INTERNATIONAL BUSINESS AND FINANCE

Economic Integration
Regional Trade Agreements
Alqa Ashraf, Iqra Sajjad, Tabinda, Maria Amin, Mehwish 6/11/2012

This report is about regional trade agreements. In which we mentioned ASEAN, NAFTA, SAARC, OPEC, NATO and some agreements related to Pakistan i.e. with Mauritius, china and India.

Definition of Economic Integration

It is an economic arrangement between different regions marked by the reduction or elimination of trade barriers and the coordination of monetary and fiscal policies. The aim of economic integration is to reduce costs for both consumers and producers, as well as to increase trade between the countries taking part in the agreement.
Economic Integration

There are varying levels of economic integration, including preferential trade agreements (PTA), free trade areas (FTA), customs unions, common markets and economic and monetary unions. The more integrated the economies become, the fewer trade barriers exist and the more economic and political coordination there is between the member countries. By integrating the economies of more than one country, the short-term benefits from the use of tariffs and other trade barriers is diminished. At the same time, the more integrated the economies become, the less power the governments of the member nations have to make adjustments that would benefit themselves. In periods of economic growth, being integrated can lead to greater long-term economic benefits; however, in periods of poor growth being integrated can actually make things worse. The trend of regional economic integration was further reinforced by the development of modern technologies in the fields of construction, telecommunication, heavy machinery, road, rail and air transportation, shipping and container services, finance and banking and development of micro/macro computers and internet.

Related definitions
Free Trade Area
A group of countries that invoke little or no price control in the form of tariffs or quotas between each other. Free trade areas allow the agreeing nations to focus on their competitive advantage and to freely trade for the goods they lack the experience at making, thus increasing the efficiency and profitability of each country.

Quota
In the context of international trade, this is a limit put on the amount of a specific good that can be imported.

Tariff
A tax imposed on imported goods and services. Tariffs are used to restrict trade, as they increase the price of imported goods and services, making them more expensive to consumers. They are one of several tools available to shape trade policy.

Protectionism
Its the Government actions and policies that restrict or restrain international trade, often done with the intent of protecting local businesses and jobs from foreign competition. Typical methods of protectionism are import tariffs, quotas, subsidies or tax cuts to local businesses and direct state intervention.

Most Favored Nation Clause

Its a level of status given to one country by another and enforced by the World Trade Organization. A country grants this clause to another nation if it is interested in increasing trade with that country. Countries achieving most favored nation status are given specific trade advantages such as reduced tariffs on imported goods. Special consideration is given to countries that are classified as "developing" by the World Trade Organization.

ASEAN
ESTABLISHMENT The Association of Southeast Asian Nations, or ASEAN, was established on 8 August 1967 in Bangkok, Thailand, with the signing of the ASEAN Declaration (Bangkok Declaration) by the Founding Fathers of ASEAN, namely Indonesia, Malaysia, Philippines, Singapore and Thailand. Brunei Darussalam then joined on 7 January 1984, Viet Nam on 28 July 1995, Lao PDR and Myanmar on 23 July 1997, and Cambodia on 30 April 1999, making up what is today the ten Member States of ASEAN. ASEAN COMMUNITIES

ASEAN Community consists of three pillars, namely the

1) Asean Political-Security Community (APSC), 2) The Asean Economic Community (AEC) 3) The Asean Socio-Cultural Community (ASCC). ASEAN Political Security Community
At the 13th ASEAN Summit in Singapore, the ASEAN Heads of States/Governments signed the ASEAN Charter, which marked ASEAN Member States commitment in intensifying community-building through enhanced regional cooperation and integration. In line with this, they tasked their Ministers and officials to draft the APSC Blueprint, which would be adopted at the 14th ASEAN Summit. The APSC Blueprint is guided by the ASEAN Charter and the principles and purposes contained therein. The APSC Blueprint builds on the ASEAN Security Community Plan of Action, the Vientiane Action Programme (VAP), as well as relevant decisions by various ASEAN Sectoral Bodies. The ASEAN Security Community Plan of Action is a principled document, laying out the activities needed to realize the objectives of the ASEAN Political Security Community, while the VAP lays out the measures necessary for 2004-2010. Both documents are important references in continuing political and security cooperation. The APSC Blueprint provides a roadmap and timetable to establish the APSC by 2015. The APSC Blueprint would also have the flexibility to continue programmes/activities beyond 2015 in order to retain its significance and have an enduring quality.

