Presentstion on SAFTA and NAFTA

1. NAFTA SAFTA

4. 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.

6. 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.

7. Trade Restriction Under Safta

8. 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.

9. 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.

10. 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.

11. 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.

13. 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.

14. 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.

16. 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.

17. 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.

18. 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).

19. 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.

20. 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.

21. 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.