NOTE BY THE SECRETARIAT
ON ECONOMIC AND FINANCIAL COOPERATION
(as on 22 January 2015)
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 South Asian
Free Trade Area (SAFTA) to South Asian Economic Union (SAEU).
1.
The Seventeenth SAARC Summit (Addu, Maldives, 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 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 achieved in areas such as SAFTA, SAARC Agreement on Trade in
Services (SATIS), trade facilitation measures, harmonization of customs procedures and
standards, elimination of non-tariff and para-tariff barriers to trade, increasing cooperation in
the field of finance and planned pursuit of SAEU. The Regional Economic Integration Study
(Phase-II) has been completed with the assistance of Asian Development Bank (ADB) and
was released during the Thirty-sixth Session of Council of Ministers.
2.
At their Eighteenth SAARC Summit held in Kathmandu on 26-27 November 2014),
the Heads of State or Government expressed their strong determination to deepen regional
integration for peace, stability and prosperity in South Asia by intensifying cooperation, inter
alia, in trade, investment, finance, energy, security, infrastructure, connectivity and culture;
and implementing projects, programmes and activities in a prioritized, result-oriented and
time-bound manner. The Leaders renewed their commitment to achieve South Asian
Economic Union (SAEU) in a phased and planned manner through a Free Trade Area, a
Customs Union, a Common Market, and a Common Economic and Monetary Union. They
acknowledged that SAARC Member States, particularly the Least Developed and
Landlocked Member States, face structural constraints and challenges that result in their
weak productive capacity affecting their competitiveness in external trade due to, among
others, high trade and transit cost. They committed to enhance support to the Least
Developed and Landlocked Member States in their development efforts, with a view to
ensuring equitable benefits of free trade arrangements. In this context, they agreed to
effectively implement the existing preferential facilities under SAFTA and SATIS.
3.
The Eighteenth SAARC Summit directed SAFTA Ministerial Council and SAFTA
Committee of Experts to accelerate free trade in goods and services in the region putting into
operation simplified and transparent rules of origin; implementation of trade facilitation
measures; harmonization of standards relating to Technical Barriers to Trade (TBT) and
sanitary and phyto-sanitary measures; harmonized, streamlined and simplified customs
procedures; elimination of non-tariff and para-tariff barriers; and smooth and efficient transit
and transport facilities. They also called for early operationalization of SATIS by finalizing
the schedule of commitments.
As on 22 January 2015
4.
The Leaders called for timely and comprehensive reforms of the global economic and
financial architecture to make it inclusive and responsive to the needs of Least Developed,
Land-locked, and Small Island Developing States (SIDS).
5.
They reaffirmed that SIDS would require special attention in view of their unique
circumstances and particular vulnerabilities in realization of sustainable development.
SAARC Development Fund
6.
The Leaders agreed to strengthen the Social Window of the SAARC Development
Fund (SDF) and operationalize its Economic Window and Infrastructure Window at the
earliest for effective implementation of regional and sub-regional projects. In that context,
they stressed on expeditious development of projects under SDF addressing the livelihood
issues of the peoples of the region. They agreed to expand the Governing Board of SDF by
including a representative of the National Focal Point of the Member States.
Connectivity
7.
The Heads of State or Government welcomed the significant progress towards
finalization of the SAARC Motor Vehicles Agreement and SAARC Regional Railways
Agreement and agreed to hold a Meeting of the Transport Ministers within three months in
order to finalize the Agreements for approval. They renewed their commitment to
substantially enhance regional connectivity in a seamless manner through building and
upgrading roads, railways, waterways infrastructure, energy grids, communications and air
links to ensure smooth cross-border flow of goods, services, capital, technology and people.
The leaders emphasized the need for linking South Asia with contiguous regions, including
Central Asia, and beyond by all modes of connectivity and directed relevant authorities to
initiate national, regional and sub regional measures and necessary arrangements.
Committee on Economic Cooperation
8.
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 of CEC (Maldives, 15-16 July 2012), inter-alia,
reviewed the progress in the implementation of decisions relating to Trade Liberalisation
Programme under SAFTA. It also deliberated on matters relating to Least Developed
Countries and made recommendations for developing a road map for a long term vision of
regional economic integration and for its transition towards SAEU. SCCI made a presentation
giving the perspective of the private sector for promotion of intra-SAARC trade and economic
cooperation.
9.
