Repot on Safta

7/28/2019 Repot on Safta

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An Assignment

On

SAFTA TREATY &

RECENT TRADEAGREEMENTBETWEEN

INDIA & BANGLADESH


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Safta treaty and recent trade agreement

between India and Bangladesh

Submitted to:Mr. Anup ChowdhuryAssistant professorDepartment of Finance & Banking

Submitted by:Name Student Id:Fahmida Sultana 588Bushra Binte Mizan 594Salman Rahman 599Mahadi Mushrur Ahmed 609Sariful Islam 610

Department of Finance & BankingJahangirnagar University, Savar, Dhaka

24 September 2011


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Acknowledgement

This is our pleasure to prepare and submit the report on Safta treaty

and recent trade agreement between India and Bangladesh. We

are very grateful to my Paper Leader Mr. Anup Chowdhury for designing

the course with this assignment and providing us such an immense

opportunity. Though we think that right now how accurate can we provide

our suggestion regarding the said topic. But we are really enjoying the

task and tried to give our full effort to make it rich and resourceful. We

want to give specially thank to all the associates who provide all the

company related information and also inspire us in preparing this

assignment.

At last but not at least the Almighty Allah to whom we are grateful forever

and ever in giving us all the opportunities in doing each and everything.

Department of Finance & Banking

Jahangirnagar University

Savar, Dhaka.

24 September 2011


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Mr. Anup Chowdhury

Assistant professorDepartment of Finance & Banking

Subject: Letter of Transmittal

Dear Sir:

It is our immense pleasure to present you the report on Safta treaty andrecent trade agreement between India and Bangladesh. This report has

been prepared to know about the ins and outs of Safta treaty and recent

trade agreement. This report contains what is Safta treaty, recent trade

agreement between India and Bangladesh and necessity of those.

It has been a great contentment to submit you the report.

Sincerely yours,

Fahmida Sultana Bushra Binte Mizan Salman

Rahman

(Id: 588) (Id: 594)

(Id: 599)

Mahadi Mushrur Ahmed Sariful Islam

(Id: 609) (Id: 610)


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Table of contents

1.0 Executive Summary------------------------------------------------------ v2.0 Introduction---------------------------------------------------------------- 07

2.1 Origin of the report-------------------------------------------------- 08

2.2 Problems and purposes-------------------------------------------- 08

2.3 Scope of the report-------------------------------------------------- 08

2.4 Methodology -----------------------------------------------------------08

2.5 Limitations --------------------------------------------------------------- 09

3.0 Report body------------------------------------------------------------------09

4.0 Conclusion-------------------------------------------------------------------- 44

5.0 Appended parts-------------------------------------------------------------45

5.1 Appendix----------------------------------------------------------------------45


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1.0 Executive Summary

AGREEMENT ON SOUTH ASIAN FREE TRADE AREA (SAFTA)

The Governments of the SAARC (South Asian Association for RegionalCooperation) Member States comprising the People's Republic ofBangladesh, the Kingdom of Bhutan, the Republic of India, theRepublic of Maldives, the Kingdom of Nepal, the Islamic Republic ofPakistan and the Democratic Socialist Republic of Sri Lanka hereinafterreferred to as "Contracting States"

Motivated by the commitment to strengthen intra-SAARCeconomic cooperation to maximize the realization of the region'spotential for trade and development for the benefit of their people,

in a spirit of mutual accommodation, with full respect for theprinciples of sovereign equality, independence and territorialintegrity of all States;

Noting that the Agreement on SAARC Preferential TradingArrangement (SAPTA) signed in Dhaka on the 11th of April 1993provides for the adoption of various instruments of tradeliberalization on a preferential basis;

Convinced that preferential trading arrangements among SAARCMember States will act as a stimulus to the strengthening ofnational and SAARC economic resilience, and the development ofthe nationaleconomies of the Contracting States by expanding investment andproduction opportunities, trade, and foreign exchange earnings aswell as the development of economic and technological cooperation;

Aware that a number of regions are entering into sucharrangements to enhance trade through the free movement ofgoods;

Recognizing that Least Developed Countries in the region need tobe accorded special and differential treatment commensurate withtheir development needs; and

Recognizing that it is necessary to progress beyond a PreferentialTrading Arrangement to move towards higher levels of trade andeconomic cooperation in the region by removing barriers to cross-border flow of goods.


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India and Bangladesh sign five agreements

India and Bangladesh have signed five agreements includingtreaties on tackling cross-border crime and combating terrorism.

The agreements were signed on the first day of Bangladesh Prime MinisterSheikh Hasina's official visit to India.

They included a pledge by Delhi to provide a $1bn credit to improveBangladesh's infrastructure.

The announcement was made after Sheikh Hasina met her Indiancounterpart, Manmohan Singh.

Officials say that much of the money provided by India will be used forimproving Bangladesh's railway network and dredging the rivers sharedbetween the two countries.

Sheikh Hasina assured the Indians that Bangladesh would not allow its soil to be used bygroups "inimical to India".

2.0Introduction

2.1 Origin of the report:

Only theoretical knowledge is not enough to know the ins and outs ofSafta treaty & trade agreement. When we have prepared this report, we

The two leaders signed agreements

on closer economic ties


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have learned vast about economics, India-Bangladesh relationship etc.

These help us to gather more information.

So, we are preparing a report on Safta treaty & trade agreement to

develop clear knowledge about it.

2.2 Problems and purposes:

Why we are going to make a report on Safta treaty and recent

trade agreement between India and Bangladesh what are the

benefits of it?

The key factors that act as purposes of this report are given below:

1. Implementation of these agreements.

2. Relationship between India and Bangladesh.

3. Economic condition South Asian region.

4. Create mutual contact on various issues.

5. Develop economy condition.

2.3 Scope of the report:

1. Focus point is to observe the economic condition of South Asian

region.

2. Trade relationship between India &Bangladesh.

3. Whether these agreements are effective for us or not.

2.4 Methodology:

This is a descriptive report. This report includes secondary data. And the

secondary data have been collected from various publication related

websites, articles, magazines etc. These data have been collected through

convenience sampling technique. As this is a qualitative research, we

have only analyzed the qualitative aspects of the data. In this study, thereis no quantitative analysis.


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Collection of Data:

2.5 Limitations:

There are limitations in making this report. Those limitations are given

below:

1. Access to information

2. Access to resources

3. Time management

4. Access to experts for editing, proof reading, and guidance

5. Lack of funds

3.0 Report Body

Sources of Data:

Secondary

Techniques:

Various publication(paper

publication, website)


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SAARC Preferential Trading Arrangement

(SAPTA)

SAPTA and its begining

In December 1991, the Sixth Summit held in Colombo approved the

establishment of an Inter-Governmental Group (IGG) to formulate an

agreement to establish a SAARC Preferential Trading Arrangement

(SAPTA) by 1997. Given the consensus within SAARC, the Agreement on

SAPTA was signed on 11 April 1993 and entered into force on 7 December

1995 well in advance of the date stipulated by the Colombo Summit. The

Agreement reflected the desire of the Member States to promote and

sustain mutual trade and economic cooperation within the SAARC region

through the exchange of concessions.

The basic principles underlying SAPTA are:

Overall reciprocity and mutuality of advantages so as to benefit

equitably all Contracting States, taking into account their respective level

of economic and industrial development, the pattern of their external

trade, and trade and tariff policies and systems;

Negotiation of tariff reform step by step, improved and extended insuccessive stages through periodic reviews;


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Recognition of the special needs of the Least Developed Contracting

States and agreement on concrete preferential measures in their favor;

and

Inclusion of all products, manufactures and commodities in their raw semi-

processed and processed forms.

Four rounds of trade negotiations have been concluded under SAPTA

covering over 5000 commodities. Each Round contributed to an

incremental trend in the product coverage and the deepening of tariff

concessions over previous Rounds.

