South Asian Free Trade Agreement: An Analysis of the Potential Restrictions on Free Trade

The SAFTA Framework Agreement was ratified in January 2004 leaving open the scope of negotiations on key areas of tariff liberalization schedule, sensitive lists, rules of origin, compensation mechanism for LDC economies, technical assistance and capacity building, etc. The tariff liberalization programme (TLP) proposed under SAFTA will become fully effective for non-LDCs only by the year 2013 (and 2016 for LDCs). However, a substantive proportion of trade within the region may in fact be excluded from the TLP, undermining the concept of implementing a free trade agreement. The SAFTA Agreement has permitted the exclusion of a ‘sensitive’ list of items from tariff liberalization of 20 per cent of HS 6-digit tariff lines for non-LDC member states (and a relatively higher percentage for LDCs). The proposed study aims to focus primarily in offering a preliminary analysis of the extent of intra-SAARC trade that is excluded from the agreement and draw up policy recommendations to strengthen the SAFTA process.

Research team

Dushni Weerakoon
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Jayanthi Thennakoon

Funding

UNDP Regional Centre, Colombo

Published Year

2006