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SAARC countries implement first tarrif cut from July 1, 2006

03 Jul '06
3 min read

Seven South Asian states including Pakistan are set to implement first downward revision in their tariff under the South Asian Free Trade Area (SAFTA) agreement from July 1, 2006 in a first ever trade facilitation among the neighbouring countries.

Officials and traders say from Jully, 1, 2006, the SAARC countries would enforce downward tariff revision in line with the minutes of a meeting of technical committee of experts, which met Kathmandu earlier this year.

The committee offered almost six months to the member states to ratify the agreement from their respective cabinets or parliaments, said an official of commerce ministry.

The understanding reached suggests the member countries have shown agreement on four areas, which include finalisation of sensitive list, which would be 20 per cent of their total tariff lines, compensation for the LDCs (Least Developed Countries), rules of origin and technical assistance.

He said the SAFTA clauses asked the non-LDCs - Pakistan, India and Sri Lank - to reduce their tariff from the existing levels to 20 per cent within a period of two years commencing from July 1, 2006.

Effective June 30, 2008, they would reduce their tariff to the level of 20 per cent, he added.

Pakistan entered into three international trade agreements in 2006, which included a SAFTA with seven countries and two early harvest programmes with China and Malaysia before the formal free trade agreements.

The SAFTA bound the developing members of the agreement including Pakistan, India and Sri Lanka to cut tariffs to between zero and five percent within seven years of the start of the agreement.

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