Working sector under SAFTA

Bangladesh is working on downsizing the sensitive list by 246 items

for the least developed countries (LDCs) and 248 ones for the non-LDCs

under the SAFTA (South Asian Free Trade Area) pact, trade officials said.

"We have in principle decided to shorten the sensitive list. But

everything will depend on negotiations and approaches taken by

other members of the regional trade bloc at a meeting to be held

in Nepal this month," a Ministry of Commerce (MoC) official told

the FE Thursday seeking anonymity.

Dhaka has 1,233 products on the sensitive list for the LDCs and 1241 for

the non-LDCs under the trade liberalization agreement, implying that such

products from other SAFTA member-countries care required to pay duty to

enter the Bangladesh market.

The Working Group on Reduction of the sensitive list under the SAFTA will

meet on September 20-22 to discuss the issue.

"We will go forward for reducing the number of items from the listbased on others' approach," said the MoC official.

According to him, the list of products, likely to be given duty-free access,

has been chosen, based on consultations held with the stakeholders

several times. The Bangladesh Tariff Commission (BTC) has finalized the

list recently.

Of the SAARC member countries, India has 480 items on the sensitive list

for the LDCs and 868 for the non-LDCs, Bhutan has 150 items for both theLDCs and non-LDCs, Nepal has 1257 for the LDCs and 1295 for the non-


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LDCs, the Maldives has 681 for both, Pakistan has 1169, Sri Lanka has

1042 and Afghanistan has 1072 items on the negative list.

In the second meeting of the working group held in March this year, the

parties to the pact agreed to reduce the number of items from thesensitive list by 20 per cent from November, 2011.

They are also committed to implementing the Trade LiberalizationProgrammed (TLP) for products taken out of the sensitive lists from

January 1, 2012.

However, Nepal has requested to extend the date of implementation for it

until August 1 next year.

The member-states under the pact are to reduce their sensitive lists of the

tariff lines, considering the request of other contracting states.

Bhutan does not require shortening its sensitive list but would consider

requests, if any, from other SAARC member-states.

"It the negotiation in Kathmandu becomes successful, we will

send the list to the cabinet for approval. After the cabinet's

approval of the list, the items will be desisted from the sensitive

list,"the MoC official added.

He said most member-sates of the SAFTA prefer to grant duty-free market

access of products on the basis of bilateral arrangement.

India on August 06 announced to grant duty and quota-free access of 46

Bangladeshi apparel items to its market under a bilateral arrangement.

Statistics show that the intra-SAARC trade under the SAFTA arrangement

has reached US$1.1 billion mark last February, since launching of the

trade liberalization programmed in July, 2006.


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Relations between Bangladesh and other SAARC countries

Bangladesh has exported goods worth $399.60 million between 2007

and 2010 under the SAFTA, while India's export during the period reached

$604.95 million and that of Sri Lanka, $1.18 million.

Bangladesh's export to Pakistan under the SAFTA arrangementbetween 2006 and 2010 reached $94.79 million and to the Maldives,

$0.014 million during the period.

Trade officials said the negative list of SAFTA comprises 53 per cent

of the total trade among the SAARC member-states and that is why their

intra-regional trade is not expanding.

He said unless the relatively more developed economies among the

SAARC member-states agree to cut down the negative list, fullimplementation of the agreement would not produce the desired results.

Statistics show that Bangladesh had no exports to Afghanistan,

Bhutan and the Maldives during the July, 2006-December, 2010 period

under the SAFTA arrangement.

It exported goods worth $342.87 million to India, $56.39 million to

Pakistan and $0.26 million to Sri Lanka.

India and Bangladesh have signed five agreements includingtreaties on tackling cross-border crime and combating terrorism.

The agreements were signed on the first day of Bangladesh PrimeMinister Sheikh Hasina's official visit to India.

They included a pledge by Delhi to provide a $1bn credit to improveBangladesh's infrastructure.


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The announcement was made after Sheikh Hasina met her Indiancounterpart, Manmohan Singh.

Officials say that much of the money provided by India will be usedfor improving Bangladesh's railway network and dredging the rivers

shared between the two countries.

Sheikh Hasina assured the Indians that Bangladesh would not allowits soil to be used by groups "inimical to India".

'Strong relations'

Ties between the two have improved after Sheikh Hasina's AwamiLeague-led government came to power last year.

Nearly 200 fighters belonging to rebel groups in Assam and Tripurahave fled the crackdown in Bangladesh and some have alreadysurrendered.

"We are confident that this visit would serve to underlinethat strong India-Bangladesh relations are vital, not just for bothour countries, but for the entire region and the internationalcommunity,"Indian Foreign Secretary Nirupama Rao said.

Sheikh Hasina met Mr Singh and ruling Congress party Chief SoniaGandhi on Monday. On Tuesday she received the Indira Gandhi Prize forPeace, Disarmament and Development.

She said that she was deeply honored to receive the prize andthanked the Indian president, prime minister and Mrs Gandhi.

"This most prestigious prize also greatly honors my country andpeople,"Sheikh Hasina said.

Correspondents say the two countries still have a range of contentious

issues to resolve ranging from the sharing of river waters to demarcationof a maritime boundary in the Bay of Bengal.

Bangladesh and India share more than 50 rivers but Bangladesh believesit is not getting enough water, as India has built a number of damsupstream.

The dispute over the maritime border is important as it is believed thatthere may be vast gas and oil deposits in the Bay of Bengal.


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Bangladesh's Foreign Minister Dipu Moni told the BBC that the countrywas prepared to go the UN if bilateral negotiations failed to solve themaritime boundary dispute.

TRADE AGREEMENTBETWEEN INDIA AND BANGLADESH

The Government of the Republic of India and the Government of

the Peoples Republic of Bangladesh, being conscious of the urge of theirtwo peoples to enlarge areas of mutual co-operation; desirous ofexpanding trade and strengthening economic relations between the twocountries on the basis of equality and mutual benefit; have agreed asfollows:

Article I

The two Governments recognizing the need and requirement of eachother in the context of their developing economies undertake to exploreall possibilities, including economic and technical cooperation, forpromotion, facilitation, expansion and diversification of trade between thetwo countries on the basis of equality and mutual benefit.

Article II

The two Governments agree to take appropriate measures inaccordance with the evolving international trading system for mutualbenefit of developing countries and least developed countries in so far as

such measures are consistent with their individual, present and futuredevelopment, financial and trade facilitation.

Article III

The two Governments agree that expansion of their mutual tradeexchanges would make an important contribution towards theirdevelopment. To this end, they agree to take appropriate and specialmeasures during periodic reviews taking into account the asymmetriesbetween the two countries with a view to augmenting and diversifyingtheir mutual trade especially in respect of specific products as may beagreed upon.


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Article IV

All payments and charges in connection with trade between the twocountries shall continue to be effected in freely convertible currencies inaccordance with the foreign exchange regulations in force in each countryfrom time to time.

Article V

Imports and exports of commodities and goods produced ormanufactured in India or Bangladesh, as the case may be, shall bepermitted in accordance with the import, export and foreign exchangelaws, regulations Dt. 22/03/2006 Page 2 of 3 and procedures in force ineither country from time to time taking into account asymmetriesbetween the two countries.

Article VI

Each Government shall accord to the commerce of the country of the

other Government, treatment no less than that accorded to the commerceof any third country.

Article VII

The provisions of Article VI shall not prevent the grant or continuance of:-

a) Privileges which are or may be granted by either of the twoGovernments in order to facilitate frontier trade by separateagreement(s);

b) Advantages and privileges which are or may be granted by either of therespective neighboring countries;

c) Advantages resulting from any customs union, a free trade area orsimilar arrangements which either of the two Governments has concludedor may conclude in the future.

d) Advantages or preferences accorded under any scheme for expansionof trade and economic cooperation among developing countries, which is

open for participation by all developing countries, and to which either ofthe two Governments is or may become a party.


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Article VIII

The two Governments agree to make mutually beneficial arrangementsfor the use of their waterways, roadways and railways for commercebetween the two countries for passage of goods between two places inone country through the territory of the other.

