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South Asian Free Trade Area (SAFTA), image - Coggle Diagram
South Asian Free Trade Area (SAFTA)
Historical origins: evolution
The idea of establishing a free trade area in South Asia was first proposed in the early 1990s.
The South Asian Preferential Trade Agreement (SAPTA) was signed in 1993. It aimed to promote trade liberalization among the SAARC member countries.
SAPTA did not achieve significant progress in bringing down the trade barriers. Hence, SAFTA was launched as an enhanced version of SAPTA in 2004.
The SAFTA agreement aimed to establish a more effective free trade area in the region.
Countries involved:
Afghanistan
Bangladesh
Bhutan
India
Maldives
Nepal
Pakistan
Sri Lanka
Key Principles and benefits
SAFTA aims to eliminate any mistreatment in trade amongst its members.
It provides them equal opportunities
SAFTA recognizes the development rate in every country, and help them economically based on their situation.
SAFTA aims to reduce and cut down tariffs on goods traded among member countries.
SAFTA encourages transparency in trade policies and practices. It promotes fair competition among member countries.
Definition
SAFTA stands for South Asian Free Trade Area. It is an agreement among the member countries of the SAARC. It promotes and enhances economic cooperation in the South Asian region. SAFTA aims to create a free trade area by gradually reducing and eliminating tariffs. It also aims to cut down other trade barriers among its member countries.
Future Prospects and Challenges
Reduce Trade Barriers
Increased connectivity
Multi-modal transport.
Potential drawbacks or challenges
Non-Tariff barriers
Cross border infrastructure
Narrow focus of SAFTA.
Asian Politics
Terminologies
SAPTA: Predecessor of SAFTA. South Asian Preferential Trade Agreement.
SAFTA: South Asian Free Trade Area
SAARC: South Asian Association for Regional Cooperation
Some real life examples
India-Sri Lanka trade of machinery and tea.
India-Bangladesh trade of machinery and agriculture.
India-Bhutan trade of services, minerals, and electricity.
