One of the main objectives of ECO is promotion of trade and investment among its member countries. In pursuance of this objective, the organization has laid down necessary regulatory framework for investment opportunities and initiated measures towards progressive removal of trade barriers within the region and expansion of intra and inter-regional trade and investment trends. 

While striving for the liberalization and promotion of trade and investment, the following strategy is being followed: 

i)        Removal of tariff and non-tariff barriers in the region, providing a regulatory and enabling environment for trade

ii)      Develop a favorable regulatory investment framework for optimum utilization of economic resources

iii)    Increasing the interaction of private sector 

            New policy guidelines were formulated by the 1^st Ministerial Meeting on Commerce/Foreign Trade, held in March 2000 in Tehran, for boosting cooperation among the member states. ECO Framework Agreement on Trade Cooperation was signed in that meeting. This agreement laid down the basic principles of cooperation in the Iran, Pakistan, Tajikistan and Turkey in Islamabad in July 2003.  So far, Afghanistan, Pakistan, Tajikistan and Turkey have ratified the Agreement field of trade and envisaged the launching of ECO Trade Agreement (ECOTA) for progressive removal of non-tariff barriers as well as gradual reduction of tariffs in the region. 

            ECOTA is the main vehicle for removal of trade barriers and establishment of Free Trade Area in the region by 2015.  It was signed by five member states namely; Afghanistan, and Iran has nearly completed the process.  This agreement will enter into force on the 30^th day after the date of receipt of the instrument of ratification, from the five Contracting Parties. 

            ECOTA is comprehensive in terms of commodity coverage, will be implemented gradually over a period of 8 years and will reduce tariffs to a maximum of 15 percent over 80 percent of the goods traded. The new HLEG on Trade, Investment, and Other Related Matters met in January 2004 in Ankara and agreed on a resolution for preparation of a Protocol on Fast Track Approach for the early implementation of ECOTA, by reducing the highest tariff slab from 15 percent to 10 percent over a period of 5 years instead of 8 years. In this regard, the 2^nd High Level Expert Group (HLEG) meeting on Trade, Investment, and Other Related Matters (Islamabad, March 17-19, 2005) finalized the draft text of the said Protocol. However, due to some reservations/principles emerged during the 3^rd HLEG meeting (Istanbul, July 5, 2005), the said Protocol was not signed by the member states. The 4^th HLEG meeting (Kabul, 9-10 November 2005) proposed a new formulation for Principles on the Protocol of Fast Track Approach, which could not be finalized by the three member states due to difference of opinion. 

            The Third Ministerial Meeting on Commerce/Foreign Trade (Istanbul, July 7, 2005) approved a Protocol for the annexure of ECOTA on; (i) Rules of Origin, (ii) Anti-Dumping Measures, (iii) State Aid, (iv) Intellectual Property Rights. The said Protocol was signed by four signatory members to ECOTA, i.e. Afghanistan, Iran, Pakistan, and Turkey. In brief, finalization and compilation of annexure of ECOTA is an urgent necessity in early implementation and application of tariff concessions under the provisions of ECOTA. Realization of provisions of ECOTA will be a major step towards the establishment of Free Trade Area in the ECO region by 2015 as envisaged in the ECO vision 2015, adopted during the 15^th Council of Ministers (COM) meeting (Astana, October 01, 2005) and stressed upon by the 16^th and 17^th Council of Ministers (COM) held in Baku and Herat in 2006 and 2007 respectively. 

            An Expert Group Meeting on Trade Capacity Building of ECO Member States was held at the ECO Secretariat in collaboration with United Nations Industrial Development Organization (UNIDO) on 18-19 December 2007.  After thorough deliberations, the EGM formulated recommendations on removal of Non-Tariff Barriers, upgrading the quality standards of products and strengthening of institutions for preparing Member States to implement ECOTA. 

Afghanistan, Azerbaijan, and Turkey signed Agreement on Promotion and Protection of Investment (APPI) during the 3^rd ECO Ministerial Meeting on Commerce/Foreign Trade (Istanbul, 7 July 2005). The 2^nd Ministerial Meeting on Finance and Economy held on April 05-07, 2007 in Turkey approved the amendment of Article 9, Para 7 (iii) of the Agreement and welcomed the Islamic Republic of Iran and the Islamic Republic of Pakistan for their readiness to sign the APPI.  The Secretariat has already requested the signatory member states to ratify and other member states to become party to APPI by signing and ratifying it as soon as possible. The APPI envisages for common policy and common action for attracting investment in the ECO region and it would come into force upon signature/ratification of four ECO member states. 

