SAFTA

What is Safta?
It is an abbreviation for the South Asian Free Trade Area. It is a proposed FTA between the seven
members of the Saarc group. These include Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri
Lanka.
What is its ultimate goal?
It will replace the earlier South Asia Preferential Trade Agreement (Sapta), which was limited in its scope.
The ultimate aim of Safta will be to put in place a full-fledged South Asia Economic Union on the lines of
the EU. Safta is scheduled for launch in January 2006 and will lead to reduction of tariffs for intra-
regional trade among Saarc countries.
What falls within the ambit of Safta?
The agreement incorporates trade in goods. Services and investment are not part of the agreement.
What are the objectives guiding Safta?
Among its aims are: promoting and enhancing mutual trade and economic cooperation by eliminating
barriers in trade, promoting conditions of fair competition in the free trade area, ensuring equitable
benefits to all and establishing a framework for further regional cooperation to expand the mutual
benefits of the agreement.
What other benefits can Safta bring to member-countries?
It could lead to enhancement of foreign investment among Saarc nations. The visible spurt in foreign
investment within Asean cou-ntries and the increase in investments by India in Sri Lanka and vice versa
following the India-Sri Lanka FTA bear testimony to the potential of such agreements in boosting
investments.
The agreement can be structured to ensure that such investments don't harm the domestic industries of
member-nations. RTAs, like the proposed Safta, can also catalyse beneficial industrial restructuring in
member-countries through cross-border corporate marriages and acquisitions.

The following countries are part of the South Asian Association for Regional Cooperation:

MEMBERS:
- Afghanistan
- Bangladesh
- Bhutan
- India
- Maldives
- Nepal
- Pakistan
- Sri Lanka


OBSERVERS:
- Australia
- China
- European Union
- Iran
- Japan
- Mauritius
- Myanmar
- South Korea
- United States



All 27 member nations of the EU would be considered observers.

SAARC in the context of Regionalism
The South Asian Association for Regional Cooperation (SAARC) summit is often
described as being a mere photo opportunity for south Asian leaders who should
actually be using the comatose organization to reinvent regional cooperation in a
globalize world. Such pessimism is inevitable if one takes stock of the progress that
SAARC has made over the period of time. There exists a SAARC convention to deal
with all issues that have a certain salience in the regional context. Yet, even 25 years
after its inception the organization is found wanting both in terms of forming a regional
identity and of forging any sense of a regional belongingness. This is where the problem
lies.
South Asian countries engage readily and often with powerful states in the international
system, yet when it comes to regional engagement, their bilateral relations have
remained strained, and are characterized by mistrust and suspicion thus making
regional cooperation hostage to bilateral politics.
Gaining Strategic Space
At present, consisting of eight members, SAARC has the potential to expand its
membership to include Myanmar. What has been intriguing in the recent past is that
while many in South Asia have written the obituary of SAARC as a vehicle for fostering
regional cooperation, there are countries who are vying with each other to become part
of it as observers. One of the observers aspiring for membership is campaigning for it
through its regional proxies. It is too early to say whether SAARC, which could not
inculcate a sense of regional solidarity within its membership, will be able to deal with
observer countries who are more interested in gaining strategic space rather than in
regional cooperation.
The organization has yet not delineated the possible role of the observer countries. In
this context it is not clear whether their engagement will benefit the SAARC countries.
Some member countries like Sri Lanka and Bangladesh have expressed hopes that the
observers would play a positive role. AARC has progressively addressed 'hard' issues
that confront the region more than 'soft' issues. If one compares the agenda of the
organization when it was formed with its current goals then SAARC can be seen to be
slowly moving towards regional integration in the real sense. This integration is beyond
having just a common approach to issues like poverty, telecommunication, weather,
sports, culture, etc., as was envisaged in the beginning. The translation of its agenda
into a meaningful cooperation has also not been possible due to the declaratory
approach the leadership has taken and endorsed without having any real commitment
towards these goals. The reason could be that the leaders perhaps feel compelled to
demonstrate to the people of the region that they are committed to the process of
regional cooperation without appearing to be spoilers. There exists popular support for
regional cooperation. The people want less rigid visa controls and free exchange of
goods and ideas, while keeping the current borders intact. Regional cooperation is a
reality. Whether it is security or economics, SAARC countries are more integrated with
the global order than with their regional arrangement. There are no underlying economic
compulsions that bind the countries of the region as was the case with the European
Economic Community (EEC). The countries of south Asia do not have common security
concerns to unite them. Threats are mostly seen arising from within the region rather
than from the outside. Therefore the problem is: how can the countries of South Asia
cooperate with each other when they perceive each other as being responsible for their
instability? Because of this mistrust, many of the conventions--such as the Additional
Protocol of the SAARC Convention on Terrorism--have become defunct. Each country
faces the challenge of terrorism yet South Asian countries have not been able to devise
a common approach to it. They neither share intelligence nor is there any commitment
to stop cross-border support to terrorist groups. If one analyses the various clauses of
the Additional Protocol of Terrorism which criminalised the collection or acquisition of
funds for the purpose of committing terrorist acts, it becomes amply clear how the very
purpose of dealing with the issue has been defeated because of the double standards
prevailing among states in the region. Though SAARC has a Terrorism Monitoring Desk
in Colombo it has not yet come out with any report. The SAARC interior ministers'
meeting has also not made any concrete suggestions on how best to cooperate. The
issue of terrorism has rather been addressed bilaterally. If one studies the speeches of
the heads of states at the recently concluded 16th SAARC summit it will be seen that
they devoted much time to expounding their countries' achievements in dealing with
various socio-economic and terrorism-related problems. Some of these speeches were
prescriptive in nature when what was required was how their countries had promoted
regional cooperation. The leaders reiterated the importance of regional cooperation
without specifying how to take this cooperation forward. The president of Afghanistan,
Hamid Karzai, in his speech put greater emphasis on terrorism and said: 'Until all
members of SAARC, without exception or reservation, commit not to allow their
territories to be used directly or indirectly to shelter, arm or train terrorist groups . . . the
wild fire of terrorism will not discriminate in choosing its target'.1 He also stressed that
with current bottlenecks, expeditious overland movement of goods and benefits of a
modern transport infrastructure would not be felt. Maldivian president, Mohamed Nashid
called for a 'comprehensive review of the on-the-ground effectiveness of SAARC'. He
asked for greater dialogue between India and Pakistan and expressed the frustration of
the smaller countries of south Asia who have often found themselves hostage to the
Indo-Pak conflict. The president said that the 'neighbours can find ways to
compartmentalise pending differences, while finding areas on which they can move
forward'.2 Bhutan felt that SAARC was losing its focus because of the requirement of
close to 200 meetings per year. It therefore suggested a substantial reduction of
activities and meetings to ensure focus..
Regional Cooperation
SAARC has already established the South Asia Regional Standard Organization. Efforts
should be made to make it operational. Bilateral relations between the countries would
be crucial to facilitate such investments as private businessmen are unlikely to invest
given an environment of distrust which is not conducive for business. It is important that
SAARC leaders take steps to implement regional connectivity in order to drive growth,
induce better synergy and give a boost to SAFTA.
Observers in SAARC China's growing influence in the region has been a matter of
concern for India. China's entry into SAARC in 2005 has been significant and Nepal,
Bangladesh and Pakistan played an important role in facilitating Chinese entry. China's
presence is a matter of concern for two reasons. First, there is a growing nexus
between China and Pakistan at the heart of which lies the policy to balance India. Its
presence therefore cannot be considered neutral. Second, China's presence in SAARC
is specifically for gaining strategic space. China has been following a strategy to engage
with neighboring countries for defense and economic cooperation. Though China's trade
ties with India have seen an upward swing, it has border conflicts with India and Bhutan.
The relations between India and China have remained highly suspect. China shares
good relations with the neighboring countries whereas India is looked upon with
suspicion. In this context China's presence could be a pressure tactic that may be
employed on India. A conflicted relationship with China would confine India to the region
and prevent it from playing a larger global role. This has been one of the principles of
China's engagement in the region.
Collective Self-Interest
It is a tall order to expect regional cooperation between countries who do not see eye to
eye even in bilateral matters.
Each country joined SAARC to forward its interests or to avoid getting sidelined,
particularly within the Indo-centric region. Pursuing national interests is desirable but to
pursue it under the cloak of regionalism is a recipe designed for the failure of SAARC. A
regional identity is essential for the success of SAARC.
People-to-People Contact
If the countries try to undermine regional interests for their narrow political advantage
then members can resign themselves to this forum becoming a mere talking shop. Even
after 25 years it has failed to connect with the masses. Its promotion of people-to-
people contact is restricted to judges, diplomats and the parliamentarians.
SAARC needs to get off its elitist pedestal and adopt a subaltern approach. However,
the time to write the epitaph of SAARC has not yet come.

