Regional assimilation in South Asia came into force in 1985 when the South Asian Association for Regional Cooperation (SAARC) accordingly the Preferential Trading Arrangement (SAPTA) was formed. In 2004 the SAARC associates decided to shape a South Asian Free Trade Area (SAFTA) effective from 01 July 2006 as per the Article XXIV of the GATT with the aim of increasing regional trade facilitation among the SAARC members and that was the key idea of the regional trade liberalization in South Asia. The SAARC associates are generally developing and Least Developed Countries (LDCs). Although, the tariff of the SAARC countries have been considerably abridged for the improvements of regional trade through SAFTA. Thus, regional trade is not reduced by the high import tax, rather, is the consequence of the Non-Tariff Barriers (NTBs).
OVERVIEW OF NON-TARRIEF BARRIERS (NTBs)
It is predicted that when SAFTA instrument will completely come into force, then it will present the associate nations with enhanced market entree in South Asia, assist to increase their exports and progress regional trade and commerce. Many aspects which could have challenged the possible profits from the SAFTA. The larger types of obstacles were classified i.e. negative list mechanism, technical obstacles to trade and sanitary and phyto-sanitary actions, trade competency and customs processes, economic measures, para-tariff procedures and Visa problems. Although, Article 3 (1) of SAFTA mentioned the Objectives of this Agreement are to promote and enhance mutual trade and economic cooperation among Contracting States by, inter-alia: a) eliminating barriers to trade in, and facilitating the cross-border movement of goods between the territories of the Contracting States; (2) SAFTA shall be governed in accordance with the following principles: b) The Contracting States affirm their existing rights and obligations with respect to each other under Marrakesh Agreement Establishing the World Trade Organization and other Treaties/Agreements to which such Contracting States are signatories; d) SAFTA shall involve the free movement of goods, between countries through, inter alia, the elimination of tariffs, para tariffs and non-tariff restrictions on the movement of goods, and any other equivalent measures; f) The special needs of the Least Developed Contracting States shall be clearly recognized by adopting concrete preferential measures in their favour on a non-reciprocal basis and Article-6 reinforces that the SAFTA may, inter-alia, consist of arrangements relating to: a) tariffs; b) para-tariffs; c) non-tariff measures; d) direct trade measures. However, there is no obligatory pledge for countries within the provisions of SAFTA to remove NTBs. Therefore, NTBs would require to be addressed effectively with due significance for the promoting and protecting of regional trade among the SAARC countries.
NTBs AS ISSUES AND CONCERNS
At present, importance in regional trade and business assimilation in South Asia has enlarged. Despite positive opinion in support of enlarged regional assimilation, reviewers have noted some issues which could challenge the prospective interest from the SAFTA. It is argued that there are restricted harmonized policies in South Asia. Thus, the liberal trade instrument and the development of regional trade would not be much effective. These nations trade extremely small between themselves and main trading allies of all South Asian nations are situated in the West. It is pointed that SAFTA may direct significant trade distraction than trade formation for a few of the associate nations. It may be considered an effort to assimilate an uncertain chunk of regional trade. These apprehensions have also been approved by a few authorities while reviewing the possible influences of SAFTA on the member nations.
Apart from Afghanistan, Nepal and Bhutan, the entire South Asian countries have their key export marketplace not in South Asia. It also shows that trade within the South Asian nations is unfairly disseminated. Comparatively only a small amount of trade subsists between Bangladesh, Bhutan, Nepal and Sri Lanka. On the other hand India is the leading import supplier for Bhutan and Nepal; similarly it is also one of the major import supplier for Bangladesh. Hence, the regional trade in South Asia, specially the trade with India is mainly one-sided, as the amounts of importations from India to Bangladesh, Bhutan, Pakistan, Maldives, Nepal and Sri Lanka are significantly very big, while the amount of importation from these nations to India is very small.
Non-tariff barriers NTBs within the South Asian nations have been identified as one of the main basis that lead to the small regional trade and business in South Asia. Therefore, it can be said that the decrease of non-tariff barriers among South Asian nations is one possible way to have essential implications in terms of enhanced market entrance of these nations to their adjoining countries.