Article IX

Each Government will grant merchant vessels of the other country whileentering, putting off and lying at its ports the most-favored-nationtreatment accorded by their respective laws, rules and regulations to thevessels under the flag of any third country.Both the Governments agree on the basis of shippers preference, toutilize to the maximum extent possible, the vessels owned/chartered byshipping organizations of the two countries concerned for shippingcargoes imported or exported under this Agreement at competitive freightrates.

Article X

The two Governments agree to cooperate effectively with each other toprevent infringement and circumvention of the laws, rules and regulationsof either country in regard to matters relating to foreign exchange andforeign trade.

Article XI

The two Governments agree to accord, subject to their respective laws

and regulations, reasonable facilities for the holding of trade fairs andexhibitions and visits of business and trade delegations sponsored by theGovernment concerned.

Article XII

In order to facilitate the implementation of this Agreement, the twoGovernments shall consult each other at least once in a year or earlier as


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and when necessary, and shall review the working of the Agreement withspecial attention to the asymmetries between the two countries.

Article XIII

This amended Agreement shall come into force on the 1st April, 2006. Itshall remain in force for a period of three years. It may be extended by afurther period of three years by mutual consent subject to suchmodifications as may be agreed upon.Done in New Delhi, on the 21st March, 2006, in two original copies, each inHindi, Bangle and English, all the texts being equally authentic. In case ofdifference, the English text shall prevail.

(Kamal Nath) (M. Saifur Rahman)Minister of Commerce and Industry Minister for Finance & PlanningGovernment of the Republic of India Government of PeoplesRepublic of Bangladesh

India-Bangladesh Relations

Indias links with Bangladesh are civilization, cultural, social and

economic. There is much that unites the two countries a shared history

and common heritage, linguistic and cultural ties, passion for music,

literature and the arts. With Bangladesh, India shares not only a common

history of struggle for freedom and liberation but also enduring feelings of

both fraternal as well as familial ties. This commonality is reflected in

multi-dimensional relations with Bangladesh at several levels of

interaction. High-level exchanges, visits and meetings take place regularly

alongside the wide ranging people-to-people interaction. Indias Missions


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in Bangladesh issue about half a million visas every year and thousands of

Bangladeshi students study in India on self-financing basis and over 100

annual GOI scholarships.

Recent High Level Contacts

Vice President of India Shri M Hamid Ansari accompanied by

MOS(EA) Mrs. Preneet Kaur, two MPs and official & media delegation

visited Dhaka on May 5-6, 2011 for the inaugural ceremony of joint

celebration of the 150th birth anniversary of Rabindra Nath Tagore.

During the visit, Vice President held talks with President Zillur Rahman

and PM Sheikh Hasina, Foreign Dipu Moni and Leader of Opposition

Begum Khaleda Zia called on him.

Prime Minister of Bangladesh Sheikh Hasina accompanied by a

123-member delegation that included Ministers of Foreign Affairs and

Water Resources, Advisers and a 50-member strong business contingent

paid a State visit to India from January 10-13, 2010. The visit was very

successful and gave both countries a historic opportunity to build a new

and forward looking relationship. On January 12, 2010 Bangladesh Prime

Minister Sheikh Hasina was conferred the prestigious Indira Gandhi Prize

for Peace, Disarmament and Development for 2009. The Prime Ministers

of the two countries agreed to put in place a comprehensive framework ofcooperation for development of the two countries based on their mutually

shared vision for the future. A Joint Communiqu issued during the visit

outlined various initiatives. Shri Pranab Mukherjee, Finance Minister

visited Dhaka on August 7, 2010 to witness the signing of the US$ 1 billion

Line of Credit Agreement between EXIM Bank of India and Government of

Bangladesh.

Smt. Sonia Gandhi, President, INC and Chairman, UPA visited

Dhaka on July 24-25, 2011 to receive the Bangladesh Freedom Honour

conferred on Smt. Indira Gandhi for her unique role and contribution tothe Liberation War and birth of Bangladesh. In the forenoon of July 25, she

attended the inaugural session of an International Conference on Autism

spectrum disorders & developmental disabilities as Chief Guest. Smt.

Gandhi also had meetings with PM Sheikh Hasina and Bangladesh

President during the visit.

Home Minister Shri P. Chidambaram visited Bangladesh on July 29-

30,2011 for delegation level talks with his counterpart Ms. Sahara Khatunon all issues of mutual interest. He also met Foreign Minister Dr. Dipu


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Moni and called on PM Sheikh Hasina on July 30, 2011. A Coordinated

Border Management Plan between BSF and BGB was signed by the DGs of

the border guarding forces on July 30 during the visit.

Minister for Overseas Indian Affairs and Civil Aviation Vayalar Ravi

visited Dhaka on April 19-21, 2011 for the 4th Colombo Process Ministerial

Conference on overseas employment and labor migration. MOIA&CA met

his Bangladesh Counterparts and discussed issues of mutual interest

during the visit. Commerce and Industry Minister Anand Sharma visited

Bangladesh on April 22-23, 2011 and held meetings with BD leadership,

including Prime Minister Sheikh Hasina and Commerce Minister Faruk

Khan. Foreign Secretary Smt. Nirupama Rao visited Dhaka on June 6-8,

2011 for Foreign Office Consultations and held discussions with herBangladesh counterpart on the entire gamut of bilateral issues. She called

on Prime Minister and Foreign Minister on July 7, 2011.

External Affairs Minister Shri SM Krishna visited Bangladesh on 6-8

July, 2011 and held bilateral talks with his counterpart Dr. Dipu Moni. He

also called on President and Prime Minister of Bangladesh. Protocols of

Exchange on the Instruments of Ratification of the bilateral agreement on

the protection and promotion of investments between India andBangladesh were signed on July 7. Document relating to Standard

Operating Procedure for monitoring of entry/exit of Bhutanese vehicles

between Indian LCSs and Bangladesh LCSs was also signed during the

visit.

PM had a bilateral meeting with PMSH in April on the margins of

16th SAARC Summit in Thimphu and EAM met Foreign Minister of

Bangladesh Dr. Dipu Moni in New York in September 2010. FinanceMinisters visit to Dhaka in August 2010, FM Dr. Dipu Monis visit to

Tripura in November 2010, Commerce Minister of Bangladeshs visits to

New Delhi in October and Kolkata in December 2010 and visits by the

Advisers of Prime Minister Sheikh Hasina, in addition to a number of other

crucial visits have helped both sides to pursue bilateral agenda. After the

new Government took office following General Elections in Bangladesh on

December 29, 2008, Shri Pranab Mukherjee, then EAM paid an official visit

to Dhaka on February 9, 2009. Two agreements on trade and bilateral

investment promotion and protection were signed. Shri Somnath

Chatterjee, Honble Speaker, Lok Sabha visited Dhaka from February 21-


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23, 2009 to address the Members of Bangladesh Parliament at the

opening ceremony of Parliamentary Orientation Program for 9th Jatiya

Sangsad.

A 24-member Parliamentary Friendship Group with Bangladesh

has been constituted in the Indian Parliament with Shri Sameer Magan

Bhujbal, MP(NCPLS) as its President in June 2011. The Bangladesh side has

been requested to share composition of a similar group for contacts and

exchanges. An eight member parliamentary delegation led by Jatiya

Sangsad Speaker Mr. Abdul Hamid visited India for attending the Fifth

SAARC Speakers and Parliamentarians Conference on July 9-12, 2011 at

the invitation of Lok Sabha Speaker Smt. Meira Kumar.

Security and Border management:

Security remains a key area of bilateral cooperation. The two

countries concluded Agreements on mutual legal assistance in criminal

matters; transfer of sentenced persons and combating international

terrorism, organized crime & illicit drug trafficking. Home Secretary Level

talks and Joint Working Group Meeting were held in Dhaka on January 18-

20, 2011 where both sides discussed all issues related to security and

border management. The Second DG-level Talks between the Narcotics

Control Agencies of the two countries were held in Dhaka on March 23-24,

2011.

