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In order to reduce the customs duties for all the member countries to zero level, this specific zone has been created. This trading operation is mainly done for strengthening the economic cooperation of the “intra SAARC countries” for developing extra social and economic potential. The main primary objective of the SAFTA is to enhance the benefits to the small economically developed countries like the Maldives, Bangladesh, and Bhutan”. There are basically eight counties that have been involved in this kind of free trade agreement. It has been observed that most of the secretariat is based in “Kathmandu, Nepal”.
“International relations”
This group has been formed in order to promote mutual trade along with enhancing economic cooperation by eliminating all the barriers in international trade relations. This process also promotes the conditions of free trade relations through enhancing fair trade practices. This agreement also ensures that there will be equal benefits of opportunities for establishing the framework for further regional corporations for establishing the mutual benefits between the signed countries. One of the main objectives of this agreement is to decrease the custom duties to zero so that it helps in trade-related affairs.
“SAFTA countries”
There are almost eight countries that have been registered under this agreement. The enlisted countries are: “Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, Sri Lanka“. The main headquarter of this area has been situated in Kathmandu, Nepal. The scheduled meeting has been organised by the head of the state countries in an annual manner whereas the meeting regarding the foreign secretariat has been organised twice a year.
“SAFTA meaning”
The word “SAFTA” stands for “South Asian Free Trade Area”. This agreement was taken in 2004 at the summit of the 12th SAARC convention that was held in Islamabad, Pakistan. It has also been proposed that the tariff of the least economically developed countries be reduced to zero level for a further period of three years. However, the agreement came into force in 2006. However, the level of the custom duties has been reduced to the zero level by decreasing the overall account substantially to the zero levels. Negotiation of the tariff has been done at the step-by-step level for extending the successive stages through periodic reviews.
“South Asian Free Trade Area”
It is basically termed as creating the free trade area for enhancing the relationship between the signed member countries for reducing the matter of the custom duties.
Analysing the important terms regarding SAFTA
Factors | Description |
Objective | The main objective lies in order to enhance the economic cooperation for all the member countries by reducing the level of customs duties to zero level |
Trade liberalisation program | According to this program, all the member countries have to follow the tariff reduction schedule of the contrasting countries. Thus, there must be a reduction of “20% in tariff by the non-least developed countries and 30% reduction in the least developed countries” |
Basic principles | The discussion of the basic principles like in the matter of inclusion of all the commodities along with the manufacturer’s products in several forms like processed forms, semi-processed forms as well as the raw forms. Non-negotiation tariffs have been extended and improved step-by-step. It is reviewed on a periodic basis. |
Conclusion
“SAFTA” has been considered as one of the most significant trade agreements between the associated member countries in order to enhance the relationship between the countries for enhancing the matter of cooperation for trade-related matters. The overall process also eliminates the associated barriers to all the trade-related processes for enhancing the movement of the cross borders. The overall geographical area is almost (5099611 km^2). There are several limitations that have been described in the previous sections. This agreement also comprises some of the misuses in the overall affairs. The description of the order to rules has been enhanced to maintain the economic stability of all the enlisted member countries in the associated trade policies by analysing the basic principles regarding it.
