Economic Cooperation Organization

Table of Contents

Overview

The Economic Cooperation Organization (ECO) was first put in place and was initially named the Regional Cooperation for Development (RCD) in 1964 by Pakistan, Iran, and Turkey. The name changed to ECO in 1985. RCD was converted to ECO when those members who were originally part of the RCD met in Islamabad in 1990, in order to make improvements to the Treaty of Izmir. The ECO’s headquarters is located in Tehran, Iran, its scientific bureau in Pakistan, its economic bureau in Turkey, and its cultural department in Iran.

ECO was established to promote cultural, economic, and technical cooperation amongst the member states, and in 1992, Afghanistan, Uzbekistan, Azerbaijan, Kyrgyzstan, Kazakhstan, Turkmenistan and Tajikistan also became members of ECO. The geostrategic orientation of ECO allows it collectively, and its members individually, to have a substantial connection between this regional group to other international and regional economic groups.

Objectives of ECO

ECO’s objectives are extensive. Some of them include utilizing and mobilizing the resources of member states, as well as effectively utilizing the industrial and agricultural opportunities present in the member states. Furthermore, it aims for regional cooperation for environmental protection and drug abuse control as well as cooperation with international and regional organizations.

Other objectives include the removal of trade barriers, sustainable economic development in the member states, and development of transport and infrastructure which aids in communication within the member states, so as to help them stay linked with other states. ECO also aims to promote intra-regional trade.

ECO and Pakistan

Pakistan was one of the founding members of ECO. Through ECO, Pakistan can connect more closely with South Asian and Central Asian states. Pakistan, which is a member of the South Asian Association for Regional Cooperation (SAARC) along with Afghanistan, has connected the region of ECO to South Asia. Furthermore, Pakistan is the only country that provides a natural route to the sea for member states.

Pakistan is a party to many agreements under the ECO that benefit it. It is a part of the ECO Chamber of Commerce and Industry which was established in 1993, which aims to enhance economic cooperation and improve relations in regard to trade, agriculture, tourism, engineering, contracting, industry, and banking sectors amongst the member states. In 1995, the ECO Reinsurance company was also set up by Turkey, Iran, and Pakistan to supplement the reinsurance services which were already present within the region, minimize the outflow of foreign exchange, maintain the economic development in the region, and increase the capacities of retention and national underwriting.

The ECO Consultancy and Engineering company was also made which aids in development projects which are sponsored by ECO member states. Pakistan is also part of the Economic Cooperation Organization Trade and Development Bank (ETDB), which was founded in 2005, as well as the ECO Science Foundation which promotes technology and scientific research in the member states.

In 2003, the ECO Trade Agreement (ECOTA) was signed and has been ratified by Pakistan. Its purpose is to eliminate non-tariff barriers and also to remove tariffs in the region over time.

ECOTA has however been criticized. The interpretation of Article 4 of the agreement has been subject to dispute amongst parties. For instance, Turkey interpreted the article to mean that since its most favorable nation (MFN) tariff on more than 80pc tariff lines was below 15pc, it could include these products in the positive list, while Pakistan stated that 80pc of only those products can be incorporated in the positive list which have a tariff of more than 5pc.

It is important to note that ECO is important for Pakistan because India has formed a mini-SAARC comprising of Bangladesh, Bhutan, India, and Nepal (BBIN) in 2017. A Summit of ECO took place on 1st March 2017 in Islamabad. It provided Pakistan with the chance of mending its relations with Iran, which were affected due to Pakistan’s ties with Saudi Arabia, Iran’s regional competitor, and also due to the fact that the last visit of the President of Iran was negatively impacted due to the arrest of an alleged RAW official. At the Summit, the President of Iran voiced that there should be solidarity from the ECO members regarding the matter of travel restrictions and sanctions in some states.

ECO has not been able to fully increase regional trade. Pakistan’s trade with ECO constitutes only 3% of its total trade.

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