South Asia Trade Agreement

Despite these agreements, trade in the neighbourhood has remained well below its potential. This is an example of the fact that agreements alone are not enough to facilitate trade if trade barriers are not addressed holistically. The existence of paratarifs, high logistical costs, inadequate infrastructure and continued informal trade combined with other non-tariff barriers (NB) are the main reasons for India`s weak intra-regional trade in the neighbourhood. As a result, the cost of trade in South Asia remains unusually high. [8] South Asian countries must take steps to eliminate parabolic tariffs and NB. Additional tariffs on state imports are not part of SAFTA or other free trade agreements in the region. In addition, non-governmental organizations such as import barriers, anti-dumping and countervailing measures, testing and certification requirements, export subsidies and government participation have reduced the potential for intra-regional connectivity. [16] Worldwide, the signing of the Customs Convention on the International Transport of Goods under the guise of TIR CARnets (TIR Convention, 1975) is a positive step towards the elimination of some NB and the simplification of procedures. [17] In order to identify South Asia`s commercial potential, this model should be replicated at the regional level. Nepal imported 54,076 tonnes of palm oil from July to August and exported 35,706 tonnes to India during this period, according to the trade organization, referring to import data. Despite the geographical proximity and the existence of bilateral and multilateral free trade agreements, South Asia is one of the least economically integrated regions in the world. Due to protectionist measures, high logistical costs, a lack of political will and a wider lack of confidence, intra-regional trade in South Asia remains well below its potential, with 5% of world trade in the region.

[2] This makes South Asia one of the most disconnected regions in the world, particularly compared to other regions such as East Asia and the Pacific, where intra-regional trade accounts for about 50% of total trade, and sub-Saharan Africa, where intra-regional trade has improved over the years to 22%, reflecting the fact that governments have put in place more transparent mechanisms for facilitating trade. [3] Intra-regional trade in the South Asian region (including Myanmar) is only 5.6% (2017). [4] Only Afghanistan, Bhutan and Nepal have a larger trade share with India than China The dynamism of free trade in the 2000s was largely lost with India`s neighbours. Trade liberalization initiatives under the Multi-Sector Technical and Economic Cooperation Initiative (BIMSTEC) under the Bay of Bengal have been under negotiation for more than 15 years.