This is not to imply that the Association had decided to leave out economic cooperation.
In fact, in 1986, the first ministerial meeting on international economic issues was held in
Islamabad (31 March- 31 April). The Declaration of this ministerial meeting stressed the need
for intensifying economic cooperation among SAARC countries and also agreed that SAARC countries
should coordinate their positions at the various headquarters of regional and international
organizations, as well as in relevant international conferences to further the common objectives
of member courtiers.
In 1987, the representatives of the national planning organisations met for the second time
in Islamabad (11-14 October) and recommended that in view of the adverse international economic
situation facing the region, there was a need to pool resources for long term regional cooperation.
Recognising asymmetries at the development levels and the fact that the share of SAARC in world
trade was relatively small, the meeting recommended that analytical studies need to be carried
out in the first instance to facilitate identification of priority areas for economic cooperation.
As a result a study on trade, manufactures and services (TMS) in the South Asian region. Meanwhile,
the national planning organisations continued to meet and agreed on a series of initiatives which
would intensify the consultative process particularly in basic needs programs and poverty alleviation.
The trade, manufactures and services study, which was completed in 1991, considered economic cooperation
among the countries of the SAARC region as an inevitable imperative for promoting all round development of
the region. In May 1991, the council of ministers at their ninth session at Male endorsed the study
and established a high level committee known as the Committee on Economic cooperation (CEC)
comprising commerce/ trade secretaries of the SAARC member states.
The CEC was mandated to formulate and oversee implementation of specific measures, policies
and programs within the SAARC field of trade and economic relations. With the creationof the
CEC, date, the CEC has held ten meetings.
Over the years, the CEC has emerged as one of the most important groups within the SARRC
having a mandate over economic and trade issues. The CEC has provided recommendations and
guidance in identifying new areas for cooperation on economic and trade related matters as well
as considering reports of constituted groups. In fact, the mandate of the CEC includes monitoring
cooperation in areas such as standards and measurement, customs and the harmonization of procedures,
preferential trading arrangement, rules of origin, agreements for the promotion and protection of
investments within the SAARC region as also for the avoidance of double taxation, setting up of a
SAARC Arbitration Council, sharing information on economic and trade related matters, taking note
of special circumstances of least developed countries within the region, and formulation of joint
strategies to be adopted in multilateral negotiating for a. The recommendations of the CEC are
submitted to the Standing Committee of Foreign Secretaries and through it to higher bodies,
namely the council of ministers and the summit.
In December 1991, the sixth summit held in Colombo approved the establishment of an
Inter-Governmental Group(IGG) to formulate Arrangement an agreement to establish a SAARC
Preferential Trading Arrangement (SAPTA) by 1997. Given the consensus within SAARC, the
frame work agreement on SAPTA was finalized in 1993, and formally came into operation in
December 1995, well in advance of the date stipulated by the Colombo summit. The agreement
reflected the desire of the SAARC countries to promote and sustain mutual trade and economic
cooperation within the SAARC region through exchange of concessions.
As recommended by the IGG, the Consolidated National Schedules of Concessions agreed to by
the SAARC member states during the first, second and third rounds of trade negotiations under
SAPTA have been merged by the SAARC Secretariat.
The tenth summit (Colombo 1998) decide that in order to accelerate progress in the next
round of SAPTA negotiations, deeper actively traded, or are likely to be traded, among members;
that discriminatory practices and non-tariff barriers should be simultaneously removed on
items in respect of which tariff concessions are granted or have been granted earlier. Measures
to remove structural impediments should also be taken in order to move speedily towards the goal
of a South Asian Free Trade Area (SAFTA). The summit also direction that the domestic content
requirements under SAPTA Rules of Origin be reduced. The summit affirmed that benefits of the
process be equitably shard by all member states.
One of the core principles of the SAPTA Agreement is that there should be special treatment
for least developed countries through the consideration of additional measures. It was accordingly
decided in 1999 to reduce the domestic content requirement further under the SAPTA Rules of Origin
to enable the smaller and least developed countries to benefit equitably from economic liberalization.
