SAARC:

Preferential Trading Agreement

Presented By:
Mohsin Khan MBA 2nd Sem Section A Roll No. 29

A Preview To SAARC
Established on December 8, 1985 Formally adopted its charter providing economical & social progress Cultural development in south Asia region Meetings are held annually For foreign secretaries its twice per annum Headquartered in in Kathmandu, Nepal

Objectives @ a glance
Welfare and improving Quality of Life to South Asia people Accelerate economic growth, social progress cultural development Providing opportunity to live in dignity and realize full potential Promote and strengthen self reliance among South Asia Contribute towards natural trust, understanding and appreciation Adapt collaboration and mutual assistance in economic, social, cultural, technical and scientific field Improve co-operation with developing countries Allow co-operation through international forums Maintain peace in the region

The Hook: Preferential Trading agreement

Negotiated in 1993 by seven developing countries All seven members of SAARC

Objectives:
Promote and sustain mutual trade Develop economic co-operation among developing countries

On grounds of Principles
Mutuality and benefits in accordance with the economy and industrial level Development in focus with external trade and tariff policies Negotiate tariff reforms step by step Analyzing concrete preferential measures Contribution of incremental trend in product coverage Deepening of tariff concessions over previous rounds Four rounds of trade negotiations concluded under SAPTA covering over 5000 commodities

Some of the Rules of Origin

Finding origin of products eligible for Preferential concessions under SAPTA Following products
Products wholly obtained in India Materials in originating countries For 2(b) value of non originating materials means of the cif value cant be ascertained Used articles can only be recycled

When determining origin, packing forms also considered

Main Components
Tariff Para Tariff Non Tariff Direct Trade Measures

Maintenance of SAPTA concession

W.e.f 1st Jan, 2006 Trade Liberalization Program for LDC members Sensitive lists for concessions products Listed items enjoys SAPTA concessions Agreement upon minimal rate Irrespective of whether products are in lists or not, in case of SAFTA, TLP completion required

SAPTA to SAFTA: The Transformation

Regionlism was raised Economic integration in trade and intra regional trade Giving birth to efficiency in market and bring benefits Preferably it went down to appreciate the free trade agreement and became to SAFTA Enhancing capacity of region Product arrangements and special assumption undertaken

SAFTA @ Now
In 1993 it was established SAFTA agreement reached on 6th Jan, 2004 12th SAARC summit held in Islamabad, Pakistan Seven foreign ministries signed framework agreement on SAFTA SAFTA requires developing countries to bring their duties down to 20% in 1st phase By 2016, reduced tariff to zero

The Purpose
Encourage and elevate common contract among countries Contracts involving trade operated by states, supply and import assurance in respect of specific products Involves agreement on tariff concession like national duties concessions and non tariff concession

Objectives
Promote good competition in FTA Provide equitable benefits to all countries Bringing transparency and integrity among nations Increase level of trade and economic integration Reducing tariff and barriers Special preferences to LDCs among SAARC nations

Instruments
Trade Liberalization Program Rules of Origin Institutional Agreements Consultation and Disputes Settlement Procedures Safeguard Measures Any other instrument that may be agreed upon

Bibliography
www.nirvana.org www.saarc-sec.org www.mapsofworld.com www.southasiafoundation.com www.sdc.gov.in www.saarctrade.info