This Article was published in
All Voices (December 20, 2010)
By Sahibzada Hussain Mohi-ud-Din Qadri
The main thrust of the work in the field of trade liberalization has been towards
the reduction of tariffs and removal of non-tariff barriers in the ECO region. While
trade does not obviate the need for large scale development investments, an open
and equitable trading system can be a powerful driver of economic growth in the
ECO region, especially when combined with adequate political support. Therefore,
implementation of ECOTA and relevant trade facilitation programs rightly lies at
the heart of the trade development in the region. The ECO countries strive to dismantle
market access barriers and begin phasing out trade-barriers in the region in order
to pave the way for free-trade area.
ECOTA was signed by five Member States during the 2nd Ministerial Meeting on
Commerce/Foreign Trade, held in Islamabad, Pakistan on 17 July 2003. Since then,
the ECO Secretariat is pursuing for its implementation in the region through urging
Contracting Parties to expedite ratification process and approaching to non-signatory
Member States to be Party to it as soon as possible. This agreement will enter into
force after the date of receipt of the instrument of ratification, acceptance, or
approval from five Contracting Parties. Amongst the Contracting Parties, so far,
only Pakistan and Tajikistan have ratified the said Agreement. Some member states
are negotiating on adopting a fast-track approach which foresees further reduction
to the highest tariff slab from 15% to 10% within five years time instead of eight
years.
The 1st High Level Expert Group (HLEG) meeting on Trade and Investment, held
in Ankara, Turkey on January 13-15, 2004 recommended adopting a “Fast Track Approach
to ECOTA”. Although, signing of the Protocol on fast-track was included in the agenda
of the 3rd Ministerial Meeting on Commerce/Foreign Trade (July 7, 2005) held in
Istanbul, Turkey, it could not be realized due to some reservations raised. The
4th HLEG meeting to be held on 9-10 November, in Kabul, will resolve controversial
issues so that the Member States could sign the Protocol at the earliest.
The 3rd Ministerial Meeting on Commerce/Foreign Trade approved and signed a “Protocol
for the annexes of ECOTA on (i) ECO Rules of Origin (ii) Anti-Dumping Measures,
(iii) State Aid, and (iv) Intellectual Property Rights”. The said Protocol was signed
by four Member States, i.e. Afghanistan, Iran, Pakistan, and Turkey. Moreover, Pakistan
has already ratified the said Protocol. This achievement will facilitate signature/or
ratification process of ECOTA with its annexes by the Member States.
TTA was signed in 1995 (except Afghanistan and Uzbekistan) and ratified by all
the signatory member states. It is not fully implemented. Initially, in face of
difficulties for new ECO member states to become a party and implement the TIR Convention,
TAaimed to facilitate trade between two member states via transit through other
member states. It is applicable to road, railway, sea, air or any combination of
them. Goods transported under the Agreement are not subject to import/export duties
and taxes. Guaranteeing Associations undertake to pay duties/taxes and default interest
due under the customs law/regulations of the country in which an irregularity has
been committed. Goods shall not be subject to examination through Customs en route.
Customs offices will accept the validity of ECO Passage Document in order to avail
facilities under the Agreement. Guaranteeing Associations will act as the guarantor
of the transit system. Transit Trade Committee comprising of one representative
from each signatory member state will monitor the implementation, make procedures,
and resolve any disputes arising out of the operation. Guaranteeing Associations
have been nominated (except by Azerbaijan and Turkmenistan). ECO Passage Document
has been finalized (except Authorization for Natural and Legal Persons to utilize
EPD). Technical standards of vehicles have been approved. ECO Road and Railway Maps
have been prepared, to be approved by the member states.
Prospects and challenges for TTA are: (i) minimum conditions and requirements
(i.e. authorization) for natural and legal persons to utilize EPD shall be adopted
by the member sates; (ii)printing, distribution, and monitoring of EPD; (iii) establishment
of a Regional Guarantee System which will ensure that all duties and taxes are covered
either by the transport operator or by the national guarantee associations of the
Member States; (iv) capacity building in Guaranteeing Associations; (v) activation
TTC for monitoring the Agreement; (vi) collecting data on transit volume, clearance
time and problems; (vii) involving freight forwarders and transporters and ECO Chambers
in implementation of the Agreement.
