Government Level Cooperation among SAARC countries

TRADE AND ECONOMIC COOPERATION

SAARC has taken important steps to expand cooperation among member countries in the core economic areas. In 1991, a Regional Study on Trade, Manufactures and Services (TMS) was completed outlining a number of recommendations for promoting regional cooperation in the core economic areas. The Council of Ministers at its Ninth Session in Malé in July 1991 endorsed the Study and decided to set up a high-level Committee on Economic Cooperation (CEC). This Committee has so far held six meetings.

At the Colombo Summit in December 1991, the Heads of State or Government approved the establishment of an InterGovernmental Group (IGG) to seek agreement on an institutional framework under which specific measures for trade liberalization among SAARC member states could be furthered. IGG evolved a draft Agreement on SAARC Preferential Trading Arrangement (SAPTA) during its first two Meetings. Subsequently, the Council of Ministers, upon the recommendation of CEC signed the framework Agreement on SAPTA in Dhaka on 11 April 1993 during the Seventh SAARC Summit.

In the subsequent four Meetings of IGG, the member states conducted their bilateral/multilateral trade negotiations in which they exchanged concessions to be offered/sought. The Consolidated National Schedules of Concessions were finalised in the Sixth Meeting of the IGG held at the SAARC Secretariat, Kathmandu on 20-21 April 1995 and subsequently approved by the Council of Ministers in May 1995. All SAARC member countries have ratified the SAPTA Agreement and as per Article 22 of the Agreement, SAPTA will enter into force on 7th December 1995 - two years ahead of the time schedule envisaged initially.

The Council of Ministers at its Fifteenth Session agreed that the full and timely realisation of the benefits of regional economic cooperation required

(a) the implementation of other related measures such as the removal of para-tariff, non-tariff and other trade control barriers within the specific timeframes and
(b) eventual progression to the creation of a free-trade area in the region.

The Heads of State or Government at their Eighth SAARC Summit (New Delhi, May 1995) noted with satisfaction that the first round of trade negotiations under SAPTA has been completed. They reiterated their firm belief that the operationalisation of SAPTA will herald the beginning of a new and significant process of regional cooperation and would lend strength to SAARC as an institution for promoting the welfare of the peoples of South Asia.

CEC at its Sixth Meeting (New Delhi, November 1995) recommended that with the operationalisation of SAARC Preferential Trading Arrangement (SAPTA), it is now desirable to work towards removal of para-tariff and non-tariff barriers, widening and deepening the tariff cuts and expanding the list of products to be included for intra-SAARC preferential trade under SAPTA. It reiterated that the South Asian Free Trade Area (SAFTA) is a clear eventual goal, at the same time it noted that the progress towards it may have to be in gradual stages. To push the SAPTA process forward, it recommended that the Inter-Governmental Group on Trade Liberalisation be reconvened to conduct the Second Round of Trade Negotiations under SAPTA and proposed that the first meeting of the second round may take place in early 1996 and appreciated the offer of Sri Lanka to host the same. The Committee also recommended that the first Meeting of the Committee of Participants of SAPTA may be held in the third quarter of 1996 to review the progress in the implementation of the Agreement.

Each member country will notify the SAARC Secretariat and the SAARC Chamber of Commerce and Industry about their overseas bulk purchases. A Group of Experts from Research Institutions of Member States have been requested to commission a tripartite study involving governments, business and academic sectors to accelerate the process of eventual progression to the creation of a free-trade area in the region.

The following initiatives have also been taken towards promoting trade cooperation within the region:

i. Cooperation in the field of Handicrafts and Cottage Industries

A Group of Experts on Joint Ventures in Handicrafts and Cottage Industries was established in 1991 pursuant to the decision of the Fifth SAARC Summit (Malé, 1990). So far, the Group has held two meetings in which it has identified an indicative list of crafts and industries for the purpose of mutual cooperation. Out of this list, the Group has selected six sectors namely: hand knotted carpets, beekeeping and honey production, handloom textile products (including embroidery), leather products (including leather garments), wooden handicrafts and pottery and ceramic products as priority areas. It has made several recommendations regarding development of marketing and export promotion, design development, procurement and supply of certain raw material, skill upgradation and transfer of technology, entrepreneurship development. The implementation of these recommendations is reviewed regularly by the Committee on Economic Cooperation (CEC). At its Sixth Meeting in New Delhi in November 1995, CEC urged member states to take all necessary steps for the speedy implementation of these recommendations. The Committee requested the Secretariat to coordinate organisation of other agreed activities through consultations with member states as appropriate.

ii. Study on Transport Infrastructure and Transit Facilities

The CEC was directed by the Council of Ministers at its Eleventh Session (Colombo, July 1992) to specify appropriate steps for further improvement of transport infrastructure and transit facilities in the region to accelerate the growth of trade within and outside the region. Subsequent to this, a consultancy report was prepared on the subject by the Institute for Sustainable Development, Kathmandu. The Report was considered by the CEC at its Sixth Meeting in New Delhi in November 1995. The CEC requested the member states to complete their examination of the Report urgently.

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