NOTE BY THE SAARC SECRETARIAT ON

CURRENT STATUS OF
ECONOMIC AND FINANCIAL COOPERATION
UNDER THE FRAMEWORK OF SAARC

As on 16 September 2014

At the Seventeenth SAARC Summit held in Addu, Maldives on 10-11 November

2011, the Leaders 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
Seventeenth SAARC 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 made in the
areas such as South Asian Free Trade Area (SAFTA), SAARC Agreement on Trade in
Services, trade facilitation measures harmonization of customs procedures, harmonization of
standards, elimination of non-tariff and para-tariff barriers to trade, increasing cooperation in
the field of finance and planned pursuit of South Asian Economic Union (SAEU). 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 SAFTA to South
Asian Economic Union.

Committee on Economic Cooperation

2. The Fifteenth Meeting of the Committee on Economic Cooperation (CEC) was held
in the Maldives on 15-16 July 2012. The CEC comprising Trade/Commerce Secretaries of
SAARC Member States was established to oversee and monitor the trade and economic
cooperation under the framework of SAARC in 1991. The Fifteenth Meeting, inter-alia,
reviewed the progress in the implementation of decisions relating to Trade Liberalisation
Programme under South Asian Free Trade Area (SAFTA). It also deliberated on matters
relating to Least Developed Countries and SAARC Chamber of Commerce and Industry
(SCCI). A representative of SAARC Chamber of Commerce and Industry made a presentation
giving the perspective of the private sector for promotion of intra-SAARC trade and economic
cooperation. It also made recommendations for developing a road map for a long term vision of
regional economic integration in SAARC and for its movement towards South Asian Economic
Union.

2.1 Recognising delays in customs clearance procedures caused due to late transmission
of original copies of specimen signatures and seals of officials authorized to sign
SAPTA/SAFTA Certificates of Origin, the Committee on Economic Cooperation agreed to
accept electronic copies of such documents in order to save time and to ensure that the
consignments are not held up at the customs border points.

2.2 The Sixteenth Meeting of the Committee on Economic Cooperation will be hosted by
in Nepal in 2014.
Agreement on South Asian Free Trade Area (SAFTA)

3. The SAFTA Agreement, signed in 2004, entered into force on 1 January 2006, and
the Trade Liberalization Programme commenced from 1st July 2006.

3.1 The SAFTA Ministerial Council (SMC) has been established comprising Commerce
Ministers of the Member States. To assist the SMC, a SAFTA Committee of Experts (SCOE)
has been formed. The SCOE is expected to submit its report to SMC every six months. After
the Seventeenth SAARC Summit, two Meetings of SAFTA COE and two Meetings of SMC
have been held. The Seventh Meeting of the SAFTA COE and Sixth Meeting of SMC were
hosted by Pakistan in February 2012 whereas the Eighth Meeting of the SAFTA COE and
Seventh Meeting of SAFTA Ministerial Council were hosted by Sri Lanka in August 2013. A
Special Meeting of SAFTA Committee of Experts on Non-Tariff Measures and Para-Tariff
Measures was also held at the SAARC Secretariat, Kathmandu on 31 July – 1 August 2013 to
focus attention on identification and elimination of NTMs/PTMs. These issues are now being
examined by the Consultant conducting second phase Study on Regional Economic
Integration.

3.2 The information on value of exports under SAFTA since the launching of the Trade
Liberalisation Programme (TLP) is given below:-

Economic, Trade and Finance Division, SAARC Secretariat, Kathmandu

Exports under SAFTA (July 2006 to June 2013)
(as on 20 September 2013)
US Dollars
Period Afghanistan Bangladesh India Maldives Pakistan Sri Lanka Total
July 2006 - December 2006 0.00 0.00 0.00 14,001.15 55,324.00 0.00 69,325.15
January 2007 - June 2007 0.00 4,423,071.02 0.00 0.00 212,053.65 0.00 4,635,124.67
July 2007 - December 2007 0.00 10,850,106.82 3,783,410.31 0.00 364,111.34 19,828.02 15,017,456.49
January 2008 - June 2008 0.00 54,139,271.71 6,900,229.05 0.00 2,412,444.20 7,098.50 63,459,043.46
July 2008 - December 2008 0.00 44,177,691.45 2,084,191.63 0.00 29,384,274.31 33,690.72 75,679,848.11
January 2009 - June 2009 0.00 72,165,917.02 31,582,775.91 0.00 14,059,934.17 176,452.56 117,985,079.66
July 2009 - December 2009 0.00 127,620,537.70 283,673,960.43 0.00 29,450,050.73 432,171.40 441,176,720.26
January 2010 - June 2010 0.00 86,226,413.91 276,933,455.74 0.00 18,856,722.06 442,934.00 382,459,525.71
July 2010 - December 2010 0.00 150,485,087.33 92,737,597.06 0.00 37,262,285.53 74,632.00 280,559,601.92
January 2011- June 2011 14,770,442.10 172,182,455.94 175,773,868.15 0.00 19,451,567.80 74,609.00 382,252,942.99
July 2011 - December 2011 0.00 112,036,594.23 0.00 23,723,411.03 27,784.00 135,787,789.26
Jan 2012 - June 2012 56,287,131.46 257,998,074.73 342,980,545.04 147,348.00 657,413,099.23
July 2012 - December 2012 220,756,619.28 96,988.00 220,853,607.28
Jan 2013 - June 2013 142,930,849.58 0.00 1,021,106.26 143,951,955.84
Total 71,057,573.56 1,343,956,096.49 1,328,486,627.55 14,001.15 175,232,178.82 2,554,642.46 2,921,301,120.03

Note: No Exports under SAFTA from Bhutan and Nepal

3.3 The total cumulative exports under SAFTA since July 2006 have reached about US$
3 billion. Some figures from the Member States are still awaited. When these are received,
then this figure is bound to go higher. With a view to enhancing trade under SAFTA, the
SAFTA Committee of Experts has recommended that the tariff concessions and Rules of
Origin provisions under SAFTA need to be made more attractive than those provided for
under bilateral free trade agreements.

3.4 The Consultant conducting the second phase of the Study on Economic Integration
has also been requested to examine the reasons for trade under SAFTA being lower than
trade outside SAFTA and suggest ways and means for bringing trade taking place among the
Member States outside SAFTA within the ambit of SAFTA.

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3.5 The Draft Study on Economic Integration was presented by the Consultant at the
SAARC-ADB Workshop on Studies on Trade, Economics and Finance held at the SAARC
Secretariat, Kathmandu on 21-22 June 2012. The Final SAARC Study on Regional
Economic Integration was presented at the SAARC-ADB Inception Workshop for the
SAARC Study on Regional Economic Integration (Second Phase) and for the SAARC Study
on “Development of a Regional Coordinated Surveillance Mechanism” held at the SAARC
Secretariat, Kathmandu on 3-4 October 2013. The participants made chapter-wise
observations which will be taken into account by the Consultant while conducting the Second
Phase of the Study on Regional Economic Integration. The first draft of the Regional
Economic Integration Study (Second Phase) will be presented to one-day Workshop to be
held back-to-back with the Ninth Meeting of the SAFTA COE to be held in Bhutan.