The Sixteenth Meeting of the Committee on Economic Cooperation will be hosted by
Nepal in 2015.
Agreement on South Asian Free Trade Area (SAFTA)
10.
The SAFTA Agreement, signed in 2004, entered into force on 1 January 2006 and the
Trade Liberalization Programme commenced from 1 July 2006.
2
As on 22 January 2015
11.
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, three Meetings of SCOE and three Meetings of SMC have
been held, the last being in July 2014 in Thimphu, Bhutan. A Special Meeting of SCOE 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.
12.
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)
Period
Afghanistan
July 2006 - December 2006
January 2007 - June 2007
July 2007 - December 2007
January 2008 - June 2008
July 2008 - December 2008
January 2009 - June 2009
July 2009 - December 2009
January 2010 - June 2010
July 2010 - December 2010
January 2011- June 2011
July 2011 - December 2011
Jan 2012 - June 2012
July 2012 - December 2012
Jan 2013 - June 2013
Total
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
14,770,442.10
0.00
56,287,131.46
71,057,573.56
Bangladesh
0.00
4,423,071.02
10,850,106.82
54,139,271.71
44,177,691.45
72,165,917.02
127,620,537.70
86,226,413.91
150,485,087.33
172,182,455.94
257,998,074.73
220,756,619.28
142,930,849.58
1,343,956,096.49
India
Maldives
0.00 14,001.15
0.00
0.00
3,783,410.31
0.00
6,900,229.05
0.00
2,084,191.63
0.00
31,582,775.91
0.00
283,673,960.43
0.00
276,933,455.74
0.00
92,737,597.06
0.00
175,773,868.15
0.00
112,036,594.23
0.00
342,980,545.04
1,328,486,627.55 14,001.15
Pakistan
Sri Lanka
55,324.00
212,053.65
364,111.34
2,412,444.20
29,384,274.31
14,059,934.17
29,450,050.73
18,856,722.06
37,262,285.53
19,451,567.80
23,723,411.03
0.00
0.00
19,828.02
7,098.50
33,690.72
176,452.56
432,171.40
442,934.00
74,632.00
74,609.00
27,784.00
147,348.00
96,988.00
1,021,106.26
2,554,642.46
0.00
175,232,178.82
US Dollars
Total
69,325.15
4,635,124.67
15,017,456.49
63,459,043.46
75,679,848.11
117,985,079.66
441,176,720.26
382,459,525.71
280,559,601.92
382,252,942.99
135,787,789.26
657,413,099.23
220,853,607.28
143,951,955.84
2,921,301,120.03
Note: No Exports under SAFTA from Bhutan and Nepal
13.
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
SCOE 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.
14.
The Standing Committee at its Forty-first Session held in Kathmandu on 23-24
November 2014:
a. approved that a Special Meeting of SAFTA Committee of Experts be held after
the Eighteenth SAARC Summit to consider matters relating to proposal of
Bhutan, India, Maldives and Pakistan for further tariff liberalization and
reduction in the sensitive lists;
b. urged the importance of circulation of Request Lists and Offer Lists for
reduction in the Sensitive Lists under SAFTA (Phase-III) at the earliest so that
the Secretariat may reschedule the Third Meeting of Working Group on
Reduction in the Sensitive Lists under SAFTA (Phase-III) immediately on
receipt of copies of Request Lists/Offer Lists from all Member States;
3
As on 22 January 2015
c. agreed that for accelerated movement towards South Asian Economic Union
(SAEU), the SAFTA Committee of Experts may consider the recommendations
contained in the Second Phase Study on Regional Economic Integration with
regard to (i) enhancement of intra-SAARC trade under SAFTA by, inter-alia,
bringing trade outside SAFTA within the ambit of SAFTA and by making
SAFTA Rules of Origin more attractive than those prevailing in the bilateral
free trade agreements entered into between some of the Member States; (ii)
removal/reduction of NTMs/PTMs; and (iii) reduction in the Sensitive Lists
under SAFTA (Phase-III);
d. noted with appreciation that the Phase-II reduction in the Sensitive Lists has
been implemented by all Member States; and
e. noted with concern that most of the Member States are not ready with their
Final Offer Lists under SAARC Agreement on Trade in Services (SATIS) and,
therefore, urged that this may be done at the earliest so that the Eleventh
Meeting of the Expert Group on SAARC Agreement on Trade in Services may
be scheduled by the SAARC Secretariat for finalizing, signing and exchanging
the Schedules of Specific Commitments under SATIS.