The partnership of SAARC has grown in strength and importance over the years. It is one that, we trust,
will take the South Asian Region to a position of strength and importance, with a singular voice and new
approaches, to dealing with the many issues that confront both South Asia and the world at large, says
President Mahinda Rajapaksa in his message for the 15th SAARC Summit being held in Colombo
Here is the text of the Presidents message:

The 15th SAARC Summit continues the work begun by the founders of SAARC 23 years ago, when they
saw the need for regional cooperation to promote the welfare and quality of life of all peoples of the South
Asia Region, bringing together seven nations with a common heritage of understanding, enriched by its
diversity.
As we meet for this 3rd SAARC Summit in Colombo, with a new member among us, we see a region that
has changed considerably for the better since SAARC was established. There is more interaction among
nations and peoples, greater economic growth and cooperation throughout; considerable advances in
health and education, and overall improvement of the quality of life within this region, together with a clear
commitment to move further on the path of progress though regional integration. As we progress in the
South Asian Region we are not without the problems that made the founders of SAARC realize its need.
Poverty remains widespread although in lesser numbers. Many barriers remain to be removed for the
promotion of better trade and commerce within the region. Today, terrorism straddles across the borders
of many of our member states, and the South Asian Region too, has to face the challenges of food
security and depleting fossil fuels, as well as climate change.
At the last SAARC Summit in New Delhi, there was understanding reached on the importance of
connectivity among our nations and peoples. We also realized the need to be an action-oriented
organization to transform into reality the many good measures endorsed by SAARC over the years. From
the need for greater connectivity we now move towards a genuine partnership for all our peoples. This is
a partnership that has grown in strength and importance over the years. It is one that, we trust, will take
the South Asian Region to a position of strength and importance, with a singular voice and new
approaches, to dealing with the many issues that confront both South Asia and the world at large.
I wish all success to the partnership we seek to build for our people, in the sprit of unity and
understanding that SAARC stands for.