SAPTA
Introduction: SAPTA means SAARC Preferential
Trade Arrangement. It is designed to expand inter-regional trade through trade liberalization
to achieve even four percent of the total trade among SAARC countries over the
last eight years since the inception of SAPTA. The signatories to the SAPTA believed
that the expansion of inter-regional trade could act as a powerful process to
the development of their national economies by expanding trade investment and
production within the region.
Inception of SAFTA: SAPTA came into operation
in December 1995, and looks forward to forming the South Asian Free Trade Area (SAFTA)
putting a greater emphasis on the increased participation of South Asian
countries in regional trade in order to bolster their share in the world trade.
The first negotiations: The first round
of negotiation under SAPTA concluded with a total of 226 items for which tariff
concession ranging from 10 percent to 100 percent was offered. In the second
round of SAPTA negotiation held in Kathmandu in 1926, and 2013 products were offered
for tariff concessions of which 799 were exclusively in favour of LDC including
Bangladesh, Bhutan, Maldives, and Nepal. The official import of Bangladesh from
India is dominated by eight commodity groups. The commodity groups are textile,
vegetable products, vehicles, vessels-transport equipment, chemicals, machinery,
rubber, foodstuff, and mineral products.
A consulting firm: A consulting firm is
essential for the purpose. Understanding from the Ministry of Commerce it has
engaged a consulting firm to implement the SAPTA study project. Meanwhile, due
to political developments in the regions, the activities under SAPTA and the
process to transform SAPTA into SAFTA have virtually stalled. However, a fresh
initiative to gear up the SAPTA activities was expected to begin soon. Comparing
official and unofficial trade, the study team observed that out of 30 items 10
percent for 79 percent of unofficial import while the official import is only
21 percent. Bangladesh imports from India increased from Tk. 24.72 billion in
1994-95 to Tk. 57.08 billion in 1996-97. Whereas the imports covered by SAPTA
declined from Tk. 65 billion to Tk. 1.21 billion during the same period. Imports
from India through official channels increased further and through unofficial
channels the volume of imports has been more than that.
Border-crossing: But the cross-border
trade is voluminous and it will be an almost impossible task to bring this
trade under a legal system. The basic reason is the peculiar borderline of
Bangladesh with India.
Tariff and concession: The
understanding for making tariffs and other concessions under SAPTA is more
relevant to the concrete needs and circumstances of the member countries, after
taking their respective resource endowment positions into consideration, through
a successive round of negotiation. There has been no real and effective
progress in carrying forward the SAPTA process. Against the background,
there is now a manifest trend among the SAARC member countries to shun the multilateral
path. Instead of the multilateral framework, the member countries are going
ahead with a bilateral approach to the trade and investment cooperation process.
Conclusion: Despite its rich, cultural, and civilized history. South Asia has the largest number of the poorest most
malnourished and illiterate people in the world. The agenda for cooperation in
trade, investment, and other related socio-economic fields is certainly in the interest
of the citizens of South Asia. The cost of non-co-operation, particularly in
the context of global economic and other trends to the people of the region and
its governance is enormous, even horrendous.
