South Asia Free Trade Agreement

SAFTA

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The Agreement on the South Asian Free Trade Area is an agreement reached at the 12th South Asian Association for Regional Cooperation (SAARC) summit at Islamabad, capital of Pakistan on 6 January 2004. It creates a framework for the creation of a free trade zone covering 1.4 billion people in India, Pakistan, Nepal, Sri Lanka, Bangladesh, Bhutan and the Maldives.The seven foreign ministers of the region signed a framework agreement on SAFTA with zero customs duty on the trade of practically all products in the region by end 2016. The SAARC Preferential Trading Arrangement (SAPTA), with concessional duty on sub-continent trade, went into force on 7 December 1995. The new agreement i.e. SAFTA, came into being on 1 January 2006 and will be operational following the ratification of the agreement by the seven governments. SAFTA requires the developing countries in South Asia, that is, India, Pakistan and Sri Lanka, to bring their duties down to 20 percent in the first phase of the two year period ending in 2007. In the final five year phase ending 2012, the 20 percent duty will be reduced to zero in a series of annual cuts. The least developed nations in South Asia consisting of Nepal, Bhutan, Bangladesh and Maldives have an additional three years to reduce tarrifs to zero. Pakistan has signed but not ratified the treaty, though there is hope in India that it will sometime in 2008.

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South Asian Economic Union

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South Asian leaders called for setting up for SAEU at end of the 14th SAARC summit in New Delhi, 2007.


Steps To Create A Economic Union
First Step: Setting up "Preferential Trade Agreement" and/or reduce customs.
Second Step: Setting up a "Free Trade Area".
Third Step: Setting up a united "Customs Union".
Fourth Step: Setting up a "Free Market" where labour and capital can freely move.
Fifth Step: Setting up a "Economic Union".


Status of South Asian Countries to Become an Economic Union
First Step: Done.
Second Step: Not done.
Third Step: Not done. Seems to be very difficult for SA countries as different countries have very different ideas and beliefs.
Fourth Step: Not done. Seems a very difficult step for SA countries.
Fifth Step: Not done. Will probably take a very long time to accomplish this. Probably will not be possible for decades.

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Aarwaa

Pakistan is ruled by three As - Army, America and Allah.