3.6 The status of issuance of TLP Notification by the Member States as noted by the
Ninth Meeting of the SAFTA Committee of Experts (Thimphu, Bhutan, 22-23 July 2014) is
given below:

Member State Status of TLP Customs Notification

Afghanistan TLP commenced w.e.f. 7 August 2011
TLP Notification issued till the end of 2021
Bangladesh TLP Notification for 2013 and 2014 will be issued by 15 August
2014.
Bhutan Action taken till the end of TLP
(vide notification No. MOF/TIS/SAC/58 dated 29 June 2006)
India Customs Notifications No. 68/2012 dated 31 December 2012
concerning customs duty to be charged under SAFTA with effect
from 1 January 2013.
Maldives Notification containing SAFTA Customs Duty Rates for the year
2014 would be provided to the SAARC Secretariat by 30 August
2014.
Nepal TLP Notification issued for the financial year 2013-14
Pakistan TLP Notification issued till the end of 2013-2014.
(vide SRO 1073(I)/2013 dated 27 December 2013).
Sri Lanka National Imports Tariff Guide 2014 indicates SAFTA Rates for
2014.

3.7 India has already completed its TLP by reducing its tariff to 0% for LDCs under
SAFTA with effect from 1.1.2008, one year ahead of the schedule. The other Non-Least
Developed Countries i.e. Pakistan and Sri Lanka also completed their TLP for LDCs by
bringing their customs tariff down in the range of 0 to 5 % as per agreed schedule.

Removal of Non-Tariff and Para-tariff Barriers

4. The SAFTA Committee of Experts at its First Meeting set up a Sub-Group on Non-
Tariff Measures to address non-tariff barriers to intra-regional trade. Six meetings of the Sub-
Group were held. At its last meeting on 11-12 June 2011 in the Maldives, the Sub Group
completed its task of identification of Non-Tariff Measures/Para Tariff Measures
(NTMs/PTMs). It was agreed that the remaining task of categorisation of NTMs/PTMs and
their possible elimination and to see whether they are compatible with WTO or not would be
taken up by the regular Meetings of SAFTA Committee of Experts.

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4.1 As decided by the Sixth Meeting of the SAFTA Ministerial Council (Islamabad, 16
February 2012) a Special Meeting of the SAFTA Committee of Experts on NTMs/PTMs was
held at the SAARC Secretariat on 31 July – 1 August 2013 in order to go through the
Notification of each Member State and to see how those can be eliminated.

4.2 As mandated by the Seventh Meeting of the SAFTA Committee of Experts, the
SAARC Chamber of Commerce and Industry (SCCI) was invited to the Meeting to make a
presentation. Mr. Pradeep Kumar Shrestha, Vice President of SCCI from Nepal thanked the
Meeting for the opportunity provided to the private sector to share its views on barriers
affecting intra-SAARC trade. On behalf of SAARC Chamber of Commerce and Industry,
Mr. R.B. Rauniar, SCCI Executive Committee Member from Nepal made a detailed
presentation on “Non-Tariff Barriers in South Asia : The Challenges and Way Forward”.

4.3 The Special Meeting of the SAFTA Committee of Experts examined the
Notifications, Responses and Counter-Responses submitted by Bangladesh, India, Nepal,
Pakistan and Sri Lanka, and observed that the non-tariff measures and para-tariff measures
affecting their exports to other Member States fall into broad categories i.e. (a) Procedures;
(b) Variations in Standards; (c) Transit, transport and infrastructural difficulties; (d) Para-
tariff measures; and (e) Dispute Settlement Mechanism. In view of technical nature of the
work involved in categorizing the Non-Tariff Measures and Para-Tariff Measures in
appropriate categories as per internationally recognized norms, the Meeting recommended
that a Consultant may be appointed by the SAARC Secretariat to examine the notifications on
NTMs/PTMs submitted by Member States and to look into all relevant aspects and make
suggestions on how to address the trade barriers.

4.4 The Eighth Meeting of the SAFTA Committee of Experts (Colombo, 21-22 August
2013) considered the Report of the Special Meeting of the SAFTA COE on Non-Tariff
Measures (NTMs) and Para-Tariff Measures (PTMs). It agreed that a Consultant may be
appointed to examine the Notifications, Responses and Counter-Responses submitted by
Bangladesh, India, Nepal, Pakistan and Sri Lanka. The Consultant may categorise various
NTMs; identify whether they are compatible with WTO provisions or not; and make
suggestions for removing or reducing them for smooth flow of intra-SAARC trade flows
under SAFTA. The Eighth Meeting of the SAFTA COE also noted that under Article 7 (4)
of SAFTA Agreement, the Member States are also to notify NTMs/PTMs being faced by
their export products under SAFTA on an annual basis. It therefore recommended that the
Member States may submit fresh Notifications on NTMs/PTMs which may also be provided
to the Consultant by the Secretariat. The Consultant conducting the Second Phase of Study on
Regional Economic Integration has been requested to examine all issues relating to
NTMs/PTMs as well in his report.

Further Reduction in the Sensitive Lists under SAFTA

5. As approved by the Sixth Meeting of the SAFTA Ministerial Council, a Working

Group has been established to further reduce the number of products in the Sensitive Lists
under SAFTA.

5.1 The Second Meeting of the Working Group on Reduction in the Sensitive Lists under
SAFTA (Phase-III) held at the SAARC Secretariat, Kathmandu on 30 July 2013 reviewed the
progress of implementation of decisions relating to reduction in the Sensitive Lists as agreed
during Phase-II. The Ninth Meeting of the SAFTA Committee of Experts (Thimphu, 22-23

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July 2014) noted the current status of the number of products covered in the Sensitive Lists of
Member States before and after the 20% or more reduction as given below:

Member Number of Number of Status of Receipt of

State Products in Products in the Revised Sensitive
the original Revised Sensitive Lists as per HS-
Sensitive Lists Lists (Phase-II) 2012
(1) (2) (3) (4)
Afghanistan 1072 850 The List will be sent
by 15 September
2014
Bangladesh 1233 (LDCs) 987 (LDCs) Received
1241 (NLDCs) 993 (NLDCs)
Bhutan 150 156 Received

India 480 (LDCs) 25 (LDCs) Received

868 (NLDCs) 614 (NLDCs)
Maldives 681 154 Received

Nepal 1257 (LDCs) 998 (LDCs) The List will be sent

1295 (NLDCs) 1036 (NLDCs) by 15 December
2014
Pakistan 1169 936 Received
Sri Lanka 1042 837 (LDCs) Received
963 (NLDCs)

5.2 The Phase-II reduction has already been implemented by all Member States..

5.3 The Working Group is also currently considering the proposal put forward by Bhutan,
India, Maldives and Pakistan that peak tariff on all products may be reduced to 0 to 5% by
the year 2020, excluding a small number of about 100 tariff lines which may still remain in
the Sensitive Lists of Member States. The Member States are examining the proposal and
their comments and alternative proposals, if any, will be considered by the Third Meeting of
the Working Group on Reduction in the Sensitive Lists under SAFTA (Phase-III).