15.
The Consultant who conducted the second phase of the Study on Economic
Integration also examined the reasons for trade under SAFTA being lower than trade outside
SAFTA and suggested ways and means for bringing trade taking place among the Member
States outside SAFTA within the ambit of SAFTA.
16.
The first draft of the Regional Economic Integration Study (Second Phase) was
presented at a Workshop held in Bhutan on 21 July 2014 back-to-back with the Ninth
Meeting of the SCOE.
17.
The Forty-first Session of Standing Committee considered and approved the Report of
SAARC-ADB Workshop on Regional Economic Integration Study (Phase-II) held in
Thimphu on 21 July, 2014). It also considered and approved the First Draft of Regional Study
on Regional Economic Integration (Phase-II) concluded with the financial and technical
assistance of Asian Development Bank. It recommended that a Special Meeting of
representatives of Commerce and Finance Ministries may be held in the first quarter of 2015
to prioritize the recommendations contained in the Study for implementation. It welcomed
the launching of the Study during the Opening Session of the Council of Ministers to be held
in Kathmandu on 25 November 2014. It noted with appreciation that the SAARC Secretariat
has been able to bring out the Second Phase of Regional Economic Integration Study in a
timely manner and underlined the need for early implementation of the prioritized
recommendations.
18.
The Special Meeting of representatives of Commerce and Finance Ministries is now
scheduled to be held in India on 14-15 April 2015 with the support of ADB to prioritize the
recommendations contained in the Regional Economic Integration Study (Phase-II).
4
As on 22 January 2015
19.
The status of issuance of TLP Notification by the Member States is given below:
Member
Status of TLP Customs Notification
State
Afghanistan TLP commenced w.e.f. 7 August 2011
TLP Notification issued till the end of 2021
Bangladesh TLP Notification issued for 2013
Action taken till the end of TLP
Bhutan
(vide notification No. MOF/TIS/SAC/58 dated 29 June
2006)
Customs Notifications No. 68/2012 dated 31 December
India
2012 concerning customs duty to be charged under
SAFTA with effect from 1 January 2013.
Notification containing SAFTA Customs Duty Rates
Maldives
for the year 2014 would be provided to the SAARC
Secretariat by 30 August 2014.
TLP Notification issued for the financial year 2013-14
Nepal
TLP Notification issued till the end of 2013-2014.
Pakistan
(vide SRO 1073(I)/2013 dated 27 December 2013).
National Imports Tariff Guide 2014 indicates SAFTA
Sri Lanka
Rates for 2014.
20.
India completed its TLP one year ahead of the schedule by reducing its tariff to 0%
for LDCs under SAFTA with effect from 1 January 2008. 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.
21.
The Standing Committee at its Forty-first Session approved that a Special Meeting of
SAFTA Committee of Experts be held after the Eighteenth SAARC Summit to consider
matters relating to proposal of Bhutan, India, Maldives and Pakistan for further tariff
liberalization and reduction in the sensitive lists.
22.
SAARC Chamber of Commerce and Industry (SCCI) represents the private sector in
Meetings of SCOE and is given an opportunity to make presentation and put forward their
views.
Removal of Non-Tariff and Para-tariff Barriers
23.
The SCOE at its First Meeting set up a Sub-Group on Non-Tariff Measures (NTMs)
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 SCOE.
24.
A Special Meeting of the SCOE 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. SCCI made a presentation on “Non-Tariff Barriers in
South Asia : The Challenges and Way Forward”.
5
As on 22 January 2015
25.
The Special Meeting of the SCOE 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 the following 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.
26.
The Eighth Meeting of the SCOE (Colombo, 21-22 August 2013) agreed that a
Consultant may be appointed. 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 Meeting 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 to the Secretariat.
27.
The Consultant who conducted the Second Phase of Study on Regional Economic
Integration examined all issues relating to NTMs/PTMs. The SAARC-Trade Promotion
Network (TPN), comprising twenty-eight public and private sector organisations in eight
Member States, has also brought out a detailed study on NTMs which was presented to the
Ninth Meeting of SCOE (Thimphu, 22-23 July 2014). The TPN is in the process of setting up
NTM desks in National Chambers of Commerce and Industry in all capitals with financial
support of GIZ.
