South Asian Association for Regional Cooperation (SAARC)

What is SAARC?
Objectives of  SAARC.
Aims of  SAARC.
Apex Bodies of  SAARC.
Barriers of SAARC.
Failure of SAARC.
Anti Dumping Case; Bangladesh vs India

SAARC

The South Asian Association for Regional Cooperation (SAARC) is the regional intergovernmental organization and geopolitical union of nations in South Asia. Its member states include Afghanistan, Bangladesh, Bhutan, India, Nepal, the Maldives, Pakistan and Sri Lanka.

SAARC was founded in Dhaka on 8th December, 1985. Its secretariat is based in Kathmandu, Nepal. The organization promotes development of economic and regional integration. It launched the South Asian Free Trade Area in 2006. SAARC maintains permanent diplomatic relations at the United Nations as an observer and has developed links with multilateral entities, including the European Union.

Objectives

According to Article I of SAARC Charter the objectives of the ASSOCIATION shall be:

a) to promote the welfare of the peoples of SOUTH ASIA and to improve their quality of life;

b) to accelerate economic growth, social progress and cultural development in the region and to provide all individuals the opportunity to live in dignity and to realise their full potentials;

c) to promote and strengthen collective self-reliance among the countries of SOUTH ASIA;

d) to contribute to mutual trust, understanding and appreciation of one another's problems;

e) to promote active collaboration and mutual assistance in the economic, social, cultural, technical and scientific fields;

f) to strengthen cooperation with other developing countries;

g) to strengthen cooperation among themselves in international forums on matters of common interests; and

h) to cooperate with international and regional organisations with similar aims and purposes.

Principles

According to Article II of SAARC Charter

Cooperation within the framework of the ASSOCIATION shall be based on respect for the principles of sovereign equality, territorial integrity, political independence, non-interference in the internal affairs of other States and mutual benefit.

2. Such cooperation shall not be a substitute for bilateral and multilateral cooperation but shall complement them.

3. Such cooperation shall not be inconsistent with bilateral and multilateral obligations.

Secretariat

The SAARC Secretariat was established in Kathmandu on 16 January 1987 and was inaugurated by Late King Birendra Bir Bikram Shah of Nepal.

Regional Centres

The SAARC Secretariat is supported by following Regional Centres established in the Member States to promote regional co-operation. These Centres are managed by Governing Boards comprising representatives from all the Member States, SAARC Secretary-General and the Ministry of Foreign/External Affairs of the Host Government. The Director of the Centre acts as Member Secretary to the Governing Board which reports to the Programming Committee.

Apex and Recognised Bodies

SAARC has six Apex Bodies, they are-

    SAARC Chamber of Commerce & Industry (SCCI),

    South Asian Association for Regional Cooperation (SAARCLAW),[37]

    South Asian Federation of Accountants (SAFA),

    South Asia Foundation (SAF),

    South Asia Initiative to End Violence Against Children (SAIEVAC),

    Foundation of SAARC Writers and Literature (FOSWAL)

SAARC also has about 17 recognised bodies.

SAARC nations non-tariff barriers

The eight-nation South Asian Association for Regional Cooperation (Saarc) needs stronger political will and an end to non-tariff barriers to push mutual trade forward and if the alliance wishes to survive.

This is the message which has emerged from a new study titled 'Policy Advocacy Strategy For International Trade: Dealing With NTMs In South Asia'. The study was prepared by the Saarc trade promotion network group which deals with non-tariff measures (NTMs) in this region.

The importance of the study lies in the fact that world trade is annually increasing in multiples, on a traditional country-to-country basis, as well as in the form of trade zones, alliances and economic corridors.

Failure

More than 30 years have passed since the Saarc was established to promote mutual trade, business and investment. But it has failed to even raise mutual trade beyond 2.5 per cent to five per cent of world trade.

Beside this inertia, political skirmishing, especially between India and Pakistan, has paralysed Saarc, its trade, investment, travel and the expected launch of multi-nation projects in electricity, highways and infrastructure sectors.

The Saarc group in its study recommends that "the present situation warrants active participation of public-private leadership, stakeholders and development partners using innovative approaches to address NTMs and harness opportunities for the reduction and removal of the prevailing NTMs across the region."

Going back to the formative years of Saarc, the group says: "The popular hypothesis for the reason behind limited intra-regional trade was the then prevailing high tariff rates among member countries. Now, the rates have come down substantially over the years due to increased globalisation of trade, establishment of the World Trade Organisation and the South Asian Free Trade Agreement [Safta], yet intra-Saarc trade remains stagnant at about five per cent of total regional trade."

The study adds: "Based on these findings, it has now emerged that NTMs and the resulting trade barriers - i.e. non-tariff barriers [NTBs] - are the main reasons behind limited intra-regional trade."

Solution proposed

A key recommendation of the study is that "under a full implementation of Safta, some of the Saarc members will be able to increase their exports within the region quite substantially. India will be the largest gainer as its exports to this region will increase by $858 million."

There is good news for Pakistan, Bangladesh and Nepal too. The study estimates that exports from Pakistan will rise by $169 million, Bangladesh by $122 million and from Nepal by $90 million. Sri Lanka's exports will rise "but because of a foreign trade agreement between India and Sri Lanka, its exports to the Indian market will increase only by a small amount."

The study recommends the formation of "a regional group for policy advocacy in South Asia. It should comprise vice-presidents of the Saarc Chamber of Commerce & Industry as members. All Saarc members must agree to implement these recommendations to broaden the base for mutual trade."

Pakistan Prime Minister Nawaz Sharif said: "By broadening trade in the Saarc region, it will turn into a shining example for the world. It will also bring more prosperity to its people."

But the question is: Will it work because even high-level committees have come to a dead end in the past?

Anti Dumping Case

Bangladesh vs India

Complaint by Bangladesh.

This is the first dispute involving an LDC Member as a principal party to a dispute. On 28 January 2004, Bangladesh requested consultations with India concerning a certain anti-dumping measure imposed by India on imports of lead acid batteries from Bangladesh. Bangladesh is particularly concerned about the following aspects of the investigation by the Indian authority leading to the imposition of the definitive anti-dumping duties:

Initiation of the investigation, notwithstanding the unsubstantiated claim of the applicants that the application was “by or on behalf of the domestic industry”; and failure to immediately terminate the investigation, notwithstanding the negligible volume of imports from Bangladesh;

   

- Determination of margin (determination of normal value; apparent adoption of constructed value; determination of export price; and comparison between normal value and export price);

   

- Determination of injury and causation (examination of import volume, the effect on prices, and the impact on domestic producers of like products; inclusion of imports from Bangladesh in the assessment of the effects of imports; evaluation and examination of relevant factors; and examination of the causal link between the imports and the alleged injury);

   

- Treatment of evidence (failure to consider information submitted by the interested parties from Bangladesh; treatment of information submitted by the applicants as confidential; failure to disclose to the interested parties the “essential facts under consideration which form the basis for the decision to apply definitive measures” and other relevant information)

   

- Failure to provide the parties and give public notice of “all relevant information on the matters of fact and law and reasons which have led to the imposition of final measures”.

Mutually agreed solution

On 20 February 2006, the parties informed the DSB of a mutually satisfactory solution to the matter raised by Bangladesh.  The measure which was addressed in the request for consultations has been terminated by India’s Customs Notification No. 01/2005 dated 4 January 2005.