Characteristics and elements

It is envisaged that the APSC will bring ASEANs political and security cooperation to a higher plane. The APSC will ensure that the peoples and Member States of ASEAN live in peace with one another and with the world at large in a just, democratic and harmonious environment. The APSC shall promote political development in adherence to the principles of democracy, the rule of law and good governance, respect for and promotion and protection of human rights and fundamental freedoms as inscribed in the ASEAN Charter. It shall be a means by which ASEAN

Member States can pursue closer interaction and cooperation to forge shared norms and create common mechanisms to achieve ASEANs goals and objectives in the political and security fields. In this regard, it promotes a people-oriented ASEAN in which all sectors of society, regardless of gender, race, religion, language, or social and cultural background, are encouraged to participate in, and benefit from, the process of ASEAN integration and community building. In the implementation of, the Blueprint, ASEAN should also strive towards promoting and supporting gender-mainstreaming, tolerance, respect for diversity, equality and mutual understanding. At the same time, in the interest of preserving and enhancing peace and stability in the region, the APSC seeks to strengthen the mutually beneficial relations between ASEAN and its Dialogue Partners and friends. In doing so, it also maintains the centrality and proactive role of ASEAN in a regional architecture that is open, transparent and inclusive, while remaining actively engaged, forward-looking and nondiscriminatory. The APSC subscribes to a comprehensive approach to security, which acknowledges the interwoven relationships of political, economic, social-cultural and environmental dimensions of development. It promotes renunciation of aggression and of the threat or use of force or other actions in any manner inconsistent with international law and reliance of peaceful settlements of dispute. In this regard, it upholds existing ASEAN political instruments such as the Declaration on Zone of Peace, Freedom and Neutrality (ZOPFAN), the Treaty of Amity and Co-operation in South East Asia (TAC) and the Treaty on the Southeast Asian Nuclear Weapon-Free Zone (SEANWFZ), which play a pivotal role in the area of confidence building measures, preventive diplomacy and pacific approaches to conflict resolution. It also seeks to address non-traditional security issues. Based on the above, the ASEAN Political-Security Community envisages the following three key characteristics: a) A Rules-based Community of shared values and norms; b) A Cohesive, Peaceful, Stable and Resilient Region with shared responsibility for comprehensive security; and

c) A Dynamic and Outward-looking Region in an increasingly integrated and interdependent world.

A rules-based community of shared values and norms

ASEANs cooperation in political development aims to strengthen democracy, enhance good governance and the rule of law, and to promote and protect human rights and fundamental freedoms, with due regard to the rights and responsibilities of the Member States of ASEAN, so as to ultimately create a Rulesbased Community of shared values and norms. In the shaping and sharing of norms, ASEAN aims to achieve a standard of common adherence to norms of good conduct among member states of the ASEAN Community; consolidating and strengthening ASEANs solidarity, cohesiveness and harmony; and contributing to the building of a peaceful, democratic, tolerant, participatory and transparent community in Southeast Asia. Cooperation in political development by: Promoting understanding and appreciation of political systems, culture and history of ASEAN Member States. Laying the groundwork for an institutional framework to facilitate free flow of information for mutual support and assistance among ASEAN Member States. Establish programmes for mutual support and assistance among ASEAN Member States in the development of strategies for strengthening the rule of law and judiciary systems and legal infrastructure. Promoting good governance. Promotion and Protection of human rights. Increase the participation of relevant entities associated with ASEAN in moving forward ASEAN political development initiatives. Preventing and combating corruption. Promoting Principles of Democracy Promoting peace and stability in the region. Shaping and sharing of norms: Adjust ASEAN institutional framework to comply with the ASEAN Charter

 Strengthening Cooperation under the (treaty of amity and cooperation in southeast Asia)TAC1 Ensure full implementation of the DOC 2(declaration of the conduct of parties) for peace and stability in the South China Sea. Ensure the implementation of South East Asian Nuclear Weapon-Free Zone (SEANWFZ) Treaty, and its Plan of Action.

A cohesive, peaceful and resilient region with shared responsibility for comprehensive security:
In building a cohesive, peaceful and resilient Political Security Community, ASEAN subscribes to the principle of comprehensive security, which goes beyond the requirements of traditional security but also takes into account non-traditional aspects vital to regional and national resilience, such as the economic, socio-cultural, and environmental dimensions of development. ASEAN is also committed to conflict prevention/confidence building measures, preventive diplomacy, and post-conflict peace building. Conflict Prevention/Confidence Building Measures: Strengthen confidence-building measures Promote greater transparency and understanding of defence policies and security perceptions Strengthen efforts in maintaining respect for territorial integrity, sovereignty and unity of ASEAN Member States as stipulated in the Declaration on Principles of International Law Concerning Friendly Relations and Cooperation among States in Accordance with the Charter of the United Nations. Promote the development of norms that enhance ASEAN defence and security cooperation. Conflict resolution and pacific settlement of disputes:

1 2

Treaty to promote perpetual peace, everlasting amity and cooperation among their peoples which would contribute to their strength, solidarity and closer relationship,

 Strengthen research activities on peace, conflict management and conflict resolution. Promote regional cooperation to maintain peace and stability Post-conflict peace-building Strengthen ASEAN humanitarian assistance Implement human resources development and capacity building programmes in post-conflict areas Increase cooperation in reconciliation and further strengthen peace-oriented values Non-traditional security issues: Strengthen cooperation in addressing non-traditional security issues, particularly in combating transnational crimes and other transboundary challenges Intensify counter-terrorism efforts by early ratification and full implementation of the ASEAN Convention on Counter-Terrorism Strengthen ASEAN cooperation on disaster management and emergency response Effective and timely response to urgent issues or crisis situations affecting ASEAN