Fig: Bangladesh-India Border


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Boundary issues:

Indias border with Bangladesh is 4,096 km. It is the longest border

that India has with any of its neighbors. The Fourth Joint Boundary

Working Group (JBWG) met in New Delhi on 10-11 November 2010 and

discussed all outstanding land boundary issues with a view to arriving at a

comprehensive solution. Joint Survey in Adversely Possessed Lands and

Joint Headcount in enclaves are being held in compliance of the decisions

taken at the 4th JBWG. The Joint Headcount in enclaves of India and

Bangladesh was conducted from July 15-18, 2011 by joint teams of

supervisors and enumerators from India and Bangladesh. The Joint Survey

in Adverse Possessions of both countries has also almost been completed.

Sharing of River Waters

India and Bangladesh share 54 common rivers. The Ganga Waters

Treaty was signed on December 12, 1996 for water sharing of river Ganga

during lean season (January 1-May 31). The 37th Joint Rivers Commission

(JRC) meeting was held in New Delhi from March 17-20, 2010. Water

Resources Secretarylevel meeting took place in Dhaka on January 10,

2011 which discussed interim water sharing arrangements in respect of

Teesta and Feni rivers and water sharing of six other common rivers. A

three member delegation led by BD Water Resources Secretary visitedIndia on June 5-6, 2011 to hold further discussions on water related issues.

Bilateral Trade

Bangladesh is an important trading partner for India. The two-way

trade in FY 2010-2011 was US$5.099 billion with Indias exports to

Bangladesh accounting for US$ 4.586 billion and imports US $ 0.512

million. The trade between the two countries in the last 5 years is as

follows: (Figures in US$ million) 05-06 06-07 07-08 08-09 09-10 10-11

Indias exports 1864.70 2268.00 3364.00 2841.06 3202 4586.8 Indias

imports 241.96 289.42 358.08 276.58 305 512.5 Total trade 2106.70

2557.40 3722.08 3117.64 3507 5099.3 Source: Bangladesh Bank/EPB

Note: FY is July to June

Institutional Mechanisms


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Some of the important institutional mechanisms that meet

periodically to discuss bilateral issues include Joint Rivers Commission

(JRC) and Joint Economic Commission (JEC) at Ministerial level, Foreign

Office Consultations, Home, Commerce and Water Resources Secretary

level talks, BSF-BDR DG level border coordination conference, JointWorking Group on Security (JWG), Joint Boundary Working Group (JBWG),

Joint Working Group on Trade (JWG), Joint Group of Customs Officials

(JGC), Protocol Renewal Committee and Standing Committee to review

implementation of Protocol on Inland Water Transit and Trade, and Inter-

Governmental Railway Meeting. A Joint Group of Customs Meeting was

held on January 18-19, 2011 in Dhaka wherein inter alia Standard

Operating Procedure for movement of trucks was discussed. 13th meeting

of the Standing Committee under India-Bangladesh Protocol on Inland

Water Transit & Trade was held in Kolkata on January 23-24, 2011. 14th

Meeting of the BIWTA was held in Goa wherein the bilateral protocol was

renewed for one year till March 31, 2012.

Indias Economic Assistance to Bangladesh

On the economic assistance side, India has extended a line of credit

ofUS$1 billion to Bangladesh for a range of projects, including railway

infrastructure, supply of BG locomotives and passenger coaches,

procurement of buses, and dredging projects. The Line of CreditAgreement was signed in Dhaka on August 7, 2010 between EXIM Bank of

India and Government of Bangladesh. India has stood by Bangladesh in its

hour of need with aid worth over Taka 250 crore (over US $ 37 million) to

help it cope with natural disasters and floods in 2007-08 including supply

of 1,000 MT of skimmed milk powder, and 40,000 MT of rice. India is

constructing 2,800 core shelters in the affected villages in Bagerhat

district in southern Bangladesh. The first batch of core shelters have been

handed over to Bangladesh at Sharonkhola, Bagerhat on July 9, 2011 thus

facilitating rehabilitation of over 1600 families.

Technical Cooperation


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Scholarships and training programmers under ITEC, TCS of

Colombo Plan, ICCR, AYUSH, Commonwealth, SAARC and IOR-ARC

scholarships/fellowship schemes are being offered to Bangladesh

nationals. India offers 100 slots under ITEC and 35 slots under Technical

Cooperation Scheme of Colombo Plan every year to Bangladesh. In thelast three years (2006-07 to 2009-10), 414 participants from Bangladesh

have undergone training in India under ITEC Programme and Technical

Cooperation Scheme of Colombo Plan. Muktijoddha Scholarship Scheme

extended by the Government of India to Higher Secondary-level

students(200 scholarships) and Graduate-level students (478

scholarships). So far three Bangladesh Diplomats have been imparted

training at Foreign Service Institute, New Delhi in 2011.

Cultural Exchanges

Given the shared history and commonality of language, cultural

exchanges form an important bond of friendship between the people of

two countries. Special emphasis has been laid on promotion of exchanges

in the fields of music, theatre, art, painting, books, etc. A bilateral Cultural

Exchange Programmed (CEP) 2009-2012 provides the framework for such

exchanges. To promote bilateral cultural exchanges, the Indira Gandhi

Cultural Centre (IGCC) of Indian Council for Cultural Relations was

inaugurated at Dhaka on March 11, 2010. Secretary, Ministry of Culturevisited Bangladesh from December 19-22, 2010 and Bangladesh Culture

Secretary visited India on April 6-8, 2011 for holding talks on joint

celebrations of 150th anniversary of Rabindranath Tagore. The joint

inaugural ceremonies were held in Dhaka on 6 May and New Delhi on 7

May 2011 and year-long celebrations are underway. In order to promote

people to people exchanges, hundred (100) scholarships are being

granted by ICCR every year to students from Bangladesh for pursuing

general courses in arts, sciences, engineering and also specialized courses

for culture, drama, music, fine arts and sports, etc. During Bangladesh PMSheikh Hasinas visit in January 2010, India has offered to provide 300

scholarships annually for five years to students from Bangladesh for

studying and training in Universities and training institutions in India.

AGREEMENT ON SOUTH ASIAN FREE TRADE AREA

(SAFTA)


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The Governments of the SAARC (South Asian Association for Regional

Cooperation) Member States comprising the People's Republic of

Bangladesh, the Kingdom of Bhutan, the Republic of India, the Republic of

Maldives, the Kingdom of Nepal, the Islamic Republic of Pakistan and the

Democratic Socialist Republic of Sri Lanka hereinafter referred to as"Contracting States"

Motivated by the commitment to strengthen intra-SAARC economic

cooperation to maximize the realization of the region's potential for trade

and development for the benefit of their people, in a spirit of mutual

accommodation, with full respect for the principles of sovereign equality,

independence and territorial integrity of all States;

Noting that the Agreement on SAARC Preferential Trading Arrangement

(SAPTA) signed in Dhaka on the 11th of April 1993 provides for theadoption of various instruments of trade liberalization on a preferential

basis;

Convinced that preferential trading arrangements among SAARC Member

States will act as a stimulus to the strengthening of national and SAARC

economic resilience, and the development of the national economies of

the Contracting States by expanding investment and production

opportunities, trade, and foreign exchange earnings as well as the

development of economic and technological cooperation;

Aware that a number of regions are entering into such arrangements to

enhance trade through the free movement of goods;

Recognizing that Least Developed Countries in the region need to be

accorded special and differential treatment commensurate with their

development needs; and

Recognizing that it is necessary to progress beyond a Preferential

Trading Arrangement to move towards higher levels of trade and

economic cooperation in the region by removing barriers to cross-borderflow of goods;

Have agreed as follows:


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Article - 1

Definitions

For the purposes of this Agreement:

1. Concessions mean tariff, para-tariff and non-tariff concessions agreed

under the Trade Liberalization Programmed;

2. Direct Trade Measures mean measures conducive to promoting

mutual trade of Contracting States such as long and medium -term

contracts containing import and supply commitments in respect of specific

products, buy-back arrangements, state trading operations, and

government and public procurement;

3. Least Developed Contracting State refers to a Contracting State

which is designated as a "Least Developed Country" by the United

Nations;

4. Margin of Preference means percentage of tariff by which tariffs are

reduced on products imported from one Contracting State to another as a

result of preferential treatment.

