{"id":49495,"date":"2022-09-29T18:15:32","date_gmt":"2022-09-29T12:45:32","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=49495"},"modified":"2022-09-29T18:15:34","modified_gmt":"2022-09-29T12:45:34","slug":"what-are-the-core-objectives-of-safta","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/what-are-the-core-objectives-of-safta\/","title":{"rendered":"What are the Core Objectives of SAFTA?"},"content":{"rendered":"\n<p>The South Asia Free Trade Area, also known as SAFTA Agreement, was signed on 6 January 2004 at the 12th<strong> SAARC<\/strong><sup><a href=\"https:\/\/en.wikipedia.org\/wiki\/South_Asian_Association_for_Regional_Cooperation\"><strong>[1]<\/strong><\/a><\/sup> Summit in Pakistan (Islamabad). The treaty came into force on 1<sup>st<\/sup> January 2006 and will be fully implemented by 31<sup>st<\/sup> December 2015. <a href=\"https:\/\/corpbiz.io\/safta-license-certificate\"><strong>SAFTA<\/strong><\/a> is intended to strengthen intra-SAARC economic cooperation and maximise the region&#8217;s economic and social potential through various instruments of trade liberalisation. The agreement binds each contracting state to reduce tariffs by 0-5 % by 31<strong> <\/strong>December 2015. South Asian countries have been moving towards a SAFTA in recent years. SAFTA is considered the key to success to trade Liberalisation, economic growth, and welfare gains for the 7 countries in the South Asia region. Potential gains by SAFTA exist, but successful implementation &amp; significant welfare gains are unlikely to be achieved under this agreement. Here are many obstacles to the enforcement and implementation of SAFTA. Unresolved political tensions and low-income classes will likely derail much of the agreement&#8217;s progress. Countries of the region are encouraging unilateral &amp; bilateral liberalisations that may be more efficient and effective ways to achieve economic growth &amp; development among member countries. In this blog, we will discuss the Core Objectives of SAFTA.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/what-are-the-core-objectives-of-safta\/#Definitions_%E2%80%93_Objectives_of_SAFTA_Agreement\" >Definitions &#8211; Objectives of\nSAFTA Agreement<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/what-are-the-core-objectives-of-safta\/#Core_Objectives_of_SAFTA\" >Core Objectives of SAFTA<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/what-are-the-core-objectives-of-safta\/#Principles_of_SAFTA\" >Principles of SAFTA<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/what-are-the-core-objectives-of-safta\/#Analysing_the_Essential_Terms_Regarding_SAFTA\" >Analysing the Essential Terms\nRegarding SAFTA<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/corpbiz.io\/learning\/what-are-the-core-objectives-of-safta\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Definitions_%E2%80%93_Objectives_of_SAFTA_Agreement\"><\/span>Definitions &#8211; Objectives of\nSAFTA Agreement<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li><strong>Concessions<\/strong>\nmean tariff, para-tariff&nbsp; &amp;\nnon-tariff benefits agreed under the Trade Liberalisation Programme;<\/li><li><strong>Developed\nContracting State<\/strong> included a Contracting State that is designated as a\n&#8220;Least Developed Country&#8221; by the United Nations;<\/li><li><strong>Direct\nTrade Measures<\/strong> are conducive to promoting mutual trade of the Contracting\nStates like long &amp; medium-term contracts containing import and supply\ncommitments concerning specific products, buy-back arrangements, state trading\noperations, and government and public procurement.<\/li><li><strong>The\nmargin of Preference<\/strong> means a percentage of tariff by which tariffs are\nreduced on products imported from one Contracting State to another due to\npreferential treatment.<\/li><li><strong>Para-Tariffs<\/strong>\nmean border charges, other than &#8220;tariffs&#8221;, on foreign trade\ntransactions of a tariff-like effect that are levied solely on imports, but not\nthose charges and indirect taxes, which are levied in the same manner on like\ndomestic goods. Import charges corresponding to specific works rendered are not\nconsidered para-tariff measures;<\/li><li><strong>Non-Tariff\nMeasures<\/strong> include any regulation, measure, or practice other than\n&#8220;tariffs&#8221; and &#8220;Para tariffs&#8221;.<\/li><li><strong>SAPTA<\/strong>\nAgreement on SAARC Preferential Trading Arrangement signed in Dhaka on 11 April\n1993;<\/li><li><strong>Products <\/strong>mean\nall products, including manufacturers and commodities in their raw,\nsemi-processed and processed forms;<\/li><li><strong>Tariffs<\/strong>\nare customs duties included in the national tariff schedule of the Contracting\nStates;<\/li><li><strong>Serious\ninjury<\/strong> refers to a significant impairment of the domestic industry of\nlike\/directly competitive goods because of a surge in preferential imports,\ncausing losses in terms of production, earnings, or employment unsustainable in\nthe short term;<\/li><li><strong>The\nthreat of serious injury<\/strong> means a situation in which a substantial increase\nof preferential imports is likely to cause &#8220;serious injury&#8221; to\ndomestic producers and that such harm, although not yet existing, is imminent.\nA determination of the threat of serious injury will be based on facts and not\non mere allegation, remote, conjecture or hypothetical possibility.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Core_Objectives_of_SAFTA\"><\/span>Core Objectives of SAFTA<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The primary\nobjectives of SAFTA are to promote competition in the region while providing\nadvantages to the countries involved. The agreement will advantage the people\nof South Asia by bringing transparency &amp; integrity among the nations by\nreducing tariffs &amp; trade barriers. Ultimately it establishes a framework\nfor regional cooperation. The devices to help fulfil these objectives of SAFTA\nare as follows:<\/p>\n\n\n\n<ul><li>eliminating barriers to trading and facilitating\nthe cross-border movement of products between the territories of the\nContracting States;<\/li><li>Promoting conditions of genuine competition in\nthe free trade area &amp; ensuring equitable advantages to all Contracting\nStates, taking into account their respective pattern and levels of economic\ndevelopment;<\/li><li>Creating an effective mechanism for the\napplication and implementation &nbsp;of this\nagreement, for its joint administration and disputes resolution; and<\/li><li>Establishing a framework for regional\ncooperation to enhance &amp; expand the mutual advantages of this agreement.