5.4 A Special SAARC Meeting of Customs and Commerce Authorities on Verification

Mechanism relating to Rules of Origin under SAPTA and SAFTA will also be held at the
SAARC Secretariat.

SAARC Agreement on Trade in Services

6. At the Sixteenth SAARC Summit, the SAARC Agreement on Trade in Services was
signed. The Leaders expressed the hope that this will open up new vistas of trade cooperation
and further deepen the integration of the regional economies. The Leaders called for the
early conclusion of negotiations on the schedules of specific commitments under the
Agreement. The Agreement has been ratified by all Member States and has entered into
force with effect from 29 November 2012. So far ten Meetings of the Expert Group on
SAARC Agreement on Trade in Services have been held and it has been agreed that at the

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Eleventh Meeting, all Member States would table their final offer lists and the Schedules of
Specific Commitments will also be finalised and adopted. The Eleventh Meeting of the
Expert Group will finalise the Schedules of Specific Commitments.

6.1 With the financial and technical assistance of Asian Development Bank, a Study on
Development of Institutional Framework for Data Collection on Trade in Services, including
Capacity Building has been conducted as recommended by the Second Meeting of Heads of
SAARC Statistical Organisations (Dhaka, 17 April 2008) and the Thirteenth Meeting of
Committee on Economic Cooperation (Dhaka, 24-25 November 2007).

6.2 During the SAARC-ADB Workshop on Studies on Trade, Economics and Finance
(SAARC Secretariat, Kathmandu, 21-22 June 2012), the Consultant presented the Draft Final
Study on “Development of Institutional framework for Data Collection on Trade in Services,
including capacity building”. The Workshop, inter-alia, recommended that as part of the
Phase II of the Study, the Consultant may prepare a regional common schedule for SATIS
negotiations in sectors like Tourism, Construction, Health, Education, Power and
Telecommunication which may be submitted to the SAARC Secretariat by end-August for
circulation to the Member Countries. It also recommended that in this endeavour the SAARC
Secretariat may facilitate the work by the Consultant and ADB could hold a meeting with the
Consultant and the National Experts in mid-August to expedite the preparation of the regional
common schedule, given the paucity of time.

6.3 Accordingly, for the purpose of preparing a regional common schedule for SATIS
negotiations, a SAARC-ADB Meeting of Country Experts on Trade in Services was held at
the SAARC Secretariat, Kathmandu on 28-29 August 2012. The draft common schedule
prepared taking into account the highest common denominator from the request and other
lists of the Member States is being examined by the Member States.

Harmonisation of Standards

7. The Agreement on the Establishment of South Asian Regional Standards Organisation

(SARSO) has now been ratified by all Member States and it has entered into force with effect
from 25 August 2011. The SAARC Agreement on Multilateral Arrangement on Recognition
of Conformity Assessment; and the SAARC Agreement on Implementation of the Regional
Standards as finalised by the Inter-Governmental Meeting in Bangladesh on 13-14 March
2011, were signed during the Seventeenth SAARC Summit held in Addu, Maldives on 10-11
November 2011. These Agreements have so far been ratified by Bangladesh, Bhutan, India
and Pakistan.

7.1 The First Meeting of the Governing Board of SARSO was held in Bangladesh on 14-
15 December 2011. The Governing Board expressed satisfaction and appreciation that with
the holding of Meetings of Sectoral Technical Committees the process has been started for
harmonisation of standards of identified products such as sugar, biscuits, instant noodles,
vegetable ghee, black tea, cement, steel tubes, structural steel and the identified Hessian and
Jute tarpaulin fabric. It also approved the recommendation of the Second Meeting of Sectoral
Technical Committee on Food and Agricultural Products (Dhaka, 12-13 December 2011) that
all standards finalised by SARSO may have a distinct identity and may be known as SAARC
Regional Standards (SARS).

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7.2 The South Asian Regional Standards Organisation (SARSO), a SAARC Specialised
Body, became operational in Dhaka with effect from 3rd April 2014. A decision to this effect
was taken by the Second Meeting of Governing Board of South Asian Regional Standards
Organisation (SARSO) held in Dhaka on 2-3 April 2014 under the Chairmanship of Mr.
Phuntsho Wangdi, Director-General, Bhutan Standards Bureau and Member on the
Governing Board from Bhutan. The Governing Board appointed Dr. Syed Humayun Kabir
as the first Director General of SARSO for a period of three years; recommended the salary
and allowances of Director-General, Professional Staff and General Services Staff of
SARSO; and considered the interim Institutional Cost Budget prepared by the Director-
General of SARSO for the period April – December 2014. Dr. Kabir assumed the charge of
the office of Director General of SARSO with effect from 3rd April 2014. Mr. Uwe Miesner,
Head of Technical Cooperation in Asia, German National Institute of Metrology (PTB) made
a presentation on the status of activities held and proposed to be held under the SAARC-PTB
MOU for strengthening quality infrastructure in the region.

7.3 The Governing Board also considered and approved the Report of the First Meeting
of the SARSO Technical Management Board which was also held in Dhaka on 31 March – 1
April 2014. The Technical Management Board finalised its own Technical Rules and
considered the Reports of the nine Sectoral Technical Committees which carried out the task
of harmonisation of standards of identified products in the areas such as food and agricultural
products; jute, textiles and leather; and building materials.

7.4 It was agreed that in addition to electric cables, the STC on Electrical, Electronics,
Telecoms and IT will also take up the harmonisation task of Double Capped Fluorescent
Lamp. It was also agreed that in addition to Toilet Soap, the STC on Chemical and Chemical
Products will take up the harmonisation task of Shampoo. It emphasized that the attempts
should be made to harmonise the standards of those products which are being actively traded
or have the potential of being actively traded amongst the SAARC Member States.

7.5 The Third Meeting of the Sectoral Technical Committee on Food and Agricultural
Products was hosted by Pakistan in Karachi on 2-3 April 2012 where further work on
harmonisation of identified food products was undertaken.

7.6 The Second Meeting of Sectoral Technical Committee on Jute, Textiles and Leather
was held in Dhaka, Bangladesh on 17-18 April 2013. The Meeting resumed discussion on
harmonisation of standards of Hessian as prevailing in Bangladesh and India. It finalised the
updated Comparative Study on Hessian. India agreed to prepare Draft SAARC Standard on
“Hessian” which will be considered at the Third Meeting of the Sectoral Technical Committee.
The Meeting also identified Cotton Drill as the product for harmonizing of standards and
updated Comparative Chart on Textiles – Cotton Drill – Specifications. Bangladesh agreed to
prepare Draft SAARC Standard on “Textiles – Cotton Drill – Specification” which will be
considered at the Third Meeting of the Sectoral Technical Committee. It further discussed the
Comparative Chart of Cotton Twill and updated the same. Bangladesh agreed to prepare Draft
SAARC Standard on “Textiles – Cotton Twill – Specification” for consideration at the Third
Meeting of the Sectoral Technical Committee. The Meeting also discussed Jute Twine and
agreed to adopt Indian or Bangladesh standard as SAARC Standard. It welcomed the offer of
India to prepare Draft SAARC Standard on “Jute Twine” for consideration of the Third Meeting
of the Sectoral Technical Committee. In order to get first hand knowledge of manufacturing
process and standards being observed in Bangladesh on jute, the participants visited Latif

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Bawani Jute Mill located in Bemra, Dhaka. The Third Meeting of the Sectoral Technical
Committee on Jute, Textiles and Leather was held in Colombo on18-19 December 2013.

7.7 The Third Meeting of this Sectoral Technical Committee on Building Materials was
held at the SAARC Secretariat, Kathmandu on 4-5 June 2013. The Meeting resumed its
discussions on harmonizing the standards of (a) Cement; (b) Steel Tubes; (c) Structural Steel;
(d) High strength deformed steel bars and wires for concrete reinforcement; (e) Steel wires used
in pre-stressed concrete; (f) Ceramic Tiles; and (g) Method of testing of steel and steel tubes
(such as tensile testing, flattening, bend test etc). It initiated discussion on harmonisation of
Terminology Standards (IS-1956 Part II: 1976, Part III: 1975, Part IV: 1975 and Part VIII:
1976) – Glossary of Terms relating to Iron and Steel. A Template prepared by Sri Lanka to
enable Member States to send their comments on standards was also discussed and finalised.

7.8 The following is the current status of harmonisation of identified products by the
respective Sectoral Technical Committees under SARSO:

SARSO Sectoral Technical Identified Products on which standards Meetings held/to be held
Committees (STCs) are being harmonised

STC on Food and 1. Refined Sugar First Meeting at SAARC

Agricultural Products 2. Biscuits Secretariat on 24 August
3. Standards of Sugar-free Biscuits 2011
4. Standards of Diet Biscuits Second Meeting at
5. Standards of on Microbiological Dhaka, Bangladesh on
requirements for cream portion of filled 12-13 December 2011.
biscuits Third Meeting at
6. Instant Noodles Karachi, Pakistan on 2-3
7. Black tea April 2012.
8. Vanaspati/Banaspati (veg. ghee) Fourth Meeting is
9. Skimmed Milk Powder scheduled to be held in
10. National/CODEX Standard for Hygienic India on 21-22 Sept
condition 2014.

STC on Jute, Textile and 1. Identified Hessian products First Meeting at the
Leather 2. Jute Tarpaulin Fabric SAARC Secretariat,
2. Jute Bags for packing of various Kathmandu on 23-24
commodities November 2011
3. Jute twine Second Meeting in
4. Jute Carpet backing Fabric Dhaka on 17-18 April
5. Jute yarn 2013.
6. Cotton Drill Fabric Third Meeting was held
7. Cotton Twill Fabric in Colombo on 18-19 Dec
8. Towels and Toweling Fabric 2013.
Fourth Meeting is to be
held in India.

STC on Building Materials 1. Steel Tube for Structural purposes Three Meetings have
2. Ordinary Portland Cement been held at the SAARC
3. Steel Bars for Concrete Reinforcement Secretariat on
4. Structural Steel 21-22 November 2011;
5. High strength deformed steel bars and 10-11 July 2012;
wires for concrete reinforcement 4-5 June 2013.
6. Steel wires used in pre-stressed concrete Fourth Meeting is to be
7. Method of testing of steel and steel tubes held at the SAARC
(such as tensile testing, flattening, bend test Secretariat.
etc
8. Ceramic Tiles

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 STC on Chemicals and 1. Shampoo and First Meeting is
Chemical Products 2. Toilet soap scheduled to be held in
India on 23-24 Sept
2014.
STC on Electrical, 1. Electric cable First Meeting is
Electronics, Telecom and 2. Double capped fluorescent Lamp scheduled to be held in
IT India on 25-26 Sept 2014

STC on Conformity Established by the First Meeting of the First Meeting is to be

Assessment SARSO Technical Management Board held in India.
(Dhaka, 31 March – 1 April 2014)

7.9 The First Meeting of SAARC Expert Group on Accreditation (SEGA) was held in the
Maldives on 3-4 September 2012 with the financial and technical assistance of the PTB
(German National Institute of Metrology). The PTB has been extending cooperation in
helping Member States in the field of quality infrastructure which include metrology,
standardization, testing, certification and accreditation. PTB has also been making efforts at
raising awareness about standards in the region. This is being done under the SAARC-PTB
MOU signed in 2003. The Second Meeting of SAARC Expert Group on Accreditation
(SEGA) was held in Dhulikhel, Nepal on 20-21 January 2014 followed by a National
Awareness Workshop on Accreditation with financial and technical assistance of PTB on 22
January 2014 in Kathmandu Similarly, the Third Meeting of SEGA was held in Lahore,
Pakistan on 2-3 September 2014.

Matters relating to cooperation in the field of Customs

8. The Sub-Group on Customs Cooperation has been deliberating on harmonisation of

customs clearing procedures and documentation, inter-operability of Systems being followed
by customs administrations in Member States; preparation of a simplified form for Customs
Declaration for trade in goods in the SAARC region; harmonisation of 8-digit tariff lines in
the Member States and capacity building. The Ninth Meeting of the SAARC Sub-Group on
Customs Cooperation was held in Colombo, Sri Lanka on 20-21 June 2013. The Meeting
discussed matters relating to harmonisation of requirements of Mandatory and Additional
Documents for customs clearance; inter-operability of Systems being followed by customs
administrations in Member States; preparation of a simplified form for Customs Declaration
for trade in goods in the SAARC region; harmonisation of 8-digit tariff lines in the Member
States; and Capacity Building. The Meeting also discussed matters relating to examining the
possibility of accepting the electronic copies of the SAFTA Certificates of Origin received
from importers for clearance of consignments; exploring the possibility of having a seven-day
working week in case of congestion of consignments at the customs border points; and
considering the possibility of having a Single Joint Customs Point for speedy movement of
consignments across the Member States. The Tenth Meeting of the Sub-Group on Customs
Cooperation will be held in Lahore, Pakistan in 2014, preceded by a Training Programme on
Customs Enforcement Matters.

8.1 As a part of capacity building of relevant officials of Customs Departments of

Member States, a Training Programme on Customs Matters was also held in Colombo, Sri
Lanka on 18-19 June 2013 preceding the Ninth Meeting of the Sub-Group on Customs
Cooperation. The topic of the Training was Application of General Interpretative Rules
(GIRs) in Commodity Classification and Amendments in HS 2012.

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Cooperation in the field of Statistics

9. In accordance with the decision of the Thirtieth Session of the Standing Committee
(Islamabad, 18-19 July 2004) cooperation among the Member States commenced in the field
of statistics. So far five Meetings of Heads of SAARC Statistical Organisations have been
held in India (26-27 May 2005); Bangladesh (17 April 2008); Bhutan (18-19 November
2010); Islamabad (24-25 October 2011); and Maldives (4-5 November 2012) respectively
with a view to finalizing standard formats for exchange of statistical data in various economic
and social fields. In order to effectively promote cooperation in the field of statistics in a
structured manner, seven SAARCSTAT Technical Sub-Groups have been formed in various
fields.