5. Non-Tariff Measures include any measure, regulation, or practice,

other than "tariffs" and "Para tariffs".

6. Para-Tariffs mean border charges and fees, other than "tariffs", onforeign trade transactions of a tariff-like effect which are levied solely on

imports, but not those indirect taxes and charges, which are levied in the

same manner on like domestic products. Import charges corresponding to

Article - 2

Establishment

Article - 3

Objectives and Principles specific services rendered are not considered as

para-tariff measures;

7. Products mean all products including manufactures and commodities

in their raw, semi processed and processed forms;

8. SAPTA means Agreement on SAARC Preferential Trading Arrangement

signed in Dhaka on the 11th of April 1993;

9. Serious injury means a significant impairment of the domestic

industry of like or directly competitive products due to a surge in


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preferential imports causing substantial losses in terms of earnings,

production or employment unsustainable in the short term;

10. Tariffs mean customs duties included in the national tariff schedules

of the Contracting States;

11. Threat of serious injury means a situation in which a substantial

increase of preferential imports is of a nature to cause "serious injury" to

domestic producers, and that such injury, although not yet existing, is

clearly imminent. A determination of threat of serious injury shall be

based on facts and not on mere allegation, conjecture, or remote or

hypothetical possibility. The Contracting States hereby establish the South

Asian Free Trade Area (SAFTA) to promote and enhance mutual trade and

economic cooperation among the Contracting States, through exchanging

concessions in accordance with this Agreement.

1. The Objectives of this Agreement are to promote and enhance mutual

trade and economic cooperation among Contracting States by, inter-alia:

a) Eliminating barriers to trade in, and facilitating the cross-border

movement of goods between the territories of the Contracting States;

b) promoting conditions of fair competition in the free trade area, and

ensuring equitable benefits to all Contracting States, taking into account

their respective levels and pattern of economic development;

c) Creating effective mechanism for the implementation and application of

this Agreement, for its joint administration and for the resolution of

disputes; and

d) Establishing a framework for further regional cooperation to expand

and enhance the mutual benefits of this Agreement.

2. SAFTA shall be governed in accordance with the following principles:

a) SAFTA will be governed by the provisions of this Agreement and also by

the rules, regulations, decisions, understandings and protocols to be

agreed upon within its framework by the Contracting States;

b) The Contracting States affirm their existing rights and obligations with

respect to each other under Marrakesh Agreement Establishing the World

Trade Organization and other

Treaties/Agreements to which such Contracting States are signatories;

c) SAFTA shall be based and applied on the principles of overall reciprocity

and mutuality of advantages in such a way as to benefit equitably all


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Contracting States, taking into account their respective levels of economic

and industrial development, the pattern of

Article - 4

Instruments

Article - 5

National Treatment

Article - 6

Components

Article - 7

Their external trade and tariff policies and systems;

d) SAFTA shall involve the free movement of goods, between countries

through, inter alia, the elimination of tariffs, para tariffs and non-tariff

restrictions on the movement of goods, and any other equivalent

measures;

e) SAFTA shall entail adoption of trade facilitation and other measures,

and the progressive harmonization of legislations by the Contracting

States in the relevant areas; and

f) The special needs of the Least Developed Contracting States shall be

clearly recognized by adopting concrete preferential measures in their

favor on a non-reciprocal basis.

The SAFTA Agreement will be implemented through the following

instruments:-

1. Trade Liberalization Programmed

2. Rules of Origin

3. Institutional Arrangements

4. Consultations and Dispute Settlement Procedures

5. Safeguard Measures

6. Any other instrument that may be agreed upon.

Each Contracting State shall accord national treatment to the products of

other Contracting States in accordance with the provisions of Article III of

GATT 1994.


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SAFTA may, inter- alia, consist of arrangements relating to:

a) Tariffs;

b) Para-tariffs;

c) Non- tariff measures;

d) Direct trade measures.

Trade Liberalization Programmed

Article - 8

Additional Measures

1. Contracting States agree to the following schedule of tariff reductions:

a) The tariff reduction by the Non-Least Developed Contracting States

from existing tariff rates to 20% shall be done within a time frame of 2

years, from the date of coming into force of the Agreement. Contracting

States are encouraged to adopt reductions in equal annual installments. If

actual tariff rates after the coming into force of the Agreement are below

20%, there shall be an annual reduction on a Margin of Preference basis of

10% on actual tariff rates for each of the two years.

b) The tariff reduction by the Least Developed Contracting States from

existing tariff rates will be to 30% within the time frame of 2 years from

the date of coming into force of the agreement. If actual tariff rates on the

date of coming into force of the Agreement are below 30%, there will be

an annual reduction on a Margin of Preference basis of 5 % on actual tariff

rates for each of the two years.

c) The subsequent tariff reduction by Non-Least Developed Contracting

States from 20% or below to 0-5% shall be done within a second time

frame of 5 years, beginning from the third year from the date of coming

into force of the Agreement. However, the period of subsequent tariffreduction by Sri Lanka shall be six years. Contracting States are

encouraged to adopt reductions in equal annual installments, but not less

than 15% annually.

d) The subsequent tariff reduction by the Least Developed Contracting

States from 30% or below to 0-5% shall be done within a second time

frame of 8 years beginning from the third year from the date of coming

into force of the Agreement. The Least Developed Contracting States are

encouraged to adopt reductions in equal annual installments, not less

than 10% annually.


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2. The above schedules of tariff reductions will not prevent Contracting

States from immediately reducing their tariffs to 0-5% or from following an

accelerated schedule of tariff reduction.

3. a) Contracting States may not apply the Trade Liberalization

Programmed as in paragraph 1

Above, to the tariff lines included in the Sensitive Lists which shall be

negotiated by the Contracting States (for LDCs and Non -LDCs) and

incorporated in this Agreement as an integral part. The number of

products in the Sensitive Lists shall be subject to maximum ceiling to be

mutually agreed among the Contracting States with flexibility to Least

Developed Contracting States to seek derogation in respect of the

products of their export interest; and

b) The Sensitive List shall be reviewed after every four years or earlier as

may be decided by SAFTA Ministerial Council (SMC), established under

Article 10, with a view to reducing the number of items in the Sensitive

List.

4. The Contracting States shall notify the SAARC Secretariat all non- tariff

and para-tariff measures to their trade on an annual basis. The notified

measures shall be reviewed by the Committee of Experts, established

under Article 10, in its regular meetings to examine their compatibility

with relevant WTO provisions. The Committee of Experts shall recommendthe elimination or implementation of the measure in the least trade

restrictive manner in order to facilitate intra SAARC trade1.

5. Contracting Parties shall eliminate all quantitative restrictions, except

otherwise permitted under GATT 1994, in respect of products included in

the Trade Liberalization Programmed.

6. Notwithstanding the provisions contained in paragraph 1 of this Article,

the Non-Least Developed Contracting States shall reduce their tariff to 0-

5% for the products of Least Developed Contracting States within atimeframe of three years beginning from the date of coming into force of

the Agreement.

Article - 9

Extension of Negotiated Concessions

Article - 10

Institutional Arrangements


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Contracting States agree to consider, in addition to the measures set out

in Article 7, the adoption of trade facilitation and other measures to

support and complement SAFTA for mutual benefit.

