NOTE BY THE SAARC SECRETARIAT ON
CURRENT STATUS OF
ON ECONOMIC AND FINANCIAL COOPERATION
(as on 22 January 2015)
The SAARC Leaders have been emphasising the importance of enhancing financial and economic cooperation for regional integration. Several mechanisms under trade and economic cooperation have been established to push the process of moving from South Asian Free Trade Area (SAFTA) to South Asian Economic Union (SAEU).
1. The Seventeenth SAARC Summit (Addu, Maldives, 10-11 November 2011), directed the SAARC Finance Ministers to chart a proposal that would allow for greater flow of financial capital and intra-regional long-term investment. The Summit also directed the SAFTA Ministerial Council to intensify efforts to fully and effectively implement SAFTA and the work on reduction in Sensitive Lists as well as early resolution of non-tariff barriers and expediting the process of harmonizing standards and customs procedures. Significant progress has been achieved in areas such as SAFTA, SAARC Agreement on Trade in Services (SATIS), trade facilitation measures, harmonization of customs procedures and standards, elimination of non-tariff and para-tariff barriers to trade, increasing cooperation in the field of finance and planned pursuit of SAEU. The Regional Economic Integration Study (Phase-II) has been completed with the assistance of Asian Development Bank (ADB) and was released during the Thirty-sixth Session of Council of Ministers.
2. At their Eighteenth SAARC Summit held in Kathmandu on 26-27 November 2014), the Heads of State or Government expressed their strong determination to deepen regional integration for peace, stability and prosperity in South Asia by intensifying cooperation, inter alia, in trade, investment, finance, energy, security, infrastructure, connectivity and culture; and implementing projects, programmes and activities in a prioritized, result-oriented and time-bound manner. The Leaders renewed their commitment to achieve South Asian Economic Union (SAEU) in a phased and planned manner through a Free Trade Area, a Customs Union, a Common Market, and a Common Economic and Monetary Union. They acknowledged that SAARC Member States, particularly the Least Developed and Landlocked Member States, face structural constraints and challenges that result in their weak productive capacity affecting their competitiveness in external trade due to, among others, high trade and transit cost. They committed to enhance support to the Least Developed and Landlocked Member States in their development efforts, with a view to ensuring equitable benefits of free trade arrangements. In this context, they agreed to effectively implement the existing preferential facilities under SAFTA and SATIS.
3. The Eighteenth SAARC Summit directed SAFTA Ministerial Council and SAFTA Committee of Experts to accelerate free trade in goods and services in the region putting into operation simplified and transparent rules of origin; implementation of trade facilitation measures; harmonization of standards relating to Technical Barriers to Trade (TBT) and sanitary and phyto-sanitary measures; harmonized, streamlined and simplified customs procedures; elimination of non-tariff and para-tariff barriers; and smooth and efficient transit and transport facilities. They also called for early operationalization of SATIS by finalizing the schedule of commitments.
Please see the attached file for complete note......