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Principles_of_SAFTA\"><\/span>Principles of SAFTA<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>SAFTA will be\ngoverned under the following principles:<\/p>\n\n\n\n<ol><li>SAFTA\nwill be controlled through the provisions of this agreement and also by the\nrules, regulations, understandings, decisions, and protocols to be agreed upon\nwithin its framework by the Contracting States;<\/li><li>SAFTA\nshall be applied on the principles of overall reciprocity and mutuality of\nadvantages in such a way as to benefit all Contracting States equitably, taking\ninto account their respective levels of economic &amp; industrial development,\nthe pattern of their external trade and tariff policies and systems;<\/li><li>The\nContracting States affirm their existing rights &amp; obligations concerning\nall others under Marrakesh Agreement Establishing the World Trade Organisation\nand other Treaties or Agreements to which the such Contracting States are\nsignatories;<\/li><li>SAFTA\nshall involve the free movement of products between countries through the\nelimination of tariffs, para tariffs, among other things, and non-tariff restrictions\non the direction of products and any other equivalent measures;<\/li><li>The\nspecial requirements of the Least Developed Contracting States will be\nrecognised through adopting concrete preferential measures in their favour on a\nnon-reciprocal basis; and <\/li><li>SAFTA\nwill entail the adoption of trade facilitation and other measures and the\nprogressive harmonisation of legislations through the Contracting States in the\nrelevant areas.<\/li><\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Analysing_the_Essential_Terms_Regarding_SAFTA\"><\/span>Analysing the Essential Terms\nRegarding SAFTA<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>It is called\ncreating the free trade area to enhance the signed member countries&#8217;\nrelationship and reduce customs duties.<\/p>\n\n\n\n<table class=\"table table-bordered\"><tbody><tr><td>\n  <strong>Factors<\/strong>\n  <\/td><td>\n  <strong>Description<\/strong>\n  <\/td><\/tr><tr><td>\n  <strong>Objective<\/strong>\n  <\/td><td>\n  The main objective is to enhance economic\n  cooperation for each member country by reducing customs duties to zero.\n  <\/td><\/tr><tr><td>\n  <strong>Basic principles<\/strong>\n  <\/td><td>\n  The discussion of the basic principles in the\n  matter of inclusion of all the commodities and the manufacturer&#8217;s products in\n  several forms such as processed forms, semi-processed forms and raw forms.\n  Non-negotiation tariffs have been improved and extended step by step. It is\n  reviewed periodically. \n  <\/td><\/tr><tr><td>\n  <strong>Trade\n  liberalisation program<\/strong>\n  <\/td><td>\n  As per this program, all the member countries need\n  to follow the tariff reduction schedule of the contrasting countries. Thus,\n  there must be a reduction of &#8220;20% in tariff by the non-least developed\n  countries and 30% reduction in the least developed countries.&#8221; \n  <\/td><\/tr><\/tbody><\/table>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The primary objectives of SAFTA are to benefit the small economies of countries like Bhutan, Maldives, and Bangladesh. It is still debatable whether SAFTA will achieve its porpuses or not. Potential gains from SAFTA exist, but successful implementation &amp; significant welfare gains are unlikely to be completed under this agreement. There are many obstacles to the implementation and enforcement of SAFTA. Unresolved political tensions &amp; low-income groups are likely to derail much of the agreement&#8217;s progress. <\/p>\n\n\n\n<p class=\"text-left\"><b>Read our Article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/how-to-get-safta-certificate-in-india\/\">How to Get SAFTA Certificate in India?<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The South Asia Free Trade Area, also known as SAFTA Agreement, was signed on 6 January 2004 at the 12th SAARC[1] Summit in Pakistan (Islamabad). The treaty came into force on 1st January 2006 and will be fully implemented by 31st December 2015. SAFTA is intended to strengthen intra-SAARC economic cooperation and maximise the region&#8217;s [&hellip;]<\/p>\n","protected":false},"author":42,"featured_media":49496,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[2749],"tags":[2755],"acf":{"service_id":"220"},"authorName":"Krishna Kumar","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2022\/07\/MicrosoftTeams-image-62.jpg","authorDescription":"Krishna Kumar has completed BA-LLB with a specialization in constitutional Laws from ICFAI University. As a recent graduate, He has both legal research and content writing experience in various law firms. He secures good drafting skills for various legal documents in multiple fields of law.","postViews":15216,"readingTime":4,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/49495"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/42"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=49495"}],"version-history":[{"count":7,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/49495\/revisions"}],"predecessor-version":[{"id":49504,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/49495\/revisions\/49504"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/49496"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=49495"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=49495"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=49495"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}