These may include, among others: -

a) Harmonization of standards, reciprocal recognition of tests and

accreditation of testing laboratories of Contracting States and certification

of products;

b) Simplification on and harmonization of customs clearance procedure;

c) Harmonization of national customs classification based on HS coding

system;

d) Customs cooperation to resolve dispute at customs entry points;

e) Simplification and harmonization of import licensing and registration

procedures;

f) Simplification of banking procedures for import financing;

g) Transit facilities for efficient intra-SAARC trade, especially for the land-

locked Contracting States;

h) Removal of barriers to intra-SAARC investments;

i) Macroeconomic consultations;

j) Rules for fair competition and the promotion of venture capital;

k) Development of communication systems and transport infrastructure;

l) Making exceptions to their foreign exchange restrictions, if any, relating

to payments for

products under the SAFTA scheme, as well as repatriation of such

payments without prejudice to their rights under Article XVIII of theGeneral Agreement on Tariffs and Trade (GATT) and the relevant

provisions of Articles of Treaty of the International Monetary Fund (IMF);

and

m) Simplification of procedures for business visas. Concessions agreed to,

other than those made exclusively to the Least Developed Contracting

States, shall be extended unconditionally to all Contracting States.

1. The Contracting States hereby establish the SAFTA Ministerial Council

(hereinafter referred to as SMC).


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2. The SMC shall be the highest decision -making body of SAFTA and shall

be responsible for the administration and implementation of this

Agreement and all decisions and arrangements made within its legal

framework.

3. The SMC shall consist of the Ministers of Commerce/Trade of the

Contracting States.

4. The SMC shall meet at least once every year or more often as and when

considered necessary by the Contracting States. Each Contracting State

shall chair the SMC for a period of one year on rotational basis in

alphabetical order.

5. The SMC shall be supported by a Committee of Experts (hereinafter

referred to as COE), with one nominee from each Contracting State at the

level of a Senior Economic Official, with expertise in trade matters.

6. The COE shall monitor, review and facilitate implementation of the

provisions of this Agreement and undertake any task assigned to it by the

SMC. The COE shall submit its report to SMC every six months.

7. The COE will also act as Dispute Settlement Body under this

Agreement.

8. The COE shall meet at least once every six months or more often as

and when considered necessary by the Contracting States. EachContracting State shall chair the COE for a period of

Article - 11

Special and Differential Treatment for the Least Developed

Contracting States

Article - 12

Special Provision for Maldives

One year on rotational basis in alphabetical order.

9. The SAARC Secretariat shall provide secretarial support to the SMC and

COE in the discharge of heir functions.

10. The SMC and COE will adopt their own rules of procedure. In addition

to other provisions of this Agreement, all Contracting States shall provide

special and more favorable treatment exclusively to the Least Developed

Contracting States as set out in the following sub-paragraphs:


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a) The Contracting States shall give special regard to the situation of the

Least Developed Contracting States when considering the application of

anti-dumping and/or countervailing measures. In this regard, the

Contracting States shall provide an opportunity to Least Developed

Contracting States for consultations. The Contracting States shall, to theextent practical, favorably consider accepting price undertakings offered

by exporters from Least Developed Contracting States. These constructive

remedies shall be available until the trade liberalization programmed has

been completed by all Contracting States.

b) Greater flexibility in continuation of quantitative or other restrictions

provisionally and without discrimination in critical circumstances by the

Least Developed Contracting States on imports from other Contracting

States.

c) Contracting States shall also consider, where practical, taking direct

trade measures with a view to enhancing sustainable exports from Least

Developed Contracting States, such as long and medium-term contracts

containing import and supply commitments in respect of specific

products, buy-back arrangements, state trading operations, and

government and public procurement.

d) Special consideration shall be given by Contracting States to requests

from Least Developed Contracting States for technical assistance and

cooperation arrangements designed to assist them in expanding theirtrade with other Contracting States and in taking advantage of the

potential benefits of SAFTA. A list of possible areas for such technical

assistance shall be negotiated by the Contracting States and incorporated

in this Agreement as an integral part.

e) The Contracting States recognize that the Least Developed Contracting

States may face loss of customs revenue due to the implementation of the

Trade Liberalization Programmed under this Agreement. Until alternative

domestic arrangements are formulated to address this situation, the

Contracting States agree to establish an appropriate mechanism to

compensate the Least Developed Contracting States for their loss of

customs revenue. This mechanism and its rules and regulations shall be

established prior to the commencement of the Trade Liberalization

Programmed (TLP). Notwithstanding the potential or actual graduation of

Maldives from the status of a Least Developed Country, it shall be

accorded in this Agreement and in any subsequent contractual

undertakings thereof treatment no less favorable than that provided for

the Least Developed Contracting States.

Article - 13


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Non-application

Article - 14

General Exceptions

Article - 15

Balance of Payments Measures

Notwithstanding the measures as set out in this Agreement its provisions

shall not apply in relation to preferences already granted or to be granted

by any Contracting State to other Contracting States outside the

framework of this Agreement, and to third countries through bilateral,

plurilateral and multilateral trade agreements and similar arrangements.

a) Nothing in this Agreement shall be construed to prevent anyContracting State from taking action and adopting measures which it

considers necessary for the protection of its national security.

b) Subject to the requirement that such measures are not applied in a

manner which would constitute a means of arbitrary or unjustifiable

discrimination between countries where the similar conditions prevail, or a

disguised restriction on intra-regional trade, nothing in this Agreement

shall be construed to prevent any Contracting State from taking action

and adopting measures which it considers necessary for the protection of:

(i) Public morals;

(ii) Human, animal or plant life and health; and

(iii) Articles of artistic, historic and archaeological value.

1. Notwithstanding the provisions of this Agreement, any Contracting

State facing serious balance of payments difficulties may suspend

provisionally the concessions extended under this Agreement.

2. Any such measure taken pursuant to paragraph 1 of this Article shall be

immediately notified to the Committee of Experts.

3. The Committee of Experts shall periodically review the measures taken

pursuant to paragraph 1 of this Article.

4. Any Contracting State which takes action pursuant to paragraph I of

this Article shall afford, upon request from any other Contracting State,

adequate opportunities for consultations with a view to preserving the

stability of concessions under SAFTA.


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5. If no satisfactory adjustment is effected between the Contracting States

concerned within 30 days of the beginning of such consultations, to be

extended by another 30 days through mutual consent, the matter may be

referred to the Committee of Experts.

6. Any such measures taken pursuant to paragraph 1 of this Article shall

be phased out soon after the Committee of Experts comes to the

conclusion that the balance of payments situation of the Contracting State

concerned has improved.

Article - 16

Safeguard Measures

Article - 17

Maintenance of the Value of Concessions

Article - 18

Rules of Origin

1. If any product, which is the subject of a concession under this

Agreement, is imported into the territory of a Contracting State in such a

manner or in such quantities as to cause, or threaten to cause, serious

injury to producers of like or directly competitive products in the importing

Contracting State, the importing Contracting State may, pursuant to aninvestigation by the competent authorities of that Contracting State

conducted in accordance with the provisions set out in this Article,

suspend temporarily the concessions granted under the provisions of this

Agreement. The examination of the impact on the domestic industry

concerned shall include an evaluation of all other relevant economic

factors and indices having a bearing on the state of the domestic industry

of the product and a causal relationship must be clearly established

between "serious injury" and imports from within the SAARC region, to the

exclusion of all such other factors.

2. Such suspension shall only be for such time and to the extent as may

be necessary to prevent or remedy such injury and in no case, will such

suspension be for duration of more than 3 years.

3. No safeguard measure shall be applied again by a Contracting State to

the import of a product which has been subject to such a measure during

the period of implementation of Trade Liberalization Programmed by the

Contracting States, for a period of time equal to that during which such

measure had been previously applied, provided that the period of non-application is at least two years.


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4. All investigation procedures for resorting to safeguard measures under

this Article shall be consistent with Article XIX of GATT 1994 and WTO

Agreement on Safeguards

5. Safeguard action under this Article shall be non-discriminatory and

applicable to the product imported from all other Contracting States

subject to the provisions of paragraph 8 of this Article.