9.1 The Meetings of Heads of SAARC Statistical Organisations (SAARCSTAT) review

the progress, inter-alia, in SAARCSTAT website, publication of SAARC Statistical
Yearbook, publication of SAARC Catalogue of Statistical Publications, SAARC Directory of
Statistical Experts, SAARC Classification, Project on Concepts, Definitions and Standards of
Health Statistics for the SAARC region, development of institutional framework for Data
Collection on Trade in Services and discussion on SAARC forum for Disability Statistics.

9.2 As mandated by the Thirty-eighth Session of the Standing Committee, the Asian
Development Bank (ADB) was approached by the SAARC Secretariat to provide financial
and technical assistance for development of web-based, user-protected interface and
institution of a designated Statistics Cell at the SAARC Secretariat for coordinating all
statistical data or requirements thereof. With the financial and technical assistance of ADB, a
Study on Statistical Cell has already been conducted and finalised.

9.3 The Consultant appointed for SAARCSTAT Study has been engaged to complete the
second phase of the work relating to SAARCSTAT Web Portal Development with the
assistance of Asian Development Bank as per the recommendations contained in his earlier
Study which have been approved by the Fifth Meeting of SAARCSTAT held in the Maldives
on 4-5 November 2012.

9.4 The Sixth Meeting of SAARCSTAT was hosted by Nepal on 12-13 June 2014.

SAARC Arbitration Council (SARCO)

10. The Agreement for Establishment of SAARC Arbitration Council was signed during
the Thirteenth SAARC Summit held in Dhaka on 12-13 November 2005.

10.1 SAARC Arbitration Council commenced its operations in Islamabad under Syed
Sultan Ahmed as the first Director General with effect from 1 September 2010 for a period of
four years. Four Meetings of the Governing Board of SARCO have been held so far. The
First Meeting of the Governing Board of SAARC Arbitration Council (SARCO) was held at
the SAARC Secretariat, Kathmandu on 7-8 January 2009, Second, Third and Fourth
Meetings were held in Islamabad on 20-21 December 2011, on 21-22 November 2012 and
13-14 January 2014. SARCO is in the process of finalising the panel of arbitrators.

10.2 As per Article II of the Agreement for Establishment of SAARC Arbitration Council,
its objectives and functions are as follows:

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 (a) provide a legal framework within the region for fair and efficient settlement
through conciliation and arbitration of commercial, investment and such other
disputes as may be referred to the Council by agreement;
(b) promote the growth and effective functioning of national arbitration
institutions within the region;
(c) provide fair, inexpensive and expeditious arbitration in the region;

(d) promote international conciliation and arbitration in the region;

(e) provide facilities for conciliation and arbitration;
(f) act as a co-ordinating agency in the SAARC dispute resolution system;
(g) coordinate the activities of and assist existing institutions concerned with
arbitration, particularly those in the region;
(h) render assistance in the conduct of ad hoc arbitration proceedings;
(i) assist in the enforcement of arbitral awards;
(j) maintain registers/panels of:
(i) expert witnesses, and
(ii) suitably qualified persons to act as arbitrators as and when required;
and
(k) carry out such other activities as are conducive or incidental to its functions.

10.3 Mr. Thusantha Wijemanna frm Sri Lanka is expcted to join SARCO with effect from 1
October 2014 as the next Director-oGeneral.

SAARC Trade Fairs

11. The details of dates and venues of the SAARC Trade Fairs held so far are given
below: -

1. First SAARC Trade Fair New Delhi, 9-14 January 1996

2. Second SAARC Trade Fair Colombo, 8-15 September 1998
3. Third SAARC Trade Fair Karachi, 21-26 April 2001
4. Fourth SAARC Trade Fair Kathmandu, 25-29 October 2002
5. Fifth SAARC Trade Fair Dhaka, 27-31 December 2003
6. Sixth SAARC Trade Fair New Delhi, 6-10 January 2005
7. Seventh SAARC Trade Fair Karachi, 16-18 June 2006
8. Eighth SAARC Trade Fair Colombo, 28-31 August 2008
9. Ninth SAARC Trade Fair Thimphu, 11-14 September 2009
10. Tenth SAARC Trade Fair Kathmandu, 15-19 December 2010
11. Eleventh SAARC Trade Fair Dhaka, 30 March – 1 April 2012
12. Twelfth SAARC Trade Fair Venue to be decided

11.1. The Eleventh SAARC Trade Fair was held in Bangladesh during 30 March – 1 April
2012 along with SAARC Tourism Mart during 30 March – 1 April 2012 in a colourful
manner. The SAARC Travel and Tourism Mart and SAARC Cultural Festival, Seminars on
Tourism and Trade were organized simultaneously. A total of 360 stalls were put up in the
Fair out of which 70 stalls were from SAARC Member States other than Bangladesh. More
than 100,000 persons visited the three-day Fair which generated lot of enthusiasm for
promotion of intra-SAARC trade and tourism. Such Fairs provide business opportunities for
the region to enhance intra-SAARC trade and intra-SAARC tourism.
11.2 As decided by the Thirty-seventh Session of the Standing Committee, Observers to
SAARC are now being invited to participate in the SAARC Trade Fairs.

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Cooperation in the field of Finance

12. The First Meeting of SAARC Finance Ministers approved the establishment of an
Inter-Governmental Expert Group on Financial Issues with a mandate to develop its draft
Terms of Reference based on the areas outlined by the SAARC Leaders at their Thirteenth
Summit, including development of a roadmap for achieving the South Asian Economic
Union (SAEU) in a gradual and phased manner. So far six Meetings of SAARC Finance
Ministers have been held in Pakistan (2006), India (2007), Maldives (2009), Bhutan (2010),
Bangladesh (2012); and Sri Lanka (2013).

12.1 The Seventeenth SAARC Summit held in Addu, Maldives on 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 Fifth Meeting of SAARC
Finance Ministers deliberated on the directive of the Summit and recommended that the
Inter-Governmental Expert Group on Financial Issues may first look into the matter and
make suggestions to be considered by the higher SAARC bodies. The Chair of the Meeting,
Bangladesh also circulated a paper on “Economic Integration in the SAARC Region:
Towards South Asian Economic Union (SAEU)” for consideration of Member States.

12.2 Following the Thirteenth Summit directive, the Informal Meetings of the SAARC
Finance Ministers are being held on the sidelines of ADB Governing Board Meetings along
the same lines as the meetings of the Informal Meetings of the Council of Ministers. A theme
for the meeting is usually suggested by the SAARC Chair and a draft agenda is then
circulated by the Secretariat. So far seven Informal Meetings of SAARC Finance Ministers
have taken place in Hyderabad, India on 3 May 2006; Kyoto, Japan on 5 May 2007; Madrid,
Spain on 4 May 2008; Bali, Indonesia on 3 May 2009; Hanoi, Vietnam on 4 May 2011;
Manila on 3 May 2012 and New Delhi on 3 May 2013. The theme for the Seventh Meeting
was Infrastructure Financing in South Asia. The Eighth Informal Meeting of SAARC Finance
Ministers was held in Astana, Kazakhstan on 3 May 2014. The proposed theme for the Eighth
Informal Meeting was “How Regional Cooperation Can Strengthen Growth in South Asia”.