Further Reduction in the Sensitive Lists under SAFTA
28.
The Sixth Meeting of the SMC (Islamabad, 16 February 2012) established a Working
Group to further reduce the number of products in the Sensitive Lists under SAFTA. In its
Second Meeting (SAARC Secretariat, 30 July 2013), the Working Group on Reduction in the
Sensitive Lists under SAFTA (Phase-III) reviewed the progress of implementation of
decisions relating to reduction in the Sensitive Lists as agreed during Phase-II. The current
status of the number of products covered in the Sensitive Lists of Member States before and
after the 20% or more reduction is as given below:
Member
State
Number of
Products in
the original
Sensitive Lists
(1)
(2)
Afghanistan 1072
Bangladesh 1233 (LDCs)
1241 (NLDCs)
Bhutan
150
India
480 (LDCs)
868 (NLDCs)
Number of
Products in the
Revised Sensitive
Lists (Phase-II)
(3)
850
987 (LDCs)
993 (NLDCs)
156
25 (LDCs)
614 (NLDCs)
6
Status of Receipt of
Revised Sensitive
Lists as per HS2012
(4)
Not received
Received
Received
Received
As on 22 January 2015
Maldives
681
154
Nepal
1257 (LDCs)
1295 (NLDCs)
1169
1042
998 (LDCs)
1036 (NLDCs)
936
837 (LDCs)
963 (NLDCs)
Pakistan
Sri Lanka
Received
Not received
Received
Received
29.
The Phase-II reduction in the Sensitive Lists has already been implemented by all
Member States.
30.
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.
31.
The Ninth Meeting of the SAFTA Committee of Experts (Thimphu, 22-23 July 2014)
recommended the following:
f. A Special Meeting of SCOE may be held after the Eighteenth SAARC Summit
to consider matters relating to proposal of Bhutan, India, Maldives and Pakistan
for further tariff liberalization and reduction in the sensitive lists.
g. The SAARC Secretariat to circulate all the Revised Sensitive Lists of Phase-II
as per HS-2012 among all Member States and also to upload on its website;
h. Member States to circulate their Request Lists by 15 September 2014;
i. Member States may send their Offer Lists within two months of receipt of
Request Lists from other Member States;
j. Member States, which have not done so to convert their Revised Sensitive Lists
from HS 2007 into HS 2012 by 15 August 2014;
k. SAARC Secretariat to reschedule the Third Meeting of Working Group on
Reduction in the Sensitive Lists under SAFTA (Phase-III) immediately on
receipt of copies of Request Lists/Offer Lists from all Member States.
32.
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 (SATIS)
33.
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 an
early conclusion of negotiations on the schedules of specific commitments under the
7
As on 22 January 2015
Agreement. The Agreement has been ratified by all Member States and has entered into
force on 29 November 2012. So far, ten Meetings of the Expert Group on SATIS have been
held and it has been agreed that at the Eleventh Meeting, all Member States would table their
final offer lists and the Schedules of Specific Commitments will also be finalised and
adopted.
34.
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).
35.
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 such as Tourism, Construction, Health, Education, Power and
Telecommunication for circulation to the Member States.
36.
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.
37.
The Ninth Meeting of the SCOE noted that so far only Bangladesh, Bhutan and India
are ready with their Final Offer List. It, therefore, urged the remaining Member States to
submit their Final Offer Lists by 31 December 2014. So far, ten Meetings of the Expert
Group on SATIS have been held and it has been agreed that at the 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 on SATIS will
be held only after getting confirmation from all Member States that they are ready with their
Final Offer Lists.
Harmonisation of Standards
38.
The Agreement on the Establishment of South Asian Regional Standards Organisation
(SARSO) entered into force on 25 August 2011 after ratification by all Member States. The
SAARC Agreement on Multilateral Arrangement on Recognition of Conformity Assessment;
and the SAARC Agreement on Implementation of the Regional Standards were signed during
the Seventeenth SAARC Summit. The Agreements have so far been ratified by Bangladesh,
Bhutan, India, Pakistan and Sri Lanka.
39.
SARSO, a SAARC Specialized Body, became operational in Dhaka with effect from
3 April 2014. A decision to this effect was taken by the Second Meeting of Governing Board
of SARSO (Dhaka, 2-3 April 2014). The Governing Board appointed Dr. Syed Humayun
Kabir as the first Director General of SARSO for a period of three years.