6. When safeguard provisions are used in accordance with this Article, the

Contracting State invoking such measures shall immediately notify the

exporting Contracting State(s) and the Committee of Experts.

7. In critical circumstances where delay would cause damage which it

would be difficult to repair, a Contracting State may take a provisional

safeguard measure pursuant to a preliminary determination that there is

clear evidence that increased imports have caused or are threatening to

cause serious injury. The duration of the provisional measure shall not

exceed 200 days, during this period the pertinent requirements of this

Article shall be met.

8. Notwithstanding any of the provisions of this Article, safeguard

measures under this article shall not be applied against a product

originating in a Least Developed Contracting State as long as its share of

imports of the product concerned in the importing Contracting State does

not exceed 5 per cent, provided Least Developed Contracting States withless than 5% import share collectively account for not more than 15% of

total imports of the product concerned. Any of the concessions agreed

upon under this Agreement shall not be diminished or nullified, by the

application of any measures restricting trade by the Contracting States,

except under the provisions of other articles of this Agreement.

Article - 19

Consultations

Article - 20

Dispute Settlement Mechanism

Rules of Origin shall be negotiated by the Contracting States and

incorporated in this Agreement as an integral part.

1. Each Contracting State shall accord sympathetic consideration to and

will afford adequate opportunity for consultations regarding

representations made by another Contracting State with respect to any

matter affecting the operation of this Agreement.


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2. The Committee of Experts may, at the request of a Contracting State,

consult with any Contracting State in respect of any matter for which it

has not been possible to find a satisfactory solution through consultations

under paragraph 1.

1. Any dispute that may arise among the Contracting States regarding the

interpretation and application of the provisions of this Agreement or any

instrument adopted within its framework concerning the rights and

obligations of the Contracting States will be amicably settled among the

parties concerned through a process initiated by a request for bilateral

consultations.

2. Any Contracting State may request consultations in accordance with

paragraph 1 of this Article with other Contracting State in writing stating

the reasons for the request including identification of the measures atissue. All such requests should be notified to the Committee of Experts,

through the SAARC Secretariat with an indication of the legal basis for the

complaint.

3. If a request for consultations is made pursuant to this Article, the

Contracting State to which the request is made shall, unless otherwise

mutually agreed, reply to the request within 15 days after the date of its

receipt and shall enter into consultations in good faith within a period of

no more than 30 days after the date of receipt of the request, with a view

to reaching a mutually satisfactory solution.

4. If the Contracting State does not respond within 15 days after the date

of receipt of the request, or does not enter into consultations within a

period of no more than 30 days, or a period otherwise mutually agreed,

after the date of receipt of the request, then the Contracting State that

requested the holding of consultations may proceed to request the

Committee of Experts to settle the dispute in accordance with working

procedures to be drawn up by the Committee.

5. Consultations shall be confidential, and without prejudice to the rightsof any Contracting State in any further proceedings.

6. If the consultations fail to settle a dispute within 30 days after the date

of receipt of the request for consultations, to be extended by a further

period of 30 days through mutual consent, the complaining Contracting

State may request the Committee of Experts to settle the dispute. The

complaining Contracting State may request the Committee of Experts to

settle the dispute during the 60-day period if the consulting Contracting

States jointly consider that consultations have failed to settle the dispute.


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7. The Committee of Experts shall promptly investigate the matter

referred to it and make recommendations on the matter within a period of

60 days from the date of referral.

8. The Committee of Experts may request a specialist from a Contracting

State not party to the dispute selected from a panel of specialists to be

established by the Committee within one year from the date of entry into

force of the Agreement for peer review of the matter referred to it. Such

review shall be submitted to the Committee within a period of 30 days

from the date of referral of the matter to the specialist.

Article - 21

Withdrawal

Article - 22

Entry into Force

Article - 23

Reservations

9. Any Contracting State, which is a party to the dispute, may appeal the

recommendations of the Committee of Experts to the SMC. The SMC shall

review the matter within the period of 60 days from date of submission of

request for appeal. The SMC may uphold, modify or reverse therecommendations of the Committee of Experts.

10. Where the Committee of Experts or SMC concludes that the measure

subject to dispute is inconsistent with any of the provisions of this

Agreement, it shall recommend that the Contracting State concerned

bring the measure into conformity with this Agreement. In addition to its

recommendations, the Committee of Experts or SMC may suggest ways in

which the Contracting State concerned could implement the

recommendations.

11. The Contracting State to which the Committee's or SMC's

recommendations are addressed shall within 30 days from the date of

adoption of the recommendations by the Committee or SMC, inform the

Committee of Experts of its intentions regarding implementation of the

recommendations. Should the said Contracting State fail to implement the

recommendations within 90 days from the date of adoption of the

recommendations by the Committee, the Committee of Experts may

authorize other interested Contracting States to withdraw concessions

having trade effects equivalent to those of the measure in dispute.


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1. Any Contracting State may withdraw from this Agreement at any time

after its entry into force. Such withdrawal shall be effective on expiry of

six months from the date on which a written notice thereof is received by

the Secretary-General of SAARC, the depositary of this Agreement. That

Contracting State shall simultaneously inform the Committee of Experts ofthe action it has taken.

2. The rights and obligations of a Contracting State which has withdrawn

from this Agreement shall cease to apply as of that effective date.

3. Following the withdrawal by any Contracting State, the Committee shall

meet within 30 days to consider action subsequent to withdrawal.

1. This Agreement shall enter into force on 1st January 2006 upon

completion of formalities, including ratification by all Contracting States

and issuance of a notification thereof by the SAARC Secretariat. This

Agreement shall supersede the Agreement on SAARC Preferential Trading

Arrangement (SAPTA).

2. Notwithstanding the super cession of SAPTA by this Agreement, the

concessions granted under the SAPTA Framework shall remain available to

the Contracting States until the completion of the Trade Liberalization

Programmed. This Agreement shall not be signed with reservations, nor

will reservations be admitted at the time of notification to the SAARC

Secretariat of the completion of formalities.

Article - 24

Amendments

This Agreement may be amended by consensus in the SAFTA Ministerial

Council. Any such amendment will become effective upon the deposit of

instruments of acceptance with the Secretary General of SAARC by all

Contracting States.

Article 25

Depository

This Agreement will be deposited with the Secretary General of SAARC,

who will promptly furnish a certified copy thereof to each Contracting

State.


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IN WITNESS WHEREOF the undersigned being duly authorized thereto

by their respective Governments have signed this Agreement.

DONE in ISLAMABAD, PAKISTAN, On This The Sixth Day Of the Year Two

Thousand Four, In Nine Originals In The English Language All Texts Being Equally

Authentic. M. MORSHED KHAN Minister for Foreign Affairs People's Republic ofBangladesh NADO RINCHHEN Officiating Minister for Foreign Affairs Kingdom of

Bhutan YASHWANT SINHA Minister of External Affairs Republic of India FATHULLA

JAMEEL Minister of Foreign Affairs Republic of Maldives DR. BHEKH B. THAPA

Ambassador-at-large for Foreign Affairs His Majesty's Government of Nepal

KHURSHID M. KASURI Minister of Foreign Affairs Islamic Republic of Pakistan

TYRONNE FERNANDO Minister of Foreign Affairs Democratic Socialist Republic of

Sri Lanka 1The initial notification shall be made within three months from the

date of coming into force of the Agreement and the COE shall review the

notification in its first meeting and take appropriate decisions.