12.3 The Sixth Meeting of the Inter-Governmental Expert Group (IGEG) on Financial
Issues was held at the SAARC Secretariat on 23-24 April 2013. It was attended by the
representatives of Finance Ministries and Central Banks of SAARC Member States. The
Meeting examined the SAARC Study on ‘Regional Economic Integration in SAARC, its
current extent and recommendations for further deepening’ conducted with the assistance of
Asian Development Bank. It discussed matters relating to Public Debt Management;
Development of Capital Market in South Asia; Financial Inclusion - Access to financial
services and credit to financially excluded sections of the society; Experiences of Financing
for Infrastructural Development; Combating Money Laundering and Terrorist Financing;
Harmonisation of fiscal and trade indicators; comparative performance of key economic
indicators; sharing of experience and best practices in the financial sector; greater flow of
financial capital and intra-regional long-term investment. The Meeting also reviewed the
progress in the implementation of Swap Arrangement. Two Meetings of SAARC Public
Debt Managers’ Forum have been held in Sri Lanka and India in 2012 and 2013 respectively.
The Third Meeting of SAARC Public Debt Managers’ Forum is scheduled to be held in
Kabul in 2014 as offered by the Governor, Afghanistan Bank during Second Meeting of the
Forum.

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12.4. The Sixth Meeting of IGEG on Financial Issues also agreed to discuss the best
practices in the following sectors during the next Meeting of IGEG:-

Best Practices Paper by

Inter-connectedness of financial market Bangladesh
infrastructure and its regulation
Integrated risk management framework for Pakistan
financial management
Financial safety net: deposit insurance Bhutan
Bankruptcy legislation India
Ease of doing business Sri Lanka
Role of Remittances in economic and Nepal
financial development
Islamic Finance Maldives

12.5 The Seventh Meeting of the Inter-Governmental Expert Group on Financial Issues as
held at the SAARC Secretariat on 20-21 May 2014.

12.6 Study on codification of variations in the level of development of Capital Markets in

SAARC Member States has also been conducted with the financial and technical assistance
of Asian Development Bank. It was recommended by SAARC Colloquium on Management
of Stock Exchange Systems and Regulation of Stock Markets held at the SAARC Secretariat,
Kathmandu on 21-22 April 2008. The Study was presented by the Consultants at the
SAARC-ADB Workshop held at the SAARC Secretariat on 21-22 June 2012.

12.7 At the Fifth Meeting of SAARC Finance Ministers held in Dhaka on 30 January 2012,
the delegations briefed the Meeting about the overall economic outlook of their respective
economies and impact of global economic situation in the South Asian region. It was agreed
that the region should evolve joint strategies for facing the impact of global economic crisis
in a spirit of mutual cooperation. It was felt that the past experience and the present scenario
at the global level clearly indicates that multiple factors affect world economy which is
increasingly getting inter-linked and hence developments elsewhere have an effect in other
regions including South Asia. There is need to initiate effective and coordinated policy action
in monetary and fiscal arena to avoid possible risks. It may be necessary to examine the need
to develop a regional coordinated surveillance mechanism to forecast the fall-out of external
shocks which may create an economic and financial dislocation within the SAARC region.
For this purpose, a detailed study may be conducted on possible regional strategy with the
help of regional/international financial institutions like ADB. The Meeting requested the
SAARC Secretariat to approach ADB in this regard.

12.8 In accordance with the above mandate, a Study is being conducted with the help of
Asian Development Bank to examine the need to develop a Regional Coordinated
Surveillance Mechanism to forecast the fall-out of external shocks which may create an
economic and financial dislocation within the SAARC region. An Inception Workshop for
the Study was held at the SAARC Secretariat, Kathmandu on 3-4 October 2013.

12.9 At the SAARC-ADB Inception Workshop held at the SAARC Secretariat,

Kathmandu on 3-4 October 2013, Mr. Subir Gokarn, the Consultant for the Study on
Development of Regional Coordinated Surveillance Mechanism for SAARC Countries
presented a framework of the Study. The purpose of the system is to provide early warning

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and mitigation. He highlighted that without early warning, a liquidity problem could turn into
a solvency problem. The main challenge is to create an appropriate and comprehensive data
dashboard based on the availability of high frequency data in a timely manner. The Meeting
agreed that there is a need for a regional surveillance mechanism because international
surveillance systems fail to notice many important signals at the country or regional levels.
That is why ASEAN countries decided to develop their own mechanism after 1997 financial
crisis.

Draft SAARC Agreement on Promotion and Protection of Investments

13 The Seventh Meeting of SAARC Sub-Group on Investment and Arbitration held at

the SAARC Secretariat on 29 November 2007 finalised the Text of Draft SAARC Agreement
on Promotion and Protection of Investments except for the text of Sub-Article 4 (3) (c)
which reads as follows:

[any other bilateral or multilateral agreement relating to investment signed

prior to this Agreement.]

13.1 The Thirty-ninth Session of the Standing Committee (Addu, Maldives, 7-8 November
2011) expressed the hope that the consensus would be arrived at expeditiously on the text of
the Draft SAARC Agreement on Promotion and Protection of Investments. The Meeting
emphasized that the text of the Agreement be finalised by the Eighth Meeting of the Sub-
Group for signature at the Eighteenth SAARC Summit.

13.2 As per the decision of the Thirty-ninth Session of the Standing Committee, the
SAARC Secretariat tried to organize a Meeting of the Experts to finalise the Agreement.
However, there is a difference of opinion among Member States as to whether a Meeting is
necessary, if the question of position of a Member State with regard to deletion of a minor
article is only required.

13.3 The Meetings of SAARC Finance Secretaries and SAARC Finance Ministers have
underlined the importance of early finalisation of the Draft Text of the SAARC Agreement
on Promotion and Protection of Investments. During discussions in these Meetings,
Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal and Sri Lanka have recommended
deletion of the sub-article 4 (3) (c) with a view to finalizing the draft text of the SAARC
Agreement on Promotion and Protection of Investments,

13.4 At the Fortieth Session of Standing Committee (Maldives, 19 February 2014), the
delegation of Pakistan informed the Committee that the text of the Agreement is under
consideration and views will be shared shortly. The Committee recommended that a meeting
of the Sub Group may be convened to re-negotiate the existing text of the draft Agreement.

13.5 The Eighth Meeting of SAARC Sub-Group on Investment and Arbitration was held at
the SAARC Secretariat on 7-8 August 2014 to finalise the text of the Draft Agreement. Its
Ninth Meeting is scheduled to be held at the SAARC Secretariat on 9-10 October 2014.