8
As on 22 January 2015
40.
Dr. Syed Humayun Kabir, Director-General of SARSO made a presentation on the
activities of SARSO during the Forty-first Session of Standing Committee held in
Kathmandu on 23-24 November 2014. The Standing Committee also took note of the critical
importance of SARSO in eliminating all forms of barriers to regional trade and urged for all
possible support from all Member States for effective functioning of the Organization.
41.
The following is the current status of harmonisation of identified products by the
respective Sectoral Technical Committees under SARSO:
SARSO Sectoral Technical
Committees (STCs)
STC
on
Food
and
Agricultural Products
Identified Products on which standards
are being harmonised
1. Refined Sugar
2. Biscuits
3. Standards of on Microbiological requirements
for cream portion of filled biscuits
4. Instant Noodles
5. Black tea
6. Vanaspati/Banaspati (veg. ghee)
7. Skimmed Milk Powder
8. National/CODEX Standard for Hygienic
condition
STC on Jute, Textile and
Leather
1. Identified Hessian products
2. Jute Tarpaulin Fabric
2. Jute Bags for packing of various
commodities
3. Jute twine
4. Jute Carpet backing Fabric
5. Jute yarn
6. Cotton Drill Fabric
7. Cotton Twill Fabric
8. Towels and Toweling Fabric
STC on Building Materials
1. Steel Tube for Structural purposes
2. Ordinary Portland Cement
3. Steel Bars for Concrete Reinforcement
4. Structural Steel
5. High strength deformed steel bars and wires
for concrete reinforcement
6. Steel wires used in pre-stressed concrete
7. Method of testing of steel and steel tubes
(such as tensile testing, flattening, bend test etc
8. Ceramic Tiles
1. Toilet soap
2. Liquid Toilet Soap
3. Baby Toilet Soap
4. Soft Soap
5. Laundry Soap
6. Detergent Powder
7. Tooth Paste
8. Shampoo (Hair Shampoo)
9. Shampoo for Babies
Three Meetings have been
held at the SAARC
Secretariat on
21-22 November 2011;
10-11 July 2012;
4-5 June 2013.
Fourth Meeting is to be
hosted by Nepal.
1. Electric cable (PVC insulated/sheathed)
First Meeting was held in
STC on Chemicals
Chemical Products
STC
on
and
Electrical,
9
Meetings held/to be held
First Meeting at SAARC
Secretariat on 24 August
2011
Second Meeting at Dhaka,
Bangladesh on 12-13
December 2011.
Third Meeting at Karachi,
Pakistan on 2-3 April
2012.
Fourth Meeting was held
in India on 21-22 Sept
2014.
Fifth Meeting is to be held
in Sri Lanka.
First Meeting at the
SAARC
Secretariat,
Kathmandu on 23-24
November 2011
Second Meeting in Dhaka
on 17-18 April 2013.
Third Meeting was held in
Colombo on 18-19 Dec
2013.
Fourth Meeting is to be
held in India.
First Meeting was held in
India on 23-24 Sept 2014.
Second Meeting is to be
hosted by Sri Lanka
As on 22 January 2015
Electronics, Telecom and IT
2. Double capped fluorescent Lamp (Safety
Requirements and Performance Requirements)
3. New Products Identified: Switches, Sockets,
MCBs, Solar photovoltaic systems, transformers
Conformity Established by the First Meeting of the SARSO
Technical Management Board (Dhaka, 31 March
– 1 April 2014)
India on 25-26 Sept 2014
Second Meeting is to be
hosted by Afghanistan.
STC
on
Assessment
First Meeting is to be held
in India.
42.
Three Meetings of SAARC Expert Group on Accreditation (SEGA) have been held
in Maldives, Nepal and Pakistan with the financial and technical assistance of the German
National Institute of Metrology (PTB) under the MOU signed in 2003. The PTB has been
extending cooperation in helping Member States in the field of quality infrastructure which
include metrology, standardization, testing, certification and accreditation. The Meetings of
SEGA are followed by National Awareness Workshops on Accreditation.
43.
The Third Meeting of the Governing Board of SARSO was held in Dhaka on 19-20
December 2014 preceded by the Second Meeting of SARSO Technical Management Board.