This reduction would apply to all products covered so far in the trade negotiations.
SAPTA was envisaged primarily as the first step towards the transition to a South Asian
Free Trade Area (SAFTA) leading subsequently, towards a Customs Union, Common Market and
Economic Union. In 1995, the sixteenth session of the council of ministers held in New Delhi
(December 18-19) agreed on the need to strive for the realization of SAFTA and to this end
an Inter-Government Expert Group (IGEG) was set up in 1996 to identify the necessary steps
towards moving into a free trade area.
Recognising the need to address asymmetries in development and other complexities that may
stand in the way of such a tight schedule, the Colombo Summit directed that the text of the
regulatory framework for creating a free trade area in the region should be finalized by 2001.
In this connection, a committee of experts on drafting a Comprehensive Treaty Regime on a South
Asian Free Trade Area (SAFTA) has been constituted to draft a comprehensive treaty which has,
following its first meeting in Kathmandu (July 1999) worked out its broad terms of reference.
Eventually, the treaty would incorporate, inter alia, binding time frames for freeing trade,
measures to facilitate trade, protection of LDCs including mechanisms for compensation of revenue
loss, etc. With the setting up of the committee of experts, the IGEG was wound up. At its first
meeting, the committee directed the Secretariat to prepare the first working draft of the SAFTA
Treaty. This working draft is currently under consideration of the member states.
The eleventh SAARC summit held in Kathmandu on January 4-6, 2002 provided further impetus to
the regional economic cooperation. To give effect to the shared aspirations for a more prosperous
South Asia, the leaders agreed to the vision of a phased and planned process eventually leading to
a South Asian Economic Union and agreed to accelerate cooperation in the core areas of trade,
finance and investment to realize the goal of an integrated South Asian economy in a step by step
manner. They expressed their determination to make full use of regional synergy to maximize the
benefits of globalization and liberalization and to minimize their negative impacts on the region.
While recognizing that trade and economic expansion is closely inter linked, the Leaders
made a commitment to widen and deepen the scope of regional networks of activities in trade
and financial matters.
Recognizing the need to move quickly towards a South Asian Free Trade Area, the heads of
state and government directed the council of ministers to finalize the text of the Draft
Treaty Framework by the end of 2002. They also directed that in moving towards the goal of SAFTA,
the member states expedite action to remove tariff and non- tariff barriers and structural impediments to free trade.
They also instructed to conclude the meeting of the Inter-Governmental Group on trade liberalization for the fourth
round of trade negotiations under SAPTA as early as possible as per the decision of the tenth SAARC summit in Colombo.
SAARC has also initiated action on a series of practical measures to facilitate the process of economic integration. A
Group on Customs Cooperation was set up in 1996 and so far, has held three meetings. It was inter-alia decided
to harmonise HS lines and customs rules and regulations; simplify procedures for intra-regional exports; upgrade
infrastructural facilities and provide training facilities. A Customs Action Plan was drawn up in Islamabad
(April 1997) as agreed to by prepare a detailed report recommending various measures to be taken on the
simplifications and standardization of customs documents and declarations (for imports and exports);
preparation of a commodity description code expanding the 6-digit HS code to accommodate description of
goods in vogue within the SAARC region; harmonization of baggage laws, procedures and exemption limits
on gifts and postal goods; harmonization of matters relating to temporary import of vehicles and other
goods imported and subsequently re-exported in the same state, etc.
The need to improve the transport infrastructure and transit facilitities in the region was
recognized and the 11 Session of the SAARC Council of Ministers in Colombo (July 8-9, 1992)
directed the CEC to take appropriate steps in this regard. Accordingly a study was commissioned
to assess the existing transport infrastructure and transit facilities, including procedural
and documental issues in the region in relation to volume and composition of the existing trade
in the region and to make recommendations for their improvement, with a view to enhancing trade
within and outside the SAARC region. The study was completed in 1994 and has made
far-reaching recommendations.
Adraft Regional Agreement on Promotion and Protection of Investment within the
SAARC region is under consideration of the member states and is meant to create conditions
favourable for promotion and protecting investments in member states by investors from other
member states of the region. The objective is to finalise the Regional Investment
(Promotion and Protection) Agreement prior to the commencement of the implementation of SAFTA.