Avoidance of Double Taxation

14. The SAARC Limited Multilateral Agreement on Avoidance of Double Taxation and
Mutual Administrative Assistance in Tax Matters was signed during the Thirteenth SAARC

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Summit (Dhaka, 12-13 November 2005) and the Amendment in its Article 16 (1) (Entry into
Force ) – was approved by the Thirty-third Session of the Standing Committee (New Delhi, 31
March – 1 April 2007). The Agreement entered into force on 27 December 2006 but with the
amendment, actually started its implementation from April 2011 as per Article 14.

14.1 As mandated in Article 12 of the SAARC Limited Multilateral Agreement on Avoidance

of Double Taxation and Mutual Administrative Assistance in Tax Matters, the First SAARC
Meeting of Competent Authorities on Avoidance of Double Taxation and Mutual
Administrative Assistance in Tax Matters was held at the SAARC Secretariat, Kathmandu on
5-6 April 2011 to facilitate its effective implementation. It reviewed the Agreement for its
effective implementation and suggested some amendments for consideration of the Member
States. For exchange of information and expertise among the tax authorities of Member
states, the Meeting decided on conducting Seminars/Training Programmes in each SAARC
Member State on a rotational basis on the identified topics. The following topics were
identified:

a. Seminar/Training Programme on Automation and System Management (held

at NADT, Nagpur, India on 11-14 July 2011)
b. Seminar/Training Programme on Corporate Taxation Issues (held in Colombo
on 20-23 February 2012)
c. Seminar/Training Programme on Tax Payers Services (held in Nepal on 27-30
November 2012)
d. Seminar/Training Programme on International Taxation and Transfer Pricing
(held at NADT, Nagpur, India on 4-7 March 2014)
e. Seminar/Training Programme on Exchange of Programme and Large Tax
Payers Units (Lahore, Pakistan, 7-11 April 2014)

14.2. The Second Meeting of SAARC Competent Authorities on Avoidance of Double

Taxation and Mutual Administrative Assistance in Tax Matters was held at the SAARC
Secretariat, Kathmandu on 22-23 May 2013. It reviewed the progress in the implementation
of the SAARC Limited Multilateral Agreement on Avoidance of Double Taxation and
Mutual Administrative Assistance in Tax Matters. The delegates made presentations on the
existing tax structures in their respective countries. The Meeting resumed its discussion on
the amendments proposed in the SAARC Limited Multilateral Agreement on Avoidance of
Double Taxation and Mutual Administrative Assistance in Tax Matters.

14.3 The Second Meeting also held initial discussion on the proposal of the Maldives on
expansion of the scope of the Agreement as recommended by the Fifteenth Meeting of the
Committee on Economic Cooperation held in the Maldives on 15-16 July 2012. As a step
towards widening the scope of the Agreement, the delegation of Pakistan proposed that a
SAARC Tax Information Exchange Agreement (SAARC TIEA) may be entered into by the
SAARC Member States. The Meeting deliberated on the matter and welcomed the offer of
Pakistan to prepare a Draft SAARC Agreement for this purpose for discussion in the Third
Meeting of the Competent Authorities.

14.4 With a view to enhancing capacity building, the Second Meeting of Competent
Authorities welcomed the offers of Pakistan and India to host a four-day Seminar/Training
Programme on Exchange of Information/Large Tax Payers Unit at National Inland Revenue
Training Academy, Lahore during September/October 2013; and a four-day

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Seminar/Training Programme on International Taxation and Transfer Pricing in
February/March 2014 at National Academy of Direct Taxes (NADT), Nagpur, respectively.

14.5 The Seminar on International Taxation and Transfer Pricing was held at National
Academy of Direct Taxes (NADT), Nagpur, India on 4-7 March 2014. The four-day
Seminar/Training Programme on Exchange of Information/Large Tax Payers Unit was held
on 7-11 April 2014 at National Inland Revenue Training Academy, Lahore.

14.6 The Third Meeting of SAARC Competent Authorities on Avoidance of Double

Taxation and Mutual Administrative Assistance in Tax Matters was held in Bhutan on 28-29
July 2014. During the Meeting, the delegates made country presentations on the salient
features of tax structures prevailing in their respective Member Countries. The Meeting
resumed its discussion on facilitating effective implementation of the SAARC Limited
Multilateral Agreement on Avoidance of Double Taxation and Mutual Administrative
Assistance in Tax Matters, including amendments proposed in the Agreement; held
discussion on Concept Paper prepared by the Maldives on expanding the scope of the
Agreement; considered information provided by Member States on nine parameters for
entering into a comprehensive SAARC Agreement on Avoidance of Double Taxation. It also
commenced consideration of Draft SAARC Tax Information Exchange Agreement (SAARC
TIEA) prepared by Pakistan.

14.7 While reviewing the Seminars/Training Programmes conducted since the Second
Meeting of SAARC Competent Authorities, it was agreed that frequency of conducting such
Seminars/Training Programmes should be increased for the benefit of all concerned officials
of Member States which would promote networking among them, encourage exchange of
information and enhance capacity building in the tax authorities of all Member States. For
this purpose, it was decided to conduct the following Seminars/Training Programmes in
2014-2015:

Topic Venue Tentative Schedule

Taxation Issues in Digital Economy India First quarter of 2015
Tax Treaty Negotiations and Application Nepal April 2015
Audit and Investigation of Multinational Enterprises Pakistan Oct 2014/Feb 2015
Automation and e-payment Sri Lanka June 2015

14.8 The Fourth Meeting of the SAARC Competent Authorities on Avoidance of Double
Taxation and Mutual Administrative Assistance in Tax Matters will be hosted by India in
April 2015.

SAARCFINANCE

15. SAARCFINANCE (the Group of Central Bank Governors of the SAARC Member
States) has been engaged to carry out several initiatives for enhancing financial cooperation
among Member States, especially among Central Banks in the region. The SAARC Payment
Council (SPC) was launched by SAARCFINANCE in 2008. At its regular meetings, the
SAARCFINANCE also undertakes exchange of views on the impact of current global
financial crisis on individual South Asian economies.

15.1 By amending its Terms of Reference, SAARCFINANCE has decided to hold two
meetings in the year, one in the region and second on the sidelines of annual meetings of the
World Bank in Washington.

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15.2 The status report on the activities of SAARCFINANCE is presented by the Chair of
the SAARCFINANCE to the meetings of the SAARC Finance Ministers.

15.3 The Twenty-sixth Meeting of SAARCFINANCE Governors’ Group and a

Symposium on Impact of EU Debt Crisis on South Asian Economies were held in Islamabad,
Pakistan on 18-19 June 2013. The Twenty-eighth Meeting of SAARCFINANCE Governors’
Group and Symposium was held in Colombo on 24 July 2014.

15.4 During the Twenty-seventh Meeting of SAARCFINANCE held in Washington on 9

October 2013, the Chairmanship of SAARCFINANCE was handed over by the Maldives to
Nepal.