The Third Meeting of the Governing Board:
i.
ii.
iii.
iv.
v.
approved the Report of the Second Meeting of the SARSO Technical
Management Board held in Dhaka on 18 December 2014;
noted with appreciation that the Draft SAARC Standards for Biscuits and
Refined Sugar have been finalised by the Sectoral Technical Committee on
Food and Agricultural Products for adoption by the Governing Board;
approved the Report of the Third Meeting of SAARC Expert Group on
Accreditation (SEGA) held in Lahore, Pakistan on 2-3 September 2014;
noted with appreciation the offer of PTB to hold a two-day SAARC-PTB
Brainstorming Workshop in Dhaka in march/April 2015 for strengthening the
functioning of SARSO Secretariat; and
considered the Institutional Cost Budget prepared by the Director-General of
SARSO for the year 2015. The amended budget endorsed by the Governing
Board and recommended for approval through circulation by the Member
States.
Matters relating to cooperation in the field of Customs
44.
The Ninth Meeting of the SAARC Sub-Group on Customs Cooperation (Colombo,
20-21 June 2013) 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 2015, preceded by a
Training Programme on Customs Enforcement Matters.
10
As on 22 January 2015
45.
As a part of capacity building of relevant officials of Customs Departments of
Member States, a Training Programme on Customs Matters (Colombo, 18-19 June 2013)
preceding the Ninth Meeting of the Sub-Group on Customs Cooperation, was conducted on
the topic of Application of General Interpretative Rules (GIRs) in Commodity Classification
and Amendments in HS 2012.
Cooperation in the field of Statistics
46.
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 six Meetings of Heads of SAARC Statistical Organisations have been held
with a view to finalize 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.
47.
The Meetings of 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.
48.
As mandated by the Thirty-eighth Session of the Standing Committee, a Study for
development of web-based, user-protected interface and institution of a designated Statistics
Cell in the SAARC Secretariat was finalized with the financial and technical assistance of
ADB.
49.
The Consultant appointed for SAARCSTAT Study completed the second phase of the
work relating to SAARCSTAT Web Portal Development with the assistance of ADB as per
the recommendations contained in his earlier Study which have been approved by the Fifth
Meeting of SAARCSTAT (Maldives, 4-5 November 2012). The SAARCSTAT Web Portal
was launched during the Sixth Meeting of SAARCSTAT (Kathmandu, 12-13 June 2014).
50.
The Standing Committee at its Forty-first Session held in Kathmandu on 23-24
November 2014 considered and approved the Report of the Sixth Meeting of Heads of
SAARC Statistical Organizations (SAARCSTAT) held in Kathmandu, 12-13 June 2014. It
noted with appreciation that for expansion of cooperation in the field of statistics (i) a Study
on SAARCSTAT Website has been completed by Consultant Dr. S.K. Nath with financial
and technical assistance of Asian Development Bank and that the Website is being hosted and
updated by Pakistan with inputs from all Member States; (ii) SAARC Statistical Yearbook
2012 has been published by Bangladesh; (iii) a Leaflet “SAARC in Figures” has been
published by Nepal; and (v) Directories of Statistical Publications and Statistical Experts
have been compiled and published by the Maldives.
51.
The Seventh Meeting of SAARCSTAT will be held in Sri Lanka in 2015.
SAARC Arbitration Council (SARCO)
11
As on 22 January 2015
52.
The Agreement for Establishment of SAARC Arbitration Council was signed during
the Thirteenth SAARC Summit (Dhaka, 12-13 November 2005).
53.
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. Five Meetings of the Governing Board of SARCO have been held so far.
SARCO is in the process of finalising the panel of arbitrators.
54.
As per Article II of the Agreement for Establishment of SAARC Arbitration Council,
its objectives and functions are as follows:
(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;
promote the growth and effective functioning of national arbitration
institutions within the region;
provide fair, inexpensive and expeditious arbitration in the region;
(b)
(c)
(d)
(e)
(f)
(g)
promote international conciliation and arbitration in the region;
provide facilities for conciliation and arbitration;
act as a co-ordinating agency in the SAARC dispute resolution system;
coordinate the activities of and assist existing institutions concerned with
arbitration, particularly those in the region;
render assistance in the conduct of ad hoc arbitration proceedings;
assist in the enforcement of arbitral awards;
maintain registers/panels of:
(i)
expert witnesses, and
(ii)
suitably qualified persons to act as arbitrators as and when required;
and
carry out such other activities as are conducive or incidental to its functions.
(h)
(i)
(j)
(k)
55.
