries thereby leading the region towards the path of economic progress.

In the backdrop of past experiences, it has been realized that the common understandings among top leadership of eight SAARC member countries should be brought into practice to assist the economic development endeavors in the region. Collaboration with the private sector is also crucial to promote joint investment in the region.

The Sixth Colombo Summit in 1991 came up with the concept of free trading arrangement among the SAARC countries and the Agreement on SAARC Preferential Arrangement (SAPTA) was signed at the ministerial meeting during the seventh Dhaka Summit in 1993 for the regional assistance. The agreement entered into force on December 7, 1995, two years before the scheduled time. It is aimed to promote and sustain mutual trade and cooperation in the region. SAPTA has arranged for special provision for the least developed countries.

The South Asian Free Trade Area (SAFTA) was conceptualized to develop common market in the region with the implementation of SAPTA.

The 1997 ninth SAARC Summit held in Male of Maldives directed “Group of Eminent Persons’  to prepare a comprehensive  report on possibilities of inter-regional trade expansion and agreed to follow the group suggestions regarding the promotion of mutual economic assistance and trade in the region. The same group after one year recommended for the establishment of SAFTA to the SAARC leadership to promote mutual economic assistance and trade in the region.

The 12th SAARC Summit held in Islamabad in Pakistan in 2004 endorsed the proposal on the establishment of SAFTA which came into effect from January 1, 2006. Although the agreement is aimed to establish tariff-free market in the region by 2016 AD, bringing down customs duties of all traded goods to zero, it is yet to be fully enforced due to various political and technical reasons.

Although the SAFTA developing countries in SAARC- India, Pakistan and Sri Lanka- have agreed to provide additional tax exemption to the least developed countries Nepal, Bhutan, Bangladesh, Afghanistan and Maldives, the SAARC people have not been benefitted from the agreement.

The SAFTA emphasizes on trade liberalisation, mutual trade facilitation, removing obstructions in trade and commerce, promotion of healthy market, sharing of equal trade benefits to all SAARC countries, effective operation and  joint resolution of disputes for its effective implementation.

Enhancing mutual trade and economic collaboration for expansion of service trade and establishing direct connectivity among the member countries through tourism, education, health, expansion of transport service, marine, land and air routes by promoting free movement of goods, commercial service, income-generating programmes and assisting the South Asian people to get relieved from poverty  is among the goals of SAFTA.

The eighth ministerial meeting of SAFTA held Dhanak focused on the implementation of decisions made by the previous meetings and stressed that the member countries should be more liberal for the promotion of inter-regional trade and economic integration and thereby expanding equal and service-oriented trade. Energy, tourism, health, banking, finance, information technology, education and transport were the main agendas of the Dhaka ministerial meeting.  During the meeting, commerce ministries of all eight countries called for the implementation of the SAFT A to pave the way for establishment of ‘economic union’.

All members in the SAARC are univocal on the essentiality of implementation of SAFTA to improve the economic condition of the region which is a home to 22 per cent of the  global  population and 40 per cent of poor.  But the SAARC people have to wait for more time to see improvements and positive changes in their socio-economic status.

The New Delhi Declaration issued by the 14th SAARC Summit held in 2007 expressed commitments to effective implementation of the SAFTA with regular review of it. Likewise, the 17th Addu Summit reiterated its commitments to the implementation of SAFTA, stressing on the need of reduction of existing customs duty of traded goods and preparing a list of sensitive and negative goods.

It is essential for SAARC to immediately implement commitments it made in various declarations including SAFTA to improve the living standard of the SAARC people with the promotion of their interests and accelerate endevours for economic growth, social progress and social development in the region so to ensure an opportunity to every citizen in which s/he could live with dignity and feeling of meaningful creature.

There is no doubt that SAFTA would prove an revolutionary contribution to the establishment of prosperous South Asia, dream of SAARC founding members.  The SAARC countries are hopeful that its upcoming 18th Summit going to be held in Nepal on November 26-27 will stimulate the implementation of SAFTA.

(By Sharachchandra Bhandary)

Source:RSS

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