I. ECO Trade Agreement (ECOTA)
ECO Trade Agreement (ECOTA) signed on July 17, 2003, during the 2nd ECO Ministerial Meeting on Commerce and Foreign Trade, is a major step towards realization of the objective of removal of trade barriers and establishment of Free Trade Area in the ECO region by 2015. Under ECOTA, the Contracting Parties have committed to scale down their tariffs to 15% over a period of eight years on 80% of the goods traded. After its ratification by the Islamic Republic of Iran in February 2008, the Agreement came into force in March 2008. The 1st Meeting of the Cooperation Council, the implementing body for the Agreement, was held on May 21-22, 2008 in Mersin, Turkey, which decided to implement the Agreement from 1st January, 2009. It also decided on the finalization of the Negative and Sensitive Lists and designation of the authorities for verification of ECO proof of origin etc.
The 2nd Meeting of the ECOTA Cooperation Council was organized by ECO Secretariat on April 21-22, 2011 in Tehran. However, the meeting remained inconclusive due to disagreement over interpretation of some provisions of the Agreement.
Nonetheless, the 2nd Meeting of the Cooperation Council proved useful in certain aspects. The decision to establish ECOTA Implementation Fund to facilitate provision of technical assistance, coordination of Seminars, Fairs/Exhibitions and similar promotional programmes is considered important for ECOTA implementation.
The 3rd Meeting of the ECOTA Cooperation Council held on 2-3 October, 2012 in Ankara, Turkey, decided that ECOTA Contracting Parties would submit their Positive, Negative and Sensitive Lists to the ECO Secretariat by 15th November 2012 and subsequently the implementation of Tariff Concessions among ECOTA Contracting Parties would commence on 1st January 2013. However, the Contracting Parties (except Turkey) could not submit their ECOTA Lists within the stipulated time. During the Meeting the Republic of Tajikistan agreed in principal to ratify Annexes to the ECOTA by 15th November 2012. The ratification of Annexes by Tajikistan is also awaited.
Since the key decisions of the 3rd Meeting of the Cooperation Council could not be executed by the Contracting Parties, progress has remained stalled on ECOTA tariff implementation. The 12th ECO Summit and 20th Council of Ministers (CoM) Meeting also stressed the need for early implementation of the Agreement. In order to register a forward movement on exchange of ECOTA Lists and implementation of tariff concession, the 4th Meeting of the ECOTA Cooperation Council held on April 23, 2013 in Tehran, the I.R. Iran, decided that Contracting Parties shall submit their ECOTA Lists by September 01, 2013. It may be mentioned that in addition to Turkey, Afghanistan and Pakistan have so far submitted ECOTA Lists. The 5th Meeting of the ECOTA Cooperation Council was held on April 02-03, 2014 in Islamabad, Pakistan. The Sixth Meeting of the Council was held on June 15, 2015 in Ankara, Turkey. The Council in the both Meetings deliberated on the announcement of the date for affectuation and tariff concession under ECOTA and discussed the ratification of the annexes to ECOTA by Tajikistan and submission of Positive, Negative and Sensitive Lists by Tajikistan and Iran.
The implementation of ECOTA stands out as a major step towards promoting regional trade. Beside tangible benefits for the region in the wake of open trade, it will be a launching pad for a broad range of economic activities. Expansion in industrial fields, modernization of technologies, improved transit trade and creation of new business opportunities would be facilitated through greater inflow of investment. Lowering of barriers and removal of inefficiencies in trading system would add up to higher levels of economic growth, reduced unemployment and alleviation of poverty in the region.
This preferential trade agreement offers tremendous opportunities for expansion of regional trade. Simultaneously, the agreement guarantees protecting vital trade interests of the Contracting States. It will be advantageous in the context of enhanced market access. Intra-regional trade will be boosted under a package of customs duty concessions. Accession to ECOTA by all the Member States will have a positive impact on the trade and investment performance of the entire region. It will also help the non WTO Member States in their accession process to that important international trade body.
II. ECO Agreement on Promotion and Protection of Investment (APPI) Among ECO Member States
In accordance with the ECO objectives of promoting investment and encouraging the role of private sector in ECO region, the Agreement on Promotion and Protection of Investment (APPI) in the ECO region was finalized by the 3rd HLEG meeting held in Istanbul on 5 July 2005. The 3rd ECO Ministerial Meeting on Commerce/Foreign Trade (Istanbul, 7 July 2005) approved the said Agreement.
The Second Ministerial Meeting on Finance and Economy held on April 5-7, 2007 at Antalya, Turkey approved the amendment to APPI proposed by Iran in Article 9, Para 7 (iii).
The APPI among ECO Member States have been signed by five ECO Member States namely, Afghanistan, Azerbaijan, Iran, Pakistan and Turkey. So far two ECO Member States namely the Islamic Republic of Iran and the Islamic Republic of Pakistan have ratified the Agreement along with the Amendment Protocol and deposited the Instrument of Ratification. Entry into force of the Agreement requires ratification/deposit of instrument of four Member States.
The enforcement of the APPI could help economies in several ways. The economic and commercial activities would certainly gain momentum with the flow of investments, transfer of technology, new employment opportunities and utilization of raw materials to the optimum level i.e. value addition. The implementation of APPI will particularly be beneficial for increased investments in the Organized Trade Zones (OTZs), Free Trade Zones (FTZs) and Industrial/Export Processing Zones established by the Member States.
III. ECO Agreement on Mutual Administrative Assistance in Customs Matters
The 2nd meeting of the Sub Committee of Experts on Customs held on 26-27 September 2007 during the 6th CHCA, finalized/initialed the Draft ECO Agreement on Mutual Administrative Assistance in Customs Matters. Member States were requested to complete necessary procedures so that the Agreement is signed during the 7th CHCA to be held in Pakistan.
IV. The Agreement on Establishment and Operation of ECO Smuggling and Customs Offences Data Bank
The Agreement on Establishment and Operation of ECO Smuggling and Customs Offences Data Bank, approved by the 3rd Ministerial Meeting on Commerce and Foreign Trade (Istanbul, July 2005) has so far, been signed by six member countries (Afghanistan, Azerbaijan, Iran, Pakistan, Tajikistan and Turkey). The Islamic Republic of Iran, the Islamic Republic of Pakistan and the Republic of Turkey have ratified the Agreement. The Agreement will come into force after its ratification by four Member States.
V. Articles of Agreement of ECO reinsurance Company
The Articles of Agreement of ECO reinsurance Company were signed by three Member States on February 10, 2010. So far two signatories, namely Pakistan and Iran have ratified the Agreement. The Company will be established following the ratification by Turkey and payment of full subscription of share capital by the three contracting member countries.
The objective of the Company is to supplement the existing reinsurance services in the region, promote growth of the national underwriting and retention capacities, minimize the outflow of foreign exchange from the region and to support economic development in the region. The company will serve as a regional centre for collection of insurance and reinsurance information and the development of expertise in the field of insurance and reinsurance.
The establishment of the Company will be another milestone for ECO, as it would facilitate regional trade, increase commercial activities, improve contacts with international institutions and strengthen the insurance sectors particularly, through capacity building/technical assistance of the insurance organizations. It would serve as a regional centre for collection of insurance and reinsurance information and the development of expertise in insurance and reinsurance fields to be put at the disposal of the national insurance and reinsurance markets of the region.