Other physical and regulatory requirements can be summarized as: (i) improvement
of facilities and infrastructure in border crossings ; (ii) alignment of working
hours in border crossings; (iii) simplification of customs transit procedures; (iv)
harmonization of technical requirements of vehicles; (v) reducing high and diverse
transit charges; (vi) making transit rules and procedures transparent and stable.
8. Implementation of Transit Transport Framework Agreement (TTFA) which was singed
in 1998 is other important issue. TTFA being in line with current developments that
more and more ECO member states strive is ready to become a party to the TIR convention,
in time, has gained an upper hand over TTA and now preference is given for its early
implementation.
However TTA is not shelved until the TTFA enters fully into power. TTFA covers
all modes of transportation including insurance and other related issues. The Secretariat
has emphasized on the importance of the ratification of this agreement in several
meetings as well as in its contacts with the relevant officials of the Member States.
So far, five member countries namely Azerbaijan, Kazakhstan, Kyrgyzstan, Pakistan,
and Tajikistan have ratified the agreement. Afghanistan unofficially has informed
the Secretariat about ratification of TTFA in that country. In addition, the Secretariat
has requested the Member States to introduce their nominees for Transit Transport
Coordination Council (TTCC), which will monitor and follow implementation of TTFA.
Azerbaijan has recently agreed to be the coordinator country for the implementation
of TTFA.
Customs and Transit Trade cooperation also plays an important role in the economic
cooperation among the ECO Member States. The 4th meeting of the ECO Council of Heads
of Customs Administration (CHCA), held in Baku, Republic of Azerbaijan, on May 16-18,
2005 finalized the text of the draft Agreement on establishment and operation of
the ECO Smuggling and Customs Offences Data Bank. The said Agreement was approved
by the Member States and initially signed by Afghanistan, Pakistan, and Turkey during
the 3rd Ministerial Meeting on Commerce and Foreign Trade. Recently, we have acknowledged
the willingness of Kyrgyzstan to sign the said agreement. This Agreement would come
into force upon signature/ratification of at least four ECO Member States. To this
end, an action plan will be prepared in coordination with Turkey (host of Data Bank)
leading to the operationalisation of the Data Bank.
The 4th meeting of ECO-CHCA also reviewed a UNDP Consultant report on simplification
and harmonization of customs procedures and agreed to form a working group of experts
to further consider actions on the recommendations of the Consultant. Cooperation
with WCO within the framework of MOU signed between ECO and WCO, cooperation with
ADB and customs cooperation among the ECO Member States were also reviewed during
the said meeting. Member States were requested to provide their customs news/material
to Islamic Republic of Iran Customs Administration (IRICA) on regular basis for
publication in the ECO Customs Newsletter. The Council elected the Head of Turkish
Customs Administration as its next Chairman and the First Deputy Chairman of State
Customs Committee of Azerbaijan as its Vice-Chairman.
Exchange of updated data/information relating to trade and investment among the
ECO Member States has gained special significance. In this regard, ECO has held
several seminars. The 3rd ECO Seminar on Trade and Investment Information Networking
held in Karachi, Pakistan on 31st January-01 February 2005 was the latest. In this
Seminar, ECO Member States actively participated and agreed to designate fresh Focal
Points on Trade and Investment for prompt exchange and presentation of relevant
data/information through the interactive ECO Web portal (www.tradeeco.org), which
was developed with financial assistance of UNDP. The said Web portal is being upgraded
time-to-time taking into account the recommendations of ITC Expert who participated
in the abovementioned Seminar. Moreover, utilization of ECO Feasibility Fund is
being proposed to Council of the Permanent Representatives (CPR) for this purpose.
There is an urgent need to follow the effective implementation and further updating/expanding
the scope of the agreement on simplification of visa procedures for the businesspersons
of the Member States to further facilitate the contact and communication among the
citizens of the Member States. In this regard, the CPR approved that the Islamic
Republic of Iran, as a coordinator, to host the 1st Experts Group Meeting (EGM)
to revise the Agreement on Simplification of Visa Procedures for the Businessmen
of ECO Member States.
(The writer is a PhD candidate in Economics)