To review the progress in the implementation of its earlier recommendations, the Standing Group on
Standards. Quality Control and Measurement met for the second time in New Delhi on February 4-6, 2002.
The meeting considered a proposal for a collaborative arrangement with the German national metrology
institute Physikalisch-Technische Bundesansntalt (PTB) and held discussions subjects related to mutual
recognition, conformity assessment and accreditation to setting up of a core group on the subject of
Sanitary and Phytosanitary Standards and concerted attempts on capacity building and human resource
development. It was also agree that India would bring out a series of short films to increase consumer
to meet at least once every year.
In the area of trade and tariff which are critical to individual member states and to the region
as a whole, particularly those relating to multilateral negotiations in World Trade Organisation (WTO),
World Customs Organisation (WCO), World Intellectual Property Organisation (WIPO), etc., regular
consultations are held not only at the headquarters of such international organisations, ,
such as Geneva, but also in the member states themselves, so as to effectively coordinate,
project and protect their collective interest. This process of consultations has been intensified
so that wherever possible, a regional position may be taken which is compatible with the overall
principles of SAARC, and which reflects the needs and requirements of the LDCs in the region through
the provision of special and more favourable concession.
SAARC commerce ministers issued a declaration on the eve of the Second WTO Ministerial conference
(Geneva 1998). A meeting of SAARC commerce ministers was also held in Male in August 1999 with
regard to the Third WTO. Ministerial conference held in Seattle (November 30-December 2, 1999)
and the SAARC commerce ministers issued a preliminary joint statement on the issues considered
at that meeting. Positions were also coordinated and a joint statement was issued by the SAARC
commerce ministers (New Delhi, August 23, 2001) for the Fourth WTO Ministerial conference held at
Doha, Qatar on November 9-13, 2001.
The important role played by the chambers of commerce and industry in the region has been
given special emphasis. The SAARC Chamber of Commerce and Industry (SCCI) was set up in 1992
as the first recgnised regional apex body. SCCI brings together under one umbrella the national
chambers of commerce and industry of the member states and is actively engaged in the promotion
of trade and the interaction of the business community within the SAARC region. SCCI has been involved
not only in increasing public awareness through workshops and studies they have been commissioning,
including the publication of books and other material, but also through the interactive sessions
between government and industry aimed at providing pertinent input to the process of regional economic
cooperation. The SCCI also holds regular consultations with the SAARC Secretariat. The SCCI recently
brought out a book titled SAARC Means Business: Opportunities for Partnership which highlights sectors
of cooperative advantage within the region.
The organizing of SAARC trade fairs ahs become a regular feature since 1996 when the first trade fair
was held in India. The Second SAARC Trade Fair was held in Colombo 1998. Pakistan hosted the Third SAARC
Trade Fair in Karachi on September 1-6, 2001. The Fourth SAARC Trade Fair was hosted by Nepal in 2002.
The trade fairs have succeeded not only in projecting the potential of the region but also in promoting
the wide variety of products the region produces which match international quality and standards.
It was also agreed at the Colombo summit in 1998 to establish a SAARC Network of Researchers on Global
Financial and Economic planning ministries, research institutes ad eminent economists nominated by governments
to identify, analyse and help SAARC face up to current global, financial and economic developments affecting
the region. Such a network has since been set up and has decided on an immediate and longer-term research
agenda which would help identify areas of common concern, as also new areas of cooperation among the member
countries. The network also brings out a South Asia Economic journal and is in the process of bringing out
a Directory of Research Institutes in South Asia focusing on global financial and economic issues.
A Memorandum of Understanding on Administrative cooperation between SAARC and the European commission
has been entered into (July 1996). The secretary-general was authorized by the 26 session of the council
of ministers in Nuwara Eliya, (March 19-19, 1999) to discuss with EC, specific areas of possible cooperation
under the MoU. Agreement has been reached on four programs as follows:
- facilitating access into the Single European market;
- implementation of the EU-GSP Scheme including cumulative rules of origin;
- drawing on the EU experience for the SAFTA process; and
- evolving common SAARC standards and harmonisation with international obligations including certification, testing, etc.