NON-TARIFF BARRIERS AND BANGLADESH
Since the third biggest economy in the South Asia, Bangladesh’s trade and business with the globe is important. Despite being a third biggest trader in the South Asia, Bangladesh has narrow regional trade contrasted to its trade amount with the globe. Reviewing the Bangladesh’s trade instructions and following communications among the specialist and associates of business society and govt. officials in the nation, the subsequent large kinds of NTBs surfaced most regularly.
Bangladeshi exporters often look for detailed seaport access due to prerequisite related restriction while inflowing India. The limitations are frequently imposed on a subjective basis by the Indian officials. Bangladesh also applies seaport access prerequisite for imports, for definite items, on the basis of different examination requirements. Bangladeshi rules necessitate that the imports under Bonded Warehouse scheme to come into Bangladesh through Chittagong seaport only. Nonetheless, there are few exemptions for the similar kinds of goods from Bhutan and Nepal inflowing Bangladesh through land ports.
Barrister Harun ur Rashid in his writing ‘Barriers hamper exports to India’ mentioned the Researchers in both countries have found that Bangladesh is not able to export its products to India for many reasons namely: a) Bangladesh’s main exportable products are largely within the ambit of India’s negative list of goods; b) Non-tariff barriers in India, such as testing and certification, technical standards and banking impediments are some of the identifiable non-tariff barriers; c) Ordinarily, a quality standard certificate from Bangladesh is not accepted by India, and import-export number is issued from Kolkata, which is at least 1,680 km from Agartala; d) Non-tariff measures are turned into non-tariff barriers while complying with sanitary and phyto-sanitary measures and technical barriers to trade; e) There are poor logistics for land ports, only certain commodities can pass through land ports, cumbersome customs requirements, manual clearance, excessive inspection as an excuse for security, no customs cooperation or joint inspection, lack of harmonization of standards, lack of warehouse facilities in land ports, and no testing facility near any land port. (These impediments also apply for Indian exporters as well); f) Visa restrictions make it difficult for business people to travel to India to promote trade from Bangladesh.
A notable amount of informal business takes place between India and other two nations, i.e., Nepal and Bhutan, through India is taking place; dealers were often stated as a trouble primary to enlarged hassles at the boundaries. Poor highway communications in Bangladesh were also a key problem. Nevertheless, opening of new technologies and the escalating height level of computerization at main border locations were renowned as optimistic improvements. Beginning of Border Haats (frontier markets) was also regarded as an affirmative advancement to encourage mutual and regional trade in South Asia. The difficulty in banking dealings with India was a chief distress articulated by Bangladeshi business society.
POLICY IMPLICATIONS AND RECOMMENDATIONS
1. There is requirement for synchronization of the TBT and SPS procedures. All SAARC nations should continue parallel SPS brand Non Trade Measures (NTMs) for animal and animal items and plant and plant items. For these items, SAARC nations may think balancing their NTMs. When these will be implemented then the receiving nation will be able to recognize permits issued by officials of other SAARC nation without performing scrutiny at the boundary points. This will be done in accordance with Article 2.3 of the WTO Agreement on Sanitary and Phyto-Sanitary measures which obliges non-discrimination among associate nations.
2. The endorsement organizations or societies of associate’s nations may put in place ‘endorsement bodies’.
3. Quality control procedures imposed by the SAARC nations’ need for coordination of ‘minimum standards policy’.
4. Planned agendas should be started in order to decrease/eradicate technical impediments and duplication of certificates.
5. Every SAARC nation should accelerate and give precedence to improved computerization of their customs clearance process.
6. Pertinent laws governing NTMs/NTBs should be adopted/ modernized and put into practice throughout entire South Asia.
7. The adopting of NTMs/NTBs-Desks should be approved by the SAARC which can help to maintain all relevant prerequisites for regional economic assimilation.
The SAFTA agreement embraced trade in goods only; it gives no orientation to trade in services, one of the fastest-growing mechanisms of global trade. The SAFTA associates should consent on opening the access of professionals, trained, semiskilled (counting unskilled) workers. The agreement does not identify a time-frame for phasing out non-tariff and para-tariff barriers. This needs to be done immediately otherwise regional trade growth under SAFTA will remain far below potential. Thus, NTBs in South Asia would need to be pointed effectively with due significance, as NTBs are the key obstacles to amplification of regional economic and trade collaboration in South Asia. Moreover, deeper collaboration among SAARC nations could potentially effect in significant reductions of these barriers.
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