What are the impediments in the development of South Asian Free Trade Area (SAFTA)?. (UPSC CSE Mains 2017 - Political Science and International Relations, Paper 2)
South Asian Free Trade Agreement (SAFTA)
- Motivated by the commitment to strengthen intra-SAARC economic cooperation to maximise the realisation of the region’s potential for trade and development for the benefit of their people, in a spirit of mutual accommodation, with full respect for the principles of sovereign equality, independence and territorial integrity of all States.
- The Contracting States hereby establish the South Asian Free Trade Area (SAFTA) in 2004 during the 12th SAARC Summit held in Islamabad (Pakistan) to promote and enhance mutual trade and economic cooperation among the Contracting States, through exchanging concessions in accordance with this Agreement.
- There are a host of reasons behind SAFTA’s sorry state. Tariff and non-tariff barriers, extensive sensitive list, poor connectivity, visa restrictions, lack of proper border infrastructure and booming informal trade are some of the major ones.
Impediments
- Non-tariff barriers continue to pose challenges to trade among member countries.
- Sometimes, there are too many rules and regulations to trade with other countries. It can be difficult to understand and follow all the rules.
- Inadequate infrastructure and connectivity hinder the smooth flow of goods.
- Some places don''t have good roads or ways to transport goods. This makes it hard to trade with other countries.
- Less-developed countries may face difficulties in adjusting to competitive pressures. This can make it harder for them to benefit from SAFTA.
- Sometimes, countries have political tensions and don''t get along. This can make it difficult to work together and trade with each other. This creates obstacles to trade and economic cooperation.
- SAFTA''s scope is limited to trade in goods, services, and investments. It does not cover other important areas, such as intellectual property rights.
- SAFTA focuses on some areas but may not help everyone equally.
- Some countries may need more support to benefit from the agreement.
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