15.5 The Swap Arrangement was announced on 16 May 2012 by the Governor of Reserve
Bank of India in Pokhara, Nepal with a contribution of India of US$ 2 billion for SAARC
countries. The first agreement under the Swap Arrangement was signed between Bhutan and
India on 8 March 2013 for an amount of US$ 100 million for three years. The Swap facility
will further economic cooperation within the SAARC region, pave the way for increased
intra-regional trade and contribute to enhancing the collective welfare of the region.

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 SAARC SECRETARIAT PRESENTATION ON ROC-TF ANNUAL
MEETING-BANGKOK-23 SEPTEMBER 2014

SAARC, South Asian Association for Regional Cooperation, established in

1985, with original seven Member states, that are, Bangladesh, Bhutan, India, Maldives,
Nepal, Pakistan and Sri Lanka, and Afghanistan joined the body in 2007. The SAARC
Charter signed by the leaders of its original Members during the First SAARC Summit held
in Dhaka, Bangladesh on 8 December 1985.
Out of eight, five Member States belong to the category of Least Developed Countries
(LDC), these are Afghanistan, Bangladesh, Bhutan, Maldives and Nepal.
Ladies and gentlemen, I would like to share a brief account of SAARC ACTIVITIES on
the area of Trade Facilitation.
SAPTA
SAARC Preferential Trading Arrangement was signed during Seventh SAARC Summit,
Dhaka, Bangladesh on 11 April 1993. Four Round of Trade Negotiations under SAPTA were
conducted, based on positive list approach. Pursuant to commencement of the SAPTA’s
activities, its operationalisation was notified to WTO on 25 April 1997 under Enabling
Clause. But SAPTA covered limited number of products.
SAFTA or South Asian Free Trade Area, was signed during 12th SAARC Summit held in
Pakistan on 6th January 2004.
After ratification by all Member States, it entered into force with effect from 1 January 2006.
After issuance of customs notifications by all Member States, the Trade Liberalization
Program under SAFTA commenced w.e.f. 1 July 2006, based on negative or sensitive list
approach.
Efforts has been made to reduce the sensitive lists to the minimum, especially by NLDCs for
the export products of LDCs.
India has only 25 tariff lines in its sensitive lists for LDCs, including tobacco and whisky.
Sensitive Lists of Bhutan and Maldives contain only about 150 tariff lines.
The third phase of reduction in the Sensitive Lists is currently underway.
Intra-SAARC Trade Flows under SAFTA have been witnessing upward trend since
launching of TLP in July 2006. Still it is much below the expected levels and much below the
existing regional trade taking place currently among the Member States
Efforts are on to bring intra-SAARC trade taking place under the bilateral trade regimes of
Member States under the umbrella of SAFTA. For this purpose, a study is also being
conducted with the assistance of Asian Development bank.
SAFTA was notified to WTO under Enabling Clause on 21 April 2008, with all Member
States also individually forwarding their data on intra-SAARC trade flows under SAFTA to
WTO.
SAARC STUDIES
Study on the Regional Economic Integration in SAARC, its current extent and
recommendations for further deepening (first phase)
Study on “Development of Institutional Framework for Data Collection on Trade in
Services, including Capacity Building”
SAARC-ADB Inception Workshop for the SAARC Study on Regional Economic
Integration (Second Phase)
On Trade Facilitation:
For smooth flow of trade in goods, it is essential to facilitate trade. For this purpose several
initiatives are being taken by SAARC which include harmonization of standards,
harmonization of customs documents and customs procedures.

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Facilitating transit and transportation of goods; and movement of people, particularly
businessmen across the borders; removal of Non-Tariff Barriers and Para-Tariff Barriers;
settlement of disputes; promoting intra-regional trade, inter-alia, by organizing events such as
Trade Fairs and Trade Exhibitions.
Trade Facilitation – Customs
In the area of Customs, a SAARC Group on Customs Cooperation has been established at the
level of Heads of Customs Organizations of Member States. A Sub-Group on Customs
Cooperation has also been established at the functional level. The measures currently under
way are: Harmonization of Customs Documentation, Customs Procedures, 8-digit Tariff
Lines of Member States, Inter-operability of Systems being followed by customs
administrations, preparation of a simplified from for Customs Declaration for trade in goods
in the SAARC region and Capacity Building.
The Ninth Meeting of the Sub-Group on Customs Cooperation was held in Colombo in June
2013 to discuss above issues.
A SAARC Agreement on Mutual Administrative Assistance in Customs Matters has been
signed and is already in force.
To help the SAARC process, a Consultant was appointed to conduct a Study on Role and
Scope of Customs in Trade Facilitation. The recommendations of the Consultant were
considered by the Group on Customs Cooperation.
Standardizations on Trade Facilitation area:
SARSO or South Asian Regional Standards Organisation has been established in Dhaka,
Bangladesh.
Two Meetings of the Governing Board of SARSO have so far been held, and the First
Director General of SARSO assumed his charge on 3 April 2014.
SARSO Governing Board will be assisted by:
Technical Management Board (TMB); and Five Sectoral Technical Committees for
harmonization of standards; that are:
(i) Food and Agricultural Products
(ii) Electrical, Electronics, Telecoms and IT
(iii) Jute, Textiles & Leather
(iv) Building Materials
(v) Chemical and Chemical Products
Sectoral Technical Committees have started the process for harmonisation of standards of
identified products such as sugar, biscuits, instant noodles, vegetable ghee, black tea, cement,
steel tubes, structural steel and the identified Hessian and Jute tarpaulin fabric.
Sectoral Technical Committees have started the process for harmonisation of standards of
identified products such as sugar, biscuits, instant noodles, vegetable ghee, black tea, cement,
steel tubes, structural steel and the identified Hessian and Jute tarpaulin fabric.
In respect of some of the products, the work on harmonization of standards is in advance
stages.
SAARC AGREEMENTS:
The following Agreements in the fields of standards have been signed under the framework
of SAARC:
Agreement on Establishment of South Asian Regional Standards Organisation;
SAARC Agreement on Multilateral Arrangement on Recognition of Conformity
Assessment; and
SAARC Agreement on Implementation of the Regional Standards
The Seventh Meeting of SAFTA Ministerial Council held in Colombo on 23 August 2013
and the Sixth Meeting of SAARC Finance Ministers also held in Colombo on 30 August
2013, reviewed the progress with regard to progress towards Regional Economic

19
Integration and urged all concerned SAARC mechanisms for expeditious action towards the
implementation of mandates of higher SAARC bodies.
A Special Meeting of SAFTA Committee of Experts at the level of Joint Secretaries or
Director-Generals of SAARC Member States was held at the SAARC Secretariat,
Kathmandu on 31 July – 1 August 2013 to examine Non-Tariff Measures and Para-Tariff
Measures faced by the exports of Member States under SAFTA. Similarly, a Working Group
has been established to consider reduction in the Sensitive Lists under SAFTA.
SAFTA Ministerial Council of SAARC Commerce Ministers is the highest decision-making
body on SAFTA matters, which reviews matters relating to trade facilitation in the SAARC
Member States.

Thank you !

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