Among the various areas of cooperation within SAARC, economic cooperation appears to have gained
considerable momentum. This is derived to some measures from the changing global economic environment
and its apparent unpredictability.
Recalling the recommendations of the Third United Nations Conference on the Least Developed Countries
held in Brussels in May 2001 and the decisions of the Zanzibar Declaration of July 2001, the SAARC leaders
at their 11 SAARC summit urged the developed countries to adopt more liberal trade and aid policies responsive
to the particular needs of the least developed countries. Referring to the forthcoming International Conference
on Financing for Development to be held in Mexico in March 2002, the leaders urged the international community
to strengthen cooperation for development in the developing and the least developed countries in a holistic manner.
Whereas the latest developments made by this valuable regional organizations are concerned, the Islamabad
Declaration January 2004, has got great importance. This seven page declaration calls for promoting peace,
stability amity and progress in the region through strict and adherence to the principles of limit Nations
charter and non. Argument particularly respect for the principles of sovereign equality, territorial integrity,
national independence, non use of force and non. Interference in the internal affairs of the states and peaceful
settlement of all disputes.
It also reconfirmed the commitment made a the 4 SAARC summit for the creation of a South Asia Economic Union.
In this summit, Dhaka Bangladesh was selected for the next summit of SAARC which is scheduled to be held in January 2005.
In July 2004, the stress was laid down on SAARC energy tie-up.
According to this 30 session of the SAARC standing committee comprising foreign secretaries of seven
member states opened in Islamabad, advocating project-approach and greater cooperation in the energy sector.
The concept of South Asia energy ring was approved by the 12 SAARC summit in Islamabad in January 2004,
and subsequently a study in creating a South Asian Energy cooperation was conducted by a working group on energy.
On 21 of July 2004, a two day meeting of the SAARC took place in Islamabad in which “SAARC ACCORD SINGED”.
Boost all round collaboration. This meeting ended with specific proposals for collaborative projects promising
benefits to the peoples of for collaborative projects promising benefits to the peoples of the region. SAARC
secretary General Q.A.M. A Rahim was present on the occasion foreign Minister of Pakistan Forced on the follow up:
- That the decesiris taken by the council that included strengthening of cooperation’s in the areas
of telecommunications and Information technology.
- Approval of the plan of action recommended by the working group on energy and authorization of
a meeting of SAARC energy ministers to consider recommendations of the group and establishment of a
SAARC forestry centre in Blutan.
- The council also decided to take immediate steps for the implementation SAARC programr with the
assistance of international development institution, to expedite the process of rseeking th UN observer
status for SAARC, to enhance inter regional cooperation and to encourage collaboration with other
regional organisations the UN agencies.
- It resolved that it would look into modalities for establishing leacogue partnership with other
regional bodies and states outside the region taken into account the experience of other regional
bodies and states outside the region taken into account the experience of other require organizations like
ASEAN. Specific proposals on economic integration, poverty alleviation structure development, and
parliamentary exchanges were referred to relevant require and national mechanion and institutions for consideration.
- The council asked the SAARC Aution 0-us-Advisory group of Prominent women personalities to focus on
women and right to equal opportunities in social, economic and political spheres.
- The SAARC Secretariat has been directed to complete the regional Poverty People (RPP) 2004.
- The Independent South Asian commission on Poverty Alleviation (ISACPA) had been asked to expedite
preparation of South Asian Development Goals for the next five years in the areas of poverty alleviation
education, health and environment.
- The UNDP had agreed to support their exercise.
- The comment approved the appointment of new secretary general ambassador Lyonpo Doryo of Bhutan,
whose terms would start from January 2005.
So, it can be conceived in this way that since its incorporation, it has played a vital role for
the development of this region and it was the need of the hour to establish such kind of organization
in the region in order to expand cooperation among the countries of this region for making improvement economic,
agricultural, political and scientific aspects.