A dynamic and outward-looking region in an increasingly Integrated and interdependent world

ASEAN fosters and maintains friendly and mutually beneficial relations with external parties to ensure that the peoples and Member States of ASEAN live in peace with the world at large in a just, democratic and harmonious environment. ASEAN remains outward-looking and plays a pivotal role in the regional and international fora to advance ASEANs common interests. Through its external relations, ASEAN will exercise and maintain its centrality and proactive role as the primary driving force in an open, transparent and inclusive regional architecture to support the establishment of the ASEAN Community by 2015. Strengthening ASEAN centrality in regional cooperation and community building Promoting enhanced ties with External parties

 Strengthening consultations and cooperation on multilateral issues of common concern

ASEAN ECONOMIC COMMUNITY

The ASEAN Leaders at their Summit in Kuala Lumpur in December 1997 decided to transform ASEAN into a stable, prosperous, and highly competitive region with equitable economic development, and reduced poverty and socio-economic disparities (ASEAN Vision 2020). At the Bali Summit in October 2003, ASEAN Leaders declared that the ASEAN Economic Community (AEC) shall be the goal of regional economic integration (Bali Concord II) by 2020. In addition to the AEC, ASEAN Security Community and the ASEAN Socio-Cultural Community are the other two integral pillars of the envisaged ASEAN Community. All the three pillars are expected to work in tandem in establishing the ASEAN Community in 2020. Subsequently, the ASEAN Economic Ministers Meeting (AEM) held in August 2006 in Kuala Lumpur, Malaysia, agreed to develop a single and coherent blueprint for advancing the AEC by identifying the characteristics and elements of the AEC by 2015 consistent with the Bali Concord II with clear targets and timelines for implementation of various measures as well as pre-agreed flexibilities to accommodate the interests of all ASEAN Member Countries. At the 12th ASEAN Summit in January 2007, the Leaders affirmed their strong commitment to accelerate the establishment of an ASEAN Community by 2015 as envisioned in the ASEAN Vision 2020 and the ASEAN Concord II, and signed the Cebu Declaration on the Acceleration of the Establishment of a Community by 2015. In particular, the Leaders agreed to hasten the establishment of the ASEAN Economic Community by 2015 and to transform ASEAN into a region with free movement of goods, services, investment, skilled labor, and freer flow of capital.

CHARACTERISTICS AND ELEMENTS OF AEC

The AEC is the realization of the end goal of economic integration as espoused in the Vision 2020, which is based on a convergence of interests of ASEAN Member Countries to deepen and broaden economic integration through existing and new initiatives with clear timelines. In establishing the AEC, ASEAN shall act in accordance to the principles of an open, outwardlooking, inclusive, and market-driven economy consistent with multilateral rules as well as adherence to rules-based systems for effective compliance and implementation of economic commitments. The AEC will establish ASEAN as a single market and production base making ASEAN more dynamic and competitive with new mechanisms and measures to strengthen the implementation of its existing economic initiatives; accelerating regional integration in the priority sectors; facilitating movement of business persons, skilled labour and talents; and strengthening the institutional mechanisms of ASEAN. As a first step towards realising the ASEAN Economic Community, ASEAN has been implementing the recommendations of the High Level Task Force (HLTF) on ASEAN Economic Integration contained in the Bali Concord II. At the same time, the AEC will address the development divide and accelerate integration of Cambodia, Lao PDR, Myanmar and Viet Nam (CLMV) through the Initiative for ASEAN Integration and other regional initiatives. Other areas of cooperation are also to be incorporated such as human resources development and capacity building; recognition of professional qualifications; closer consultation on macroeconomic and financial policies; trade financing measures; enhanced infrastructure and communications connectivity; development of electronic transactions through e-ASEAN; integrating industries across the region to promote regional sourcing; and enhancing private sector involvement for the building of the AEC. Based on the above and taking into consideration the importance of external trade to ASEAN and the need for the ASEAN Community as a whole to remain outward looking, the AEC envisages the following key characteristics: (a) a single market and production base, (b) a highly competitive economic region, a region of equitable economic development, and (d) a region fully integrated into the global economy.

These characteristics are inter-related and mutually reinforcing. Incorporating the required elements of each characteristic in one Blueprint shall ensure the consistency and coherence of these elements as well as their implementation and proper coordination among relevant stakeholders. SINGLE MARKET AND PRODUCTION BASE: Free flow of goods; Free flow of services Free flow of investment Freer flow of capital Free flow of skilled labor. The priority integration sectors Food, agriculture and forestry COMPETIVE ECONOMIC REGION Competition policy Consumer protection Intellectual property rights Infrastructural development Taxation E- Commerce EQUITABLE ECONOMIC DEVELOPMENT SME development Initiative for ASEAN integration INTEGRATION INTO THE GLOBAL ECONOMY Coherent approach towards external economic relations Enhanced participation in global supply networks ASEAN CHARTER The ASEAN Charter serves as a firm foundation in achieving the ASEAN Community by providing legal status and institutional framework for ASEAN. It also codifies ASEAN

norms, rules and values; sets clear targets for ASEAN; and presