South Asia Preferential Trading Agreement 1993
Table of Contents
In December 1991, while attending the sixth Summit, Sri Lanka was the first to advocate for the expansion of trade by establishing a trade framework between member states of the South Asian Association for Regional Co-operation (SAARC). This led to the consensus that an agreement should be created, birthing the SAARC Preferential Trading Agreement (SAPTA) 1993.
In April 1993, the SAARC member states ratified the agreement to solidify economic cooperation and furtherance of trade within the SAARC region. The SAPTA is recognised as the first step toward establishing a free trade area and subsequently a Customs Union. The SAPTA come into force nearly two years later on 7th December 1995. Pakistan signed the agreement in 1993 in Dhaka.
The SAPTA’s true objection remains to be the promotion and expansion of trade which could act as a stimulus for economic development and in turn higher living standards through the exchange of trade concessions. The SAPTA’s provisions promote overall reciprocity and mutual assistance with organised procedures for negotiations and periodic reviews to facilitate implementation.
The SAPTA comprises of 25 articles that establish the following obligations for member states:
- Negotiations may be conducted while keeping in mind one or a few of these: product by product basis, across-the-board tariff reductions, sectoral basis, and direct trade measures.
- Adoption of measures to enhance mutual cooperation and fulfill SAPTA goals.
- Special treatment to least developed contracting states with regards to technical assistance, duty-free access, exclusive tariff preferences, and where relevant, para-tariff barriers and greater flexibility in relation to quantitative restrictions implemented by them.
- The tariff, para-tariff, and non-tariff concessions exchanged between states should be incorporated into the National Schedules of Concessions.
- A Committee of Participants (Committee), made up of member state representatives, was established to annually review the progress and enforcement of the SAPTA.
- Assent to and undertake relevant measures to accelerate and enhance communication systems, transport infrastructure, and transit facilities for the growth of trade.
- States faced with economic setbacks and problems are entitled to provisionally suspend the concessions as to the quality and value of imported products by informing other states.
- Any products which can cause or threaten to cause serious injury within the importing state can be suspended provisionally by informing the relevant states so they can mutually decide on a remedy. If the issue is not resolved within 90 days, the Committee shall come together to settle the issues. If they reach an amicable understanding within 60 days, the relevant parties are entitled to withdraw their obligations.
- Products listed in the National Schedules of Concessions are eligible for preferential treatment provided they comply with the rules of origin and special rules of origin.
- Concessions can be modified or withdrawn after three years by official notification to the Committee. The intending state can negotiate and consult its stance with the other state. If no consensus is reached within six months, the intending state can withdraw or modify concessions.
- Concessions can be withheld or withdrawn at any time, wholly or partly, with states that cease to be a part of SAPTA.
- Representations made by states shall be afforded adequate opportunities and sympathetic consideration. The Committee can request states to consult with each other to find solutions to problems.
- Disputes arising between states relating to the interpretation and application of SAPTA must be dealt with amicably. If this fails, the Committee can be called upon to intervene and the matter shall be reviewed within 120 days to resolve the issues.
- To withdraw from SAPTA, written notice must be served to the SAARC Secretariat and the withdrawal shall take effect six months later. The Committee should also be informed.
|Member State||Date of Ratification|
|Pakistan||11th April 1993|
|Bangladesh||11th April 1993|
|Bhutan||11th April 1993|
|India||11th April 1993|
|Maldives||11th April 1993|
|Nepal||11th April 1993|
|Sri Lanka||11th April 1993|
|Afghanistan (signed SAFTA, not SAPTA)||6th January 2004|