What Is South Asian Free Trade Agreement

The South Asian Free Trade Agreement, commonly known as SAFTA, is an agreement between the member countries of the South Asian Association for Regional Cooperation (SAARC) to promote free trade and economic cooperation in the region. The agreement was signed in January 2004 and came into effect in July of the same year.

The participating countries in SAFTA include Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka. The primary objective of SAFTA is to remove barriers to trade among its member countries, which includes the elimination of tariffs, quotas, and non-tariff barriers on traded goods.

SAFTA is viewed as a significant step towards strengthening economic integration and cooperation among the South Asian countries. The agreement is expected to create new opportunities for businesses and entrepreneurs, lead to increased trade, and ultimately lead to sustainable economic growth across the region.

Under SAFTA, the member countries have committed to lowering tariffs on traded goods within their respective territories. This includes reducing the maximum import duty on any product to 5% by 2016. The agreement also aims to establish a framework for cooperation in key areas such as customs, trade facilitation, investment, and intellectual property rights.

One of the challenges faced by SAFTA has been the slow pace of implementation, with several member countries struggling to meet the agreed-upon commitments. However, efforts are being made to address these issues, including the establishment of a SAFTA Ministerial Council and the creation of a Dispute Settlement Mechanism to resolve any trade disputes that may arise among member countries.

In summary, SAFTA is a free trade agreement between the member countries of SAARC aimed at promoting economic cooperation and integration in the region. Although there have been challenges in its implementation, the agreement is viewed as a significant step towards sustainable economic growth and increased trade among the participating countries.