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. 

2.         Regional trade cooperation holds a critical part of the overall objectives of the ECO. The founding fathers of the regional grouping declared trade as the top priority of the organization. In pursuance of this objective, the organization has been laying down necessary regulatory framework for promotion and expansion of intra and inter-regional trade and investment. It has actively spearheaded the agenda of regional integration by taking measures for trade facilitation and progressive removal of trade barriers. The forward movement on various ECO initiatives in the field of trade including the ECO Trade Agreement (ECOTA), establishment of ECO Trade and Development Bank (ECOTDB), reactivation of ECO Chamber of Commerce and Industry (ECO-CCI) and cooperation in Customs matters is now much more pronounced and visible. As visualized by the political leadership, the growing cooperation through these initiatives would set in motion the process of establishing a Free Trade Area in the ECO region by 2015.

3.         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 

4.         Trade and investment liberalization activities/programmes/agreements designed in the ECO region offer valuable mechanisms to achieve larger volumes of trade and investment among the ECO Member States. However, there is an urgent need to implement, harmonize and encourage participation of Member States in such activities in order for establishing a Free Trade Area in the ECO region as determined within the ECO vision 2015, which was adopted during the 15^th Council of Ministers (COM) meeting (Astana, October 01, 2005). 

5.         The 1^st Ministerial Meeting on Commerce/Foreign Trade, held in March 2000 in Tehran laid the foundation by providing policy guidelines for boosting cooperation among the Member States. ECO Framework Agreement on Trade Cooperation was signed in the said meeting. This agreement laid down the basic principles of cooperation in the 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. 

6.         ECOTA, a preferential trade agreement, signed in the 2^nd Ministerial Meeting on Commerce/Foreign Trade (Islamabad, July 2003) offers tremendous opportunities for expansion of regional trade. Simultaneously, the agreement guarantees protecting vital trade interests of the Contracting States. The Agreement 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.  

7.         The High Level Expert Group (HLEG) on Trade, Investment, and Other Related Matters (Ankara, January 2004) adopted 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. The draft text of Protocol was finalized during the 2^nd HLEG on Trade, Investment, and Other Related Matters (Islamabad, March 17-19, 2005). 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 Contracting Parties due to difference of opinion. 

8.         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 a Free Trade Area by 2015 as envisaged in the ECO vision 2015, adopted during the 15^th Council of Ministers (COM) meeting (Astana, October 01, 2005). 

9.         The 1^st Meeting of the ECOTA Cooperation Council (the implementing body for ECOTA) held on May 21-22, 2008 at Mersin, Turkey made significant steps and decided implementation of the Agreement   from 1^st January, 2009. The Contracting Parties agreed to finalize their respective Positive, Negative and Sensitive lists by October 31, 2008. The understanding was also reached on H.S Code for the Tariff lines, Base Year, notifying Para-Tariffs, Laws on Standards and designation of authorities to issue ECO-Proof of Origin.  It also decided that the Draft Protocol on Fast Track Approach to ECOTA may be considered at least one year after its implementation.  The Republic of Turkey offered to host the 2^nd Meeting of Cooperation Council after submission/circulation of the lists of all the Contracting Parties. 

10.       The Government of Tajikistan, in collaboration with ECO Secretariat, had organized a two days Workshop on “Potential Benefits of ECOTA”. The event held on December 5-6, 2008 at Dushanbe, Tajikistan was attended by public and private sector representatives and delegates from ECO member countries. In order to be able to fully comprehend the benefits which ECOTA entails, the concerned authorities of Azerbaijan and Kazakhstan have been requested to consider holding similar Workshops. Kazakhstan has now offered hosting the Workshop on Potential Benefits of ECOTA in Astana during 2009.

11.       An Experts Group Meeting (EGM) on Trade Capacity Building of ECO Member States was held at the ECO Secretariat in collaboration with United Nations Industrial Development Organization (UNIDO) on December 18-19, 2007. The EGM provided an opportunity for the Governmental counterparts of nine Member States to develop further links in trade cooperation and identify existing trade barriers. The event also contributed to developing a consensus on technical programmes on trade capacity building in the field of Standards, Metrology, Testing and Quality (SMTQ) as well as to the development of sustainable trade in the ECO region. The EGM formulated recommendations on removal of Non-Tariff Barriers, identification of compliance and conformity assessment constraints hindering the intra and extra-regional trade performance, upgrading the existing SMTQ-related facilities and strengthening of institutions for preparing Member States to implement ECOTA. 

12.       The 125^th Meeting of the Council of Permanent Representatives (CPR) approved the Strategy to strengthen Trade and Investment Directorate. As endorsed by the CPR, a new forum of Trade Officers Working Group (TOWG) has been established.  It is aimed at developing stronger linkages for serving the larger interest of the trading partners. The TOWG primarily focuses on collection of trade and investment information about the ongoing ECO initiatives and its dissemination through the TOWG Newsletter.

13.       The Islamic Republic of Afghanistan, Republic of Azerbaijan and Republic of Turkey signed Agreement on Promotion and Protection of Investment (APPI) during the 3^rd ECO Ministerial Meeting on Commerce/Foreign Trade (Istanbul, July 2005). The 2^nd Ministerial Meeting on Finance and Economy (Antalya, April 2007) 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.  Later on the Islamic Republic of Iran signed the Agreement on 26^th February, 2008.  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. 

14.       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, 2004 in Islamabad.  The holding of 2^nd Ministerial Meeting on Finance and Economy preceded by the 1^st  HLEG on Finance and Economy(Antalya, April 2007) and  1^st meeting of the Heads of Central Banks (Karachi, April 2007) were helpful in boosting cooperation among the Member States in line with the policy guidelines set forth by the Ministers of Finance and Economy. 

 The 3^rd Ministerial Meeting on Finance and Economy, and 2^nd HLEG were hosted by the Islamic Republic of Iran from December 21-23, 2008 in Tehran which took following decisions:  

• Establishment of a Working Group to study the Global Financial Crisis, its implications for the Member States’ economies and make appropriate recommendations.

• More active cooperation in key areas of the economy, in finance, trade and investment, customs and visa facilitation as well as the fight against corruption and money laundering.
• Expeditious implementation of ECOTA and increased cooperation among Stock and Commodity Exchange Organizations.
• Setting up joint ventures in each others’ countries.
• Expediting signing/ratification of the agreements on promotion of investment, customs cooperation and visa facilitation.
• Welcomed the interest shown by Afghanistan, Azerbaijan and Kazakhstan in joining the ECO Trade Development Bank and encouraged other Member States to join.
• Stressed early establishment and operationalization of the ECO Reinsurance Company.

§         Agreed measures to intensify against Corruption and Money Laundering.

§         Underlined the need for strong cooperation among Private Sectors of the Member States and called on Central Asian member states to spearhead it.

§         Encouraged opening of bank branches in each other countries.

§         Supported increased cooperation in Taxation, capacity-building and avoidance of double taxation.

§         Declared Tajikistan as the Coordinating Country on ECO initiatives concerning investment and requested it to host the 4^th ECO Investment Conference during August 2009. 

15.       Customs plays an important role in regional as well as international trade. Simplification and harmonization of customs system and procedures, necessity of a solid data bank to combat smuggling, illegal trafficking of contrabands and narcotics and trade facilitation particularly, streamlining of transit trade procedures are the main objectives to be achieved through cooperation by regional countries. 

16.       Cooperation in the field of customs has been re-institutionalized in the form of Council of Heads of Customs Administrations (CHCA) since 2000.  So far six meetings of the Council have been held in 2001, 2002, 2004, 2005, 2006 and 2007.  In all these meetings major steps have been taken towards the strengthening of customs cooperation among the Member States.  The 4^th CHCA meeting (Baku, May 2005) decided to establish a Sub Committee of Experts (SCOEs) 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 SCOEs held its 1^st meeting (Istanbul, July 2006) on the sidelines of the 5^th CHCA meeting, and prioritized the special needs of the Member States.  The Council decided that the SCOEs shall be convened on permanent basis in order to give expert advice to the CHCA on different customs issues. 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 2009. So far, the Islamic Republic of Iran and the Republic of Turkey have conveyed their readiness to sign the Agreement. 

17.       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 (Istanbul, July 2005) has so far, been signed by six member countries (Afghanistan, Azerbaijan, Iran, Pakistan, Tajikistan and Turkey).  The Agreement will come into force after its ratification by four Member States. 

18.       The establishment and operationalization of ECO Trade and Development Bank (ETDB) 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 BoG was held on October 6, 2006 in which the President of the Bank was appointed and each founding member paid its initial subscribed capital of 20 million ECO Unit (EU), the currency of the Bank. One EU is equal to one Special Drawing Rights (SDR).  The BoG resolved that the remaining total amount of the subscribed capital of 240 million EU (80 million EU 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). The 5th Meeting of the Board of Governors was held on August 7, 2008 at Esfahan, Iran. It considered the Annual Report of the Bank highlighting concrete steps taken towards becoming a sound and effective multilateral bank.  

