What Is Safta Agreement

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The aim of SAFTA is to promote and increase common contracts between countries, such as medium- and long-term contracts. State-managed trade contracts, the supply and import insurance of certain products, etc. This is an agreement on tariff concessions such as domestic tariff concessions and non-tariff concessions The South Asian Free Trade Area (SAFTA) is an agreement reached on 6 January 2004 at the 12th OSCE Summit in Islamabad, Pakistan. It has created a free trade area of 1.6 billion people in Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka to reduce tariffs on all goods traded by 2016. The SAFTA agreement entered into force on 1 January 2006[1] and is operational after the ratification of the agreement by the seven governments. SAFTA called on developing countries in South Asia (India, Pakistan and Sri Lanka) to reduce their tariffs to 20% during the first phase of the two-year period, until 2007. During the last five-year period, which ended in 2012, the 20% fee was reduced to zero in a series of annual reductions. The least developed countries of South Asia (Nepal, Bhutan, Bangladesh, Afghanistan and the Maldives) had an additional three years to reduce tariffs to zero. India and Pakistan ratified the treaty in 2009, while Afghanistan, SAARC`s eighth member state, ratified the SAFTA protocol on 4 May 2011. [2] The South Asian Free Trade Area (SAFTA) is the free trade agreement of the South Asian Association for Regional Cooperation (SAARC). The agreement entered into force in 2006 and came into force with the 1993 ASAC preferential trade agreement. SAFTA`s signatory countries are Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka.

The creation of an intergovernmental group (IGG) to develop an agreement to establish a ZATA until 1997 was approved at the sixth ASAC Summit in Colombo in December 1991. The South Asian Free Trade Area (SAFTA) agreement has been in force since 2006 – with little success. This is in stark contrast to the ASEAN Free Trade Area (AFTA), which began in 1992 with six countries and then added other members and closed the ASEAN Ten until 1999. Between 1992 and 2017, intra-regional imports as a share of world imports to ASEAN rose from 17% to 24% and exports from 21% to 27%. In South Asia, since SAFTA came into force, these shares have stagnated with 3% for intra-regional exports and 6 to 7% for intra-regional exports. Indeed, intra-regional trade in South Asia has for some time been the lowest among the regions of the world and accounts for about 5% of its total trade with the world. The main objective of the agreement is to promote competition in the region and to offer equitable benefits to the countries concerned. It must benefit the citizens of countries by bringing transparency and integrity between nations.

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