Mr. Thusantha Wijemanna from Sri Lanka joined SARCO as the second DirectorGeneral with effect from 13 October 2014.
SAARC Trade Fairs
56.
The details of dates and venues of the SAARC Trade Fairs held so far are given
below: 1.
2.
3.
4.
5.
6.
7.
8.
9.
First SAARC Trade Fair
Second SAARC Trade Fair
Third SAARC Trade Fair
Fourth SAARC Trade Fair
Fifth SAARC Trade Fair
Sixth SAARC Trade Fair
Seventh SAARC Trade Fair
Eighth SAARC Trade Fair
Ninth SAARC Trade Fair
New Delhi, 9-14 January 1996
Colombo, 8-15 September 1998
Karachi, 21-26 April 2001
Kathmandu, 25-29 October 2002
Dhaka, 27-31 December 2003
New Delhi, 6-10 January 2005
Karachi, 16-18 June 2006
Colombo, 28-31 August 2008
Thimphu, 11-14 September 2009
12
As on 22 January 2015
10.
11.
12.
Tenth SAARC Trade Fair
Eleventh SAARC Trade Fair
Twelfth SAARC Trade Fair
Kathmandu, 15-19 December 2010
Dhaka, 30 March – 1 April 2012
Venue to be decided
57.
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.
58.
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.
59.
The venue for holding the Twelfth SAARC Trade Fair is yet to be determined.
Cooperation in the field of Finance
60.
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.
61.
The Seventeenth SAARC Summit (Addu, Maldives, 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
IGEG on Financial Issues may first look into the matter and make suggestions to be
considered by the higher SAARC bodies. Bangladesh circulated a paper on “Economic
Integration in the SAARC Region: Towards South Asian Economic Union (SAEU)” for
consideration of Member States.
62.
Following the Thirteenth Summit directive, the Informal Meetings of the SAARC
Finance Ministers are being held on the sidelines of ADB Governing Board Meetings. A
theme for the meeting is usually suggested by the SAARC Chair and a draft agenda is then
circulated by the Secretariat. The Ninth Informal Meeting of SAARC Finance Ministers is
scheduled to be held in Baku, Azerbaijan on 3 May 2015 on the sidelines of Annual Meeting
of ADB. The proposed theme for the Ninth Meeting is “Towards South Asian Economic
Union: Implications for SAARC Financial Cooperation”.
63.
The Sixth Meeting of the IGEG (SAARC Secretariat, 23-24 April 2013) examined the
SAARC Study on ‘Regional Economic Integration in SAARC, its current extent and
recommendations for further deepening’. It also 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
13
As on 22 January 2015
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. The Third Meeting is scheduled to be held in Kabul
in 2015.
64.
The Meeting also agreed to discuss the best practices in the following sectors during
the next Meeting of IGEG:
Best Practices
Inter-connectedness of financial market
infrastructure and its regulation
Integrated risk management framework for
financial management
Financial safety net: deposit insurance
Bankruptcy legislation
Ease of doing business
Role of Remittances in economic and
financial development
Islamic Finance
Paper by
Bangladesh
Pakistan
Bhutan
India
Sri Lanka
Nepal
Maldives
65.
The Seventh Meeting of the IGEG (SAARC Secretariat, 20-21 May 2014) reviewed
the progress on above areas.
66.
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 ADB.
67.
The Fifth Meeting of SAARC Finance Ministers (Dhaka, 30 January 2012) agreed
that the region should evolve joint strategies for facing the impact of global economic crisis
in a spirit of mutual cooperation. 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. Acordingly, a Study is
being conducted with the help of ADB. An Inception Workshop for the Study (SAARC
Secretariat, 3-4 October 2013) 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.
68.
The Sixth Meeting of SAARC Finance Ministers was held in Colombo on 30 August
2013 under the chairmanship of Dr. Sarath Amunugama, Senior Minister of International
Monetary Co-operation and Deputy Minister of Finance & Planning. He emphasised on
accelerating the pace of economic and financial cooperation among the Member States of
SAARC. The Finance Ministers highlighted the following points during the Meeting:
a. endorsed the action plans enumerated in the SAARC Finance Secretaries’
Meeting;
14
As on 22 January 2015
b. most of the Member Countries have managed crisis situations well, the strong
indicators being reduction in fiscal deficit, reduction in the level of poverty;
c. appreciated the SWAP arrangement for currency put in place by India and noted
that Bhutan has already signed an MOU with Reserve Bank of India for US$ 100
million under the arrangement;
d. private sector may be involved more and more in the economic and financial
integration in SAARC, as their role becomes critical in the success of SAFTA
process;
e. sub-regional cooperation such as SASEC in which ADB is involved has done
good work and such cooperation may be encouraged;
f. NTMs/PTMs acting as NTBs/PTBs must be addressed; and
g. infrastructural development, such as Railways and motor ways and energy grid are
important for facilitating regional economic and financial integration.