            Policy guidelines for boosting cooperation among the member states in the field of finance and economy were formulated in the 1^st Ministerial Meeting of Finance and Economy held on January 29-30, 2004.  The holding of 2^nd Ministerial Meeting on Finance and Economy, 1^st meeting of High Level Experts Group (HLEG) on Finance and Economy (April 2007) and the 1^st meeting of the Heads of Central Banks (April 23-24, 2007) were helpful in boosting cooperation among the member states according to the policy guidelines set forth by the Ministers of Finance and Economy.  The 3^rd Ministerial Meeting on Finance and Economy, 2^nd HLEG and the 2^nd Meeting of the Heads of Central Banks of ECO Member States are scheduled to be held in Iran in 2008.            

            Institutionalization of the Business Forum as a mechanism for improving relations between private sectors of the member states can greatly contribute to the enhancement of trade and economic activities among the member states.  The 2^nd ECO Business Forum and Buyers/Sellers Meeting on Construction Materials were held at Istanbul, Turkey on October 24-25, 2007 under the 2^nd Phase of ECO-ITC Project on Expansion of Intra-regional Trade.  The head of Pakistan’s delegation offered to host the second component of the project by undertaking activities, i.e. Buyers/Sellers Meeting on Auto Parts Industry and Business Forum in Pakistan during 2008. 

            Cooperation in the field of customs has been continued since 1994 but it has now been re-institutionalized in the form of Council of heads of Customs Administration (CHCA) since 2000.  So far six meetings of the said Council have been held in 2001, 2002, 2004, 2005, 2006 and in 2007.  In all these meetings major steps have been taken towards the strengthening of customs cooperation among the member states of ECO.  In the 4^th CHCA meeting held in Baku, Azerbaijan in May 2005, it was decided to establish a Sub Committee of Experts to consider/prioritize and act on the recommendations of the UNDP Consultant Report on harmonization and simplification of customs organizations and procedures of the ECO member states.  The said Sub Committee held its 1^st meeting in Istanbul, Turkey in July 2006, during the 5^th CHCA meeting, and prioritized the special needs of the member states.  The Council decided that the Sub Committee of Experts shall be convened on permanent basis in order to give expert advice to the CHCA on different customs issues, including the Transit Trade. The 2^nd meeting of the Committee was held on 26-27 September 2007 during the 6^th CHCA and 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 7^th CHCA to be held in Pakistan in 2008. 

The Agreement on establishment and operation of ECO Smuggling and Customs Offences Data Bank, approved by the 3^rd Ministerial Meeting on Commerce and Foreign Trade has been signed, so far, by six member countries, i.e. Afghanistan, Azerbaijan, Iran, Pakistan, Tajikistan and Turkey.  The Agreement will come into force after its ratification by four Member States.

            Within the framework of private sector promotion, there is an urgent need to follow the effective implementation and further updating/expanding the scope of the agreement on simplification of visa procedures for the businesspersons of the Member States to further facilitate the contact and communication among the citizens of the Member States. Therefore, finalization of Agreement on Simplification of Visa Procedures for the Businessmen of the Member States needs to be expedited. The Secretariat in collaboration with Iran as the coordinator country of this Agreement is working for its’ early operationalization.  The 1^st Experts Group Meeting (EGM) was held in ECO Secretariat on 4-5 September 2006.  Draft Additional Protocol and revised Action Plan prepared by the Islamic Republic of Iran and ECO Secretariat have already been circulated to member states, for views and comments, which is to be expedited.  Second Meeting of the Experts Group is scheduled to be held on January 8-9, 2008 in Tehran has to be postponed for lack of quorum.   

