SAFTA agreement mandates 20% tariff ceiling for non-LDC members

Who it concerns: The agreement involves the Governments of Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka. It affects the trade sectors, specifically regarding tariffs, non-tariff measures, and direct trade measures, and includes specific provisions for Least Developed Countries (LDCs) within the group.

What was agreed

• Non-Least Developed Contracting States must reduce tariffs to 20% within 2 years of the agreement coming into force.
• Least Developed Contracting States must reduce tariffs to 30% within 2 years of the agreement coming into force.
• Non-Least Developed Contracting States must reduce tariffs from 20% to 0-5% within a subsequent 5-year period (6 years for Sri Lanka).
• Least Developed Contracting States must reduce tariffs from 30% to 0-5% within a subsequent 8-year period.
• Non-Least Developed Contracting States must reduce tariffs to 0-5% for products from Least Developed Contracting States within 3 years.
• Contracting States must eliminate all quantitative restrictions on products included in the Trade Liberalisation Programme.
• A SAFTA Ministerial Council (SMC) and a Committee of Experts (COE) are established for administration, monitoring, and dispute settlement.

Also in the document

• Special and differential treatment is provided to Least Developed Contracting States, including non-reciprocal preferential measures and longer timelines for tariff reduction.
• The agreement includes a mechanism for 'Sensitive Lists' where tariff reductions may be excluded, subject to a mutually agreed maximum ceiling.
• The agreement mandates the annual notification of non-tariff and para-tariff measures to the SAARC Secretariat for review by the Committee of Experts.