69.
The Seventh Meeting of SAARC Finance Ministers is scheduled to be held in Nepal
in 2015.
Draft SAARC Agreement on Promotion and Protection of Investments
70.
The Eighth Meeting of SAARC Sub-Group on Investment and Arbitration (SAARC
Secretariat, 7-8 August 2014) agreed that the Agreement to be signed by the SAARC
Member States should take into account their national interests and therefore the Preamble
and other Articles which were formulated during 2005 – 2007 should be examined afresh due
to changes in the jurisprudence and experiences gained by the Member States during the last
seven years. The Ninth Meeting of the Sub-Group will be scheduled after circulation of a
revised Draft Agreement by India. The Standing Committee at its Forty-first Session
(Kathmandu, 23-24 November 2014) urged early finalization of the text of the Draft SAARC
Agreement on Promotion and Protection of Investments.
Avoidance of Double Taxation
71.
The SAARC Limited Multilateral Agreement on Avoidance of Double Taxation and
Mutual Administrative Assistance in Tax Matters was signed during the Thirteenth SAARC
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.
72.
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:
15
As on 22 January 2015
a.
b.
c.
d.
e.
Seminar/Training Programme on Automation and System Management (held
at NADT, Nagpur, India on 11-14 July 2011)
Seminar/Training Programme on Corporate Taxation Issues (held in Colombo
on 20-23 February 2012)
Seminar/Training Programme on Tax Payers Services (held in Nepal on 27-30
November 2012)
Seminar/Training Programme on International Taxation and Transfer Pricing
(held at NADT, Nagpur, India on 4-7 March 2014)
Seminar/Training Programme on Exchange of Programme and Large Tax
Payers Units (Lahore, Pakistan, 7-11 April 2014)
73.
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.
74.
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.
75.
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
Seminar/Training Programme on International Taxation and Transfer Pricing in
February/March 2014 at National Academy of Direct Taxes (NADT), Nagpur, respectively.
76.
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.
77.
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
16
As on 22 January 2015
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.
78.
The Standing Committee at its Forty-first Session (Kathmandu, 23-24 December
2014) considered and approved the Report of the Third Meeting of SAARC Competent
Authorities on Avoidance of Double Taxation and Mutual Administrative Assistance in Tax
Matters (Thimphu, 28-29 July 2014). It noted the non-participation of Afghanistan in all the
three Meetings of SAARC Competent Authorities held so far. As recommended in the Report
of SAARC Competent Authorities, the Committee emphasized that it is imperative that
Afghanistan provides critical inputs for incorporation in the SAARC Multilateral Limited
Agreement on Avoidance of Double Taxation and Mutual Administrative Assistance in Tax
Matters in order to become an effective party to the Agreement which involves certain
commitments, obligations, responsibilities and financial obligations to be fulfilled by all
parties to the Agreement.
79.
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
Taxation Issues in Digital Economy
Venue
India
Tax Treaty Negotiations and Application
Audit and Investigation of Multinational Enterprises
Automation and e-payment
Nepal
Pakistan
Sri Lanka
Tentative Schedule
First quarter of 2015
(now scheduled to be
held at NADT, Nagpur
on 17-20 March 2015)
April 2015
Oct 2014/Feb 2015
June 2015
80.
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
81.
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. The SAARCFINANCE also
undertakes exchange of views on the impact of current global financial crisis on individual
South Asian economies.
82.
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.
17
As on 22 January 2015
83.
The status report on the activities of SAARCFINANCE is presented by the Chair of
the SAARCFINANCE to the meetings of the SAARC Finance Ministers.
84.
During the Twenty-ninth Meeting of SAARCFINANCE (Washington, 9 October
2014) the Chairmanship of SAARCFINANCE was handed over by Nepal to Pakistan.
85.
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.
_____________
18