The establishment and operationalization of ECO Trade and Development Bank is one of the most important steps towards trade facilitation in the region.  The 1^st Meeting of the Board of Governors (BOG) of the Bank was held in Ankara, Turkey on July 6, 2006.  Republic of Turkey was elected as the first Chairman of the Board of Governors and major steps were taken towards the operationalization of the bank.  The 2^nd Meeting of the Board of Governors was held on October 6, 2006 in which the President of the Bank has been appointed and each founding member paid its initial subscribed capital of 20 million SDR.  The BOG resolved that the remaining total amount of the subscribed capital of 240 million SDR (80 million SDR for each member) shall be paid in 5 equal consecutive installments in July each year (amounting to 16 million SDR each year for each member).  It was also decided that the annual meetings of the BOG will be held in July each year.  The 3^rd Meeting of the Board of Governors was held on July 3, 2007 and major steps were taken towards the full operationalization of the Bank.

            The establishment of ECO Reinsurance Company as per the MoU signed in March 1995 will supplement the existing reinsurance services in the region and will promote growth of the national underwriting and retention capacities.  It will minimize the outflow of foreign exchange from the region and support the economic activities in the region. 

            The Trilateral Committee formed to pave the way for its establishment, held its last meeting in May 2007, in Islamabad and finalized/initialed its Articles of Agreement to be signed in its coming meeting.  The representatives of Member States had decided that the Heads of Insurance Organizations will soon meet to sign the Agreement.  The Secretariat is pursuing with the three member states to agree on a consensus date for the said meeting. 

            In order to promote investment and encourage involvement of private sector in the region, the 1^st, 2^nd and 3^rd ECO Regional Investment Conferences were held.  The 3^rd Trade and Investment Conference was last held in Kabul, Afghanistan on 9-10 November 2005.  This Conference provided a good opportunity to focus for creating an enabling environment for smooth promotion of trade and investment in ECO region, in Afghanistan in particular and ECO member states in general.   

            ECO Chambers of Commerce and Industry has been reactivated after its 7^th General Assembly Meeting in Kabul, Afghanistan in April 2004 and its 10^th Executive Committee meeting held in Kabul on 9-10 November 2005.  This paved the way for increased private sectors involvement to actively participate in the trade promotion activities.  It is the right time to extend all possible cooperation to ECO-CCI.  The decision of the 8^th General Assembly Meeting of ECO-CCI to pass the Chairmanship of ECO-CCI to Turkey with its Secretariat located at Istanbul for a period of three years with effect from 1^st November, 2007, provides a fresh opportunity to involve private sector in the promotion and expansion of intra ECO trade.  

The 2^nd Phase of ECO/ITC project also included activities for re-activation of ECO-CCI aiming it to play a major role for involving and interaction of private sector in the framework of ECO activities.  The project aimed at promoting ECO region’s trade through organizing Buyers/Sellers Meetings and similar activities was jointly sponsored by ECO and State Planning Organization (SPO) of the Republic of Turkey has already been started which also  reflects the confidence and interest of international organization in ECO’s activities.   

            Exchange of updated data/information relating to trade and investment among the ECO member states has gained special significance and ECO has developed an interactive web portal (www.tradeeco.org), which will also give linkages to the websites of the investment and trade promotion agencies of the member states. Nevertheless, the member states shall expedite submission of their inputs/views for the improvement of this website.  The 3^rd Seminar on Trade and Investment in ECO region held in Karachi, Pakistan in 2005 further provided a forum on the exchange of trade related information among the member states through strengthening Focal Points and website.  ECO Secretariat provided necessary guidance/instructions and password to the member states.  They could follow them in maintaining website.  The 17^th RPC should formulate a workable mechanism and a plan of action to ensure timely exchange of trade and investment related information among member states. For re-activation and providing technical assistance in convenient operation of ECO Trade-Net Web Portal, the 120^th Council of Permanent Representation (CPR) authorized ECO Secretary General to select a capable local (Iranian) Company with the cost of US$ 20.00/- for implementation of the project.  The negotiation started between ECO and Iranian local company to sign a contract in this regard.    

            ECO has continued to foster partnership and strengthen its relations with relevant international and regional organizations to secure technical and financial assistance for its endeavors in the field of trade and investment. These organizations inter alia include ADB, ASEAN, ESCAP, ITC, OIC/IDB, UNCTAD, UNDP, UNECE, UNIDO, WCO and WTO. Moreover, implementation of the decisions/agreements reached and the MOUs with international organizations are now closely being reviewed/updated in line with ECO’s new and emerging needs and requirements.  ECO is also being granted observer status by the high profile regional and international organizations.

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