XIth SAARC Summit
SAARC Summit to give boost to SAFTA

Kathmandu, Dec. 23 (RSS):The eleventh summit meeting of the South Asian Association for Regional Cooperation (SAARC) taking place from January 4-6, 2002 in Kathmandu is believed to be instrumental in further consolidating and bringing to fruition the concept of South Asian Free Trade (SAFTA).

The need to help SAFTA materialise in the regison by 2001 had been felt during the ninth SAARC summit that was held from May 12-14, 1997 in Male, the capital of the Maldives.

The South Asian Preferential Trading Arrangement (SAPTA) had been instituted in April, 1993. The draft of SAPTA, in the form of the regional agreement of SAARC, had been prepared by the inter-governmental group on trade liberalisation constituted during the Sixth SAARC Summit held on December 21, 1991 in Colombo, the capital of Sri Lanka.

Nepal is the first SAARC member country to ratify the agreement which came into force from December 7, 1995 after approval by all the SAARC member countries while Bangladesh is the last to ratify the agreement. Nepal had ratified the treaty on September 28, 1993.

The main objective of SAPTA is to simplify trade and economic activities at the regional level and to make them more accessible.

South Asian Preferential Trading Arrangement (SAPTA) is the initial step conceived for achieving the goal of SAFTA by gradually moving towards the realisation of SAARC customs union, common market and economic union.

There is a provision for four types of trading facilities under SAPTA which include reduction of customs tariff, proportional reduction of customs on all goods, expansion of customs and other necessary trade on the basis of various sector-wise division and trading preference by different means likely to promote mutual cooperation and conducting direct trade between the member countries.

So far the proposal for customs reduction has been approved for 226 different items as per the initiatives taken towards customs reduction in pursuant to the provision of preferential trade under SAPTA.

The fourteen items in which Nepal has given its consent for customs concession include gypsum, coal, medicines, natural rubber, leather goods, wooden furniture, dry fruits, fresh fruits, paper, cloves, nutmeg, black pepper, canned fish and chewing gum.

The Colombo summit in 1991 had given directives to prepare and give the final shape of the draft for the creation of a free trading area in the region by 2001.

The meeting of the SAARC Ministerial Council held in New Delhi in 1995 had decided to make efforts to give concrete shape to SAPTA and as a result of this an inter-governmental experts’ group was constituted in 1996.

The first meeting of the group held in Kathmandu in 1999 had prepared a draft treaty for free trade in the region.

The draft treaty has made provisions for fixing the time for the free trade, undertaking of trade reforms and compensating the revenue loss for providing trade security to least developed countries.

Nepal, Bangladesh, Bhutan and the Maldives have been considered as the least developed countries by SAARC.

It is expected that if SAPTA is realised during the Eleventh SAARC Summit, it will assist in bridging the growing trade imbalance in the region and reducing poverty which remains the major challenge for the region.

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