Prime Minister Manmohan Singh's historic visit toBangladesh

Prime Minister Manmohan Singh on Tuesday left on a two-dayvisit to Bangladesh that is expected to put the bumpy bilateral ties in anew trajectory through signing of deals in a range of sectors includingextradition of sentenced persons, connectivity, power, exchange ofenclaves and border management.However, the visit has been clouded by the uncertainty over the signing ofan accord on sharing of waters ofTeesta River following strongreservations expressed by West Bengal Chief Minister Mamata Banerjeewho pulled out of the visit.Diplomatic sources said the two countries were also considering signing ofa long-term framework agreement for forging close bilateral relations.
http://indiatoday.intoday.in/story/mamata-banerjee-refuses-to-accompany-pm-to-dhaka/1/150112.htmlhttp://indiatoday.intoday.in/story/mamata-banerjee-government-teesta-deal/1/150192.htmlhttp://indiatoday.intoday.in/story/mamata-banerjee-refuses-to-accompany-pm-to-dhaka/1/150112.htmlhttp://indiatoday.intoday.in/story/mamata-banerjee-government-teesta-deal/1/150192.html


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Bangladesh and India had signed a 25-year Treaty of Friendship,Cooperation and Peace on March 19, 1972. The two governments,however, declined to renegotiate or renew the treaty when it expired in1997. The framework of agreement, the sources said, will provide astructure, and identify priorities of the relationship.

PM's agenda In a statement on the eve of his departure for Dhaka, Singhput security, boundary issues, water resources, power connectivity,improvement of border infrastructure, trade facilitation and economiccooperation on his agenda in Bangladesh and said efforts would be madeto sustain and build upon the "positive momentum".

During his visit, Singh would hold talks with his Bangladesh counterpartSheikh Hasina, call on President Zillur Rahman and hold meetings withopposition leaders Begum Khaleda Zia and Jatiya Party chief HussainMuhammed Ershad, the former military dictator.

Agreements on land boundary, water resources, market access and powerpurchase are crucial for Bangladesh while transit and security are primeconcerns of India. Giving security cooperation a leg-up, an extradition pactis likely to be inked by the two sides in the presence of Singh and Hasinaafter their talks in Dhaka on Wednesday.

Top ULFA leader Anup Chetia, now in Bangladesh after having served hissentence, could be the first to send back to India under the new accord.

Likely MoUs, agreements the two countries were likely to signagreements, protocols, and memorandums of understanding (MoUs) onwithdrawal of water from Feni River by India for a drinking water projectand a 20-year agreement on purchase of 250 megawatt power byBangladesh from India at a preferential rate. Bangladesh might purchaseanother 250 MW power at the international market rate.

The two countries were likely to sign a package protocol under the 1974Mujib-Indira Land Boundary Agreement which will deal with five legacyissues -- exchange of enclaves and adversely possessed land,demarcation of 6.5 km of un-demarcated border, allowing Bangladeshis touse "Tin Bigha Corridor" for 24 hours, and finalisation of a strip map.

A likely MoU on trade liberalization will allow duty-free entry of several ofthe 61 Bangladeshi products, most of them garments, to India. This will besigned under the Trade Agreement between the two countries.

First visit by Indian PM in 12 yearsThe maiden bilateral visit by Singh, the first by an Indian prime minister in


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12 years, aims at consolidating the process set in motion during thelandmark visit of Hasina to India in January, 2010, to craft new paradigmrelations, said Foreign Secretary Ranjan Mathai ahead of the visit.

A protocol on Protection of Royal Bengal Tiger in the Sundarbans was also

likely to be inked. Besides, the two countries might sign an MoU onPreservation of Biodiversity in the Sundarbans.

Bangladesh and India were also likely to sign MoUs on cooperation onrenewable energy, telecast of programmed of Doordarshan and state-owned BTV, cooperation in fisheries sector and cooperation betweenDhaka University and Jawaharlal Nehru University in New Delhi.

CMs form part of PM's delegationIn a statement prior to his departure for Dhaka, the prime minister saidIndia's partnership with Bangladesh was important for the stability andprosperity of north-eastern states. He was accompanied by chief ministers

of four north-eastern states -- Assam, Tripura, Meghayala and Mizoram --on his trip to Dhaka.

An accord on allowing transit to Nepal through Rohanpur (ChapaiNawabganj) in Bangladesh and Singabad in India might also be signed.

There was also the possibility of signing of an agreement on railwayconnectivity between Akhaura and Agartala, alignment construction ofwhich is nearing completion.

India's pressing issue of transit was expected to be signed under existingTrade Agreement between the two countries. Under it, three separateprotocols on use of Chittagong and Mongla seaports of Bangladesh androads and railway were on the cards.

Both the countries would make arrangements for the use of theirwaterways, roadways and railways for commerce between the twocountries for passage of goods between mainlands India to its north-eastern states through Bangladeshi territory.

Report about Manmohan Singhs visit in Bangladesh in a Indias

newspaper:

New Delhi, Sep 5: Prime Minister Dr. Manmohan Singh embarked onhis first ever visit as the head of government to Bangladesh today.

Accompanying Dr. Singh on the two-day visit are External Affairs MinisterS. M. Krishna, Water Resources Minister Pawan Kumar Bansal, ChiefMinister of Assam -Tarun Gogoi, Chief Minister of Tripura - Manik Sarkar,Chief Minister of Meghalaya - Mukul Sangma and Chief Minister ofMizoram - Lal Thanhawla.

The agreements expected to be signed during the Prime Minister's visitare: Water-sharing agreements on the Teesta and Feni Rivers, import of


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electricity from India, a historic land boundary agreement. Several MoUson fisheries, renewable energy, and power generation and tradeliberalization and access to goods.

The most important and path breaking deal is the one involving land

transfer. India is to hand over 111 enclaves to Bangladesh and in returnget 51 enclaves. This is a historic confidence building measure that couldimprove the lives of thousands of people of Indian and Bangladeshi origintrapped in villages on the border since its creation in 1971. India's long-standing request of transit through Bangladesh is also likely to be metduring this visit. (ANI)

4.0 Conclusion:

The agreements expected to be signed during the Prime Minister's visitare: Water-sharing agreements on the Teesta and Feni Rivers, import ofelectricity from India, a historic land boundary agreement. Several MoUson fisheries, renewable energy, and power generation and tradeliberalization and access to goods.

Diplomatic sources said the two countries were also considering signing ofa long-term framework agreement for forging close bilateral relations.Bangladesh and India had signed a 25-year Treaty of Friendship,Cooperation and Peace on March 19, 1972. The two governments,

however, declined to renegotiate or renew the treaty when it expired in


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1997. The framework of agreement, the sources said, will provide astructure, and identify priorities of the relationship.

PM's agenda in a statement on the eve of his departure for Dhaka, Singhput security, boundary issues, water resources, power connectivity,

improvement of border infrastructure, trade facilitation and economiccooperation agenda in Bangladesh and said efforts would be made tosustain and build upon the "positive momentum".

The two countries were likely to sign a package protocol under the 1974Mujib-Indira Land Boundary Agreement which will deal with five legacyissues -- exchange of enclaves and adversely possessed land,demarcation of 6.5 km of un-demarcated border, allowing Bangladeshis touse "Tin Bigha Corridor" for 24 hours, and finalisation of a strip map.

Though Teesta deal is not signed, it is possible to sign this deal in future if

two countries continue its relationship. And we think we will get moreopportunity to develop our economy through more deal between two

countries in future.

Overall reciprocity and mutuality of advantages so as to benefit

equitably all Contracting States, taking into account their respective level

of economic and industrial development, the pattern of their external

trade, and trade and tariff policies and systems;

Negotiation of tariff reform step by step, improved and extended insuccessive stages through periodic reviews;

Recognition of the special needs of the Least Developed Contracting

States and agreement on concrete preferential measures in their favor;

and

Inclusion of all products, manufactures and commodities in their raw,

semi-processed and processed forms.

Four rounds of trade negotiations have been concluded under SAPTA

covering over 5000 commodities. Each Round contributed to an

incremental trend in the product coverage and the deepening of tariff

concessions over previous Rounds.

5.0 Appended parts

5.1Appendix:

Safta treaty & trade agreement, Information retrievedon September 12, 2011 from http://en.wikipedia.org/wiki

Safta treaty & trade agreement, Information retrieved onSeptember 8, 2011


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From The Prothom Alo

Safta treaty & trade agreement, Information retrieved on

September 8, 2011From The Daily Star

THE END

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