SAFTA AND NAFTA

Presentstion on SAFTA and NAFTA

1. NAFTA SAFTA

2. The  South Asian Free Trade Area  ( SAFTA ) is an agreement reached on 6 January 2004 at the 12th SAARC summit in Islamabad, Pakistan. It created a free trade area of 1.6 billion people.(as of 2011, the combined population is 1.8 billion people). The seven foreign ministers of the region signed a framework agreement on SAFTA to reduce customs duties of all traded goods to zero by the year 2016.

3. History The Agreement on SAARC Preferential trading Arrangement (SAPTA )  was signed on 11 April 1993 and entered into force on 7 December 1995, with the desire of the Member States of SAARC to promote and sustain mutual trade and economic cooperation within the SAARC region through the exchange of concessions . The establishment of an Inter-Governmental Group (IGG) to formulate an agreement to establish a SAPTA by 1997 was approved in the  Sixth Summit of SAARC  held in Colombo in December 1991.

4. Trade Restriction Under Safta

5. Purpose of agreement The purpose of SAFTA is to encourage and elevate common contract among the countries such as medium and long term contracts. Contracts involving trade operated by states, supply and import assurance in respect of specific products etc. It involves agreement on tariff concession like national duties concession and non-tariff concession.

6. The main objective of the agreement is to promote competition in the area and to provide equitable benefits to the countries involved. It aims to benefit the people of the countries by bringing transparency and integrity among the nations. SAFTA was also formed in order to increase the level of trade and economic cooperation among the SAARC nations by reducing the tariff and barriers and also to provide special preference to the Least Developed Countries (LDCs)among the SAARC nations.

7. Instrument Following are the instrument involved in SAFTA:- Trade Liberalisation Programme Rules of Origin Institutional Arrangements Consultations and Dispute Settlement Procedures Safeguard Measures Any other instrument that may be agreed upon .

8. Trade Liberalisation According to the Trade Liberalisation Programme Contracting countries must follow the following tariff reduction schedule. There should be a fall to 20% tariff from the existing tariff by the Non Least Developing Countries and 30% reduction from the existing tariff by the Least Developing Countries. But trade liberalisation scheme is not to be applied for the sensitive list because this list is to be negotiated among the contracting countries and then to be traded .

9. NAFTA The  North American Free Trade Agreement  ( NAFTA ) is an agreement signed by Canada, Mexico, and the United States, creating a trilateral  trade bloc in North America. The agreement came into force on January 1, 1994 .  It superseded the Canada–United States Free Trade Agreement between the U.S. and Canada.

10. Negotiation and U.S. ratification Following diplomatic negotiations dating back to 1990 among the three nations, U.S. President George H. W. Bush, Canadian Prime Minister Brian Mulroney and Mexican President Carlos Salinas  signed the agreement in their respective capitals on December 17, 1992 .  The signed agreement was then ratified by each nation's legislative or parliamentary branch.

11. The goal of NAFTA was to eliminate barriers to trade and investment between the U.S., Canada and Mexico. The implementation of NAFTA on January 1, 1994 brought the immediate elimination of tariffs on more than one-half of Mexico's exports to the U.S. and more than one-third of U.S. exports to Mexico. Within 10 years of the implementation of the agreement, all U.S.-Mexico tariffs would be eliminated except for some U.S. agricultural exports to Mexico that were to be phased out within 15 years.Most U.S.-Canada trade was already duty-free. NAFTA also sought to eliminate non-tariff trade barriers and to protect the intellectual property rights on traded products.

12. Intellectual property The North American Free Trade Agreement Implementation Act made some changes to the copyright law of the United States, foreshadowing the Uruguay Round Agreements Act of 1994 by restoring copyright (within the NAFTA nations) on certain motion pictures which had entered the public domain. Environment Securing U.S. congressional approval for NAFTA would have been impossible without addressing public concerns about NAFTA’s environmental impact .  The Clinton administration negotiated a side agreement on the environment with Canada and Mexico, the North American Agreement on Environmental Cooperation (NAAEC), which led to the creation of the Commission for Environmental Cooperation (CEC) in 1994. To alleviate concerns that NAFTA, the first regional trade agreement between a developing country and two developed countries.

13. Agriculture From the earliest negotiation, agriculture was (and still remains) a controversial topic within NAFTA, as it has been with almost all free trade agreements that have been signed within the WTO framework. Agriculture is the only section that was not negotiated trilaterally; instead, three separate agreements were signed between each pair of parties. The Canada–U.S. agreement contains significant restrictions and tariff quotas on agricultural products (mainly sugar, dairy, and poultry products), whereas the Mexico–U.S. pact allows for a wider liberalization within a framework of phase-out periods (it was the first North–South FTA on agriculture to be signed).

14. Transportation infrastructure NAFTA established the CANAMEX Corridor for road transport between Canada and Mexico, also proposed for use by rail, pipeline, and fiber optic telecommunications infrastructure. This became a High Priority Corridor under the U.S. Intermodal Surface Transportation Efficiency Act of 1991.

15. Economic Impact In the years since NAFTA, U.S. trade with its North American neighbors has more than tripled, growing more rapidly than U.S. trade with the rest of the world. Canada and Mexico are the two largest destinations for U.S. exports, accounting for more than a third of the total. Most estimates conclude that the deal had a modest but positive impact on U.S. GDP of less than 0.5 percent, or a total addition of up to $80 billion dollars to the U.S. economy upon full implementation, or several billion dollars of added growth per year.

16. The Effect of NAFTA on Exports and Job The North American Free Trade Agreement (NAFTA), which the United States implemented with Canada and Mexico in 1994, has benefited Americans substantially, according to U.S. government data. It has increased exports, expanded U.S. agriculture, improved environmental standards at home and abroad, and given Americans higher-paying jobs. Yet critics of free Trade continue to assert the opposite: that NAFTA has resulted in fewer U.S. exports, cost American jobs, and jeopardized the environment. The data clearly refute these claims.