Trade and Transport Facilitation – ECO

ECO Secretariat Background Paper

8th Consultative Meeting of 

Executive Heads of Sub-Regional Organizations

      

          The Charter of Economic Cooperation Organization (ECO) commits it to encourage economic growth and cooperation among its Member States. It also highlights the importance of trade in the regional development process, based on the recognition that few countries can prosper and develop alone.

 

          In order to translate these ideals into reality, many programmes in the fields of  trade & investment, transport & communications were initiated with the technical and financial support of certain donor agencies and international organization . These activities were planned and developed with the view to mutually reinforce the trade promotion efforts of the Member States in a regional context.  Therefore, as envisaged under the Organization's economic cooperation strategy, ECO continued to assist the Member States to mobilize their institutional resources towards promotion of intra-regional trade. The main thrust in achieving this objective was placed on the trade promotion and facilitation activities. In the area of trade facilitation, the primary focus has remained on the drafting of a comprehensive regional trade Agreement which would ensure the gradual reduction and removal of tariff& non-tariff barriers. The objectives and scope of this Agreement have been delineated in the ECO Framework Agreement on Trade Cooperation (FAT), which was signed in Tehran in March, 2000 during the 1st ECO Ministerial Meeting on Commerce/Foreign Trade.

 

           It is indeed a matter of great satisfaction that the work on drafting of the ECO Trade Agreement (ECOTA) has been completed during the recently concluded meeting of High Level Expert Group and the agreement was approved and signed by the 2nd ECO Ministerial Meeting on Commerce/Foreign Trade held in Islamabad on July 17, 2003.

 

          Other trade facilitation activities are spread over areas such as customs cooperation and trade information networking. These activities are primarily aimed at simplifying procedures for all regional transactions and creating an environment for effecting regional cooperation in the trade arena. Customs cooperation in the ECO region received further impetus by the formation of the Council of Heads of Customs Administration (CHCA), which in its 1st meeting, held in Istanbul on September 27-28, 2001, made some very important and far reaching policy decisions regarding implementation of MOU on Cooperation against Smuggling and Customs Frauds, Customs Transit Management System, establishment of a Data Bank on ECO Customs Offences and issues concerning the integrity of Customs Administrations of the Member States. Progress on implementing on these decision was again reviewed during 2nd CHCA meeting held in Tehran on September 1, 2002.

 

          The establishment of Trade & Investment Information Networking in the ECO region, is scheduled to be held in Pakistan this year. In order to upgrade and improve the trade information services in Azerbaijan and Central Asian Member States (ACAMS), the Islamic Republic of Iran ad the Republic of Turkey volunteered to render their assistance in this regard. A program for such assistance would be devised in consultation with both of these Member States.

 

          The International Trade Centre (ITC) and Economic & Social Commission for Asian and Pacific (ESCAP) agreed to assist ECO Secretariat in devising a Plan of Action for developing the ECO Trade-Net (ETN) into a regional trade information resource. Moreover, the representative of ITC also agreed, in principle, that ITC will provide assistance to ECO Secretariat in building its capacity with regard to trade information networking.

 

          ECO and World Trade Organization (WTO) have continued their cooperation on exchanging information and participating in each other's activities within the framework of the Observer Status accorded to ECO. The two organizations are continuing to plan their future joint activities for the year 2003-2004 taking into account the dire need of the region to promote intra-trade and to interact with the global economy.

 

          An important component of the Organization's trade promotion strategy consists of a joint project with ITC. The project is anticipated to have a positive impact on intra-regional trade and in enhancing business contacts among the trading companies. The main components of the project i.e. Product Selection Workshop 28 demand and supply service of selected product group, 1st ECO Business Forum and two Buyers-Sellers Meetings on textiles & clothing, agricultural & food products have been completed.

 

 

          The ECO Chamber of Commerce & Industry also needs to play a more active role in promoting trade among the Member States. It would be desirable if the National Chambers of the Founding Member Countries could help their counterparts in ACAMS to strengthen their capacities in this regard. In fact, by according greater priority to the participation of the private sector, the ECO Member States may create a more favourable environment to facilitate and increase trade transactions within the region.

 

          All these programs are expected to gradually have a positive impact on the pattern and volume of trade in the ECO region. But still we have a long way to go before we can fully reap the benefits of our regional cooperation efforts. The challenges are quite daunting in terms of the trade policy orientations of the member states which not only hamper free and unrestricted flow of goods and services across national frontiers, but also stand in the way of promoting meaningful economic cooperation among the member states.

 

          It is not possible to boost economic growth and trade activity without proper development of transport linkages across the ECO region. Interconnection of the main transport arteries of ECO member states among themselves as well as with the global transport corridors was therefore thought to be of paramount importance for the overall development of transit trade within both the regional and inter-regional context. A series of projects in the area of transit transport were consequently initiated to attain the said objectives.

 

          One of the most important of these initiatives was the launching of the Program of Action for the ECO Decade of Transport and Communications (1998-2007) during the 2nd Ministerial Meeting on Transport and Communications held in Ashgabat in March 1998. This Program of Action envisaged a series of steps in order to achieve the objectives enshrined in the Treaty of Izmir, Quetta Plan of Action and the Istanbul declaration on long term perspectives for ECO. It also provided a road map for implementing the Almaty Outline Plan for Development of Transport Sector in the ECO Region (1993) as well as the Ashghabat at Declaration of 1997.Thus the work began on physical completion of transport network and its capacity building through introduction of multi-modal transport and transit transport facilitation operations across national frontiers .

 

          Another important development in the area of transit trade facilitation was the signing of the ECO Transit Trade Agreement (TTA) in 1995. lt came into force in 1998 and since then has also been ratified by all the signatory member states. However this agreement could not be operationalized owing to administrative and logistic problems. This Agreement was followed by signing of another instrument aimed at facilitation of transit operations called the ECO Transit Transport Framework Agreement (TTFA) in 1998. lt could also not be operationalized due to non ratification of the Agreement by some of the signatory member states.

 

          Taking cognizance of this apparent impasse, the Regional Planning Council in it's 12th meeting held in Tehran earlier this year recommended joint and immediate implementation of the TTA and the TTFA to ensure better coordination and expeditious operationalization of these Agreements.

 

          In order to facilitate and promote transit. operations within the ECO region a Technical Grant and Assistance Agreement was signed between ECO and the Islamic Development Bank in 1999. Under the said Agreement IDB extended a grant of US $ 272,000 to conduct a study on multimodal transport operations with the help of consultants provided by UNCTAD and UNESCAP. The study would be followed by a regional seminar and a series of workshops to create awareness among policy makers and private sector people about multimodal transport concepts and set up a multi modal transport regime in the entire ECO region. This project would be operationalized very soon.

 

          A significant development that has recently taken place is the opening of international passenger and cargo traffic along the main Trans Asian Railway Line i.e. Almaty- Tashkent-Turkmenabad-Tehran -Istanbul Passenger Train. A Regular Container Train along the same route has started its operations in January 2002. These developments are expected have a significant impact on the promotion of transit operations among five ECO member states.

 

          As is evident from the facts stated earlier there have been some positive developments and some setbacks in terms of ECO's efforts towards facilitation and promotion of Transit operations across national borders of its member states. However with the removal of physical as well as non physical barriers to transit trade such as lack of proper facilities at border crossings, delays in customs clearance, excessive transit and freight tariffs, under developed transport infrastructure, etc, the situation is slowly but surely being remedied by the combined efforts and resolve demonstrated by the member states of ECO.

   

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