19.       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 Islamic Republic of Iran and the Republic of Turkey have conveyed their readiness to sign the Article of Agreement of the Reinsurance Company. The Secretariat is pursuing with the Islamic Republic of Pakistan to indicate a date for hosting the meeting for signing of the Articles. 

20.       Exchange of updated data/information relating to trade and investment among the ECO Member States has gained special significance. In this regard, 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 regional countries. The MOU for reactivation of the Web Portal was signed between the ECO Secretariat and M/s Rahbar Information Services; Tehran on August 10, 2008. The Secretariat in close consultation with the experts of the Company, has already prepared the Templates and Tabs for the Portal. The Web Portal is all set to be launched and made functional through the designated National Focal Points (NFPs). The Member States were requested to nominate NFPs representing the officials of the Ministries of Commerce / Foreign Trade / Trade Promotion Organizations and the organizations responsible for Investment Promotion. On completion of the on-line assessment during the initial phase, Orientation Seminars on ECO Trade & Investment Network will be planned in coordination with the Trade and Investment Promotion Organizations of the Member States. The Seminars of to be hosted by each Member State during  2009 are being designed for imparting specialized training to the NFPs along with 15-20 officials of the relevant ministries / departments. 

21.       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. 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 as the Coordinating Country for the Agreement were circulated to Member States for their views/comments. These were finalized in the 2^nd Meeting of EGM and Working Group held at the Secretariat in August 2008. The 141^st meeting of the Council of Permanent Representatives (CPR) held on November 18, 2008 endorsed the Draft Additional Protocol on Simplification of Visa Procedures for Businessmen and Transit Drivers of ECO Member States and the Revised Plan of Action.  The 18^th Council of Ministers (COM) will consider the Drafts for final approval. 

22.       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 Afghanistan, in particular and ECO Member States in general.   

23.       Realizing the need to accelerate trade and increased inflow of foreign direct investment as a vital factor for economic growth, the ECO has embarked on an agenda of supporting the private sector. A dynamic private sector can supplement efforts to diversify economies, explore new markets, introduce latest technologies in manufacturing processes and establish joint ventures. With this prime objective of bringing the private sector in the forefront of economic development, ECO aims at unifying the efforts and mobilizing resources to meet the challenges of global competition. 

24.       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. The 8^th General Assembly Meeting of ECO-CCI (Istanbul, October 18, 2007) decided 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.  The 9^th General Assembly and 12^th Executive Committee Meeting of ECO-CCI (Karachi, July 24, 2008) made significant progress by adopting the amended Statute of ECO-CCI. The meetings endorsed the proposal of the delegation of Iran for establishment of ECO-CCI Women Entrepreneur Council.

25.       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 in the region.  The 2^nd ECO Business Forum and Buyers/Sellers Meeting on Construction Materials (Istanbul, October 24-25, 2007) were held under the 2^nd Phase of ECO Project on Expansion of Intra-regional Trade. The 3^rd ECO Business Forum and the second component of the Project i.e. Buyers/Sellers Meeting on Auto Industry were held in Karachi, Pakistan on the sidelines of the 2^nd ECO trade Fair from July 23-25, 2008.

26.       The 2^nd ECO Trade Fair was organized at the Karachi Expo Center from July 23-26, 2008. Though participated by three countries i.e. Iran, Kazakhstan and Pakistan, it still turned out to be the biggest event ever organized by the ECO. The Trade Development Authority of Pakistan made elaborate arrangements with excellent display facilities for the participants without any charge. The impressive ECO event, given extensive coverage by print and electronic media proved extremely successful in creating awareness about the ECO as an emerging regional grouping. The Republic of Kazakhstan has offered hosting the 3^rd ECO Trade Fair in Astana during 2009. 

27.       ECO is also in close interaction with the international and regional organizations and seek their help and cooperation for the promotion of trade and investment in the region. The 1^st Phase of ECO/ITC project (200-2004) 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 ECO-UNIDO Project, during the 1^st Phase included surveys on the Non-Tariff Barriers (NTBs) and Quality Standards of the Member States. Based on the findings of the joint surveys of ECO and UNIDO teams, two days EGM was organized on 18-19, December, 2007 in Tehran. The 2^nd Phase of ECO-UNIDO Project on Trade Capacity Building of ECO Member States will commence from January, 2009. ECO has forwarded proposals to ASEAN for Joint activities in diverse areas of trade and investment. A Project proposal for the Office of the High Representative for Least Developed Countries and Land Locked States (OHRLLS) aiming to promote investment of the LDCs of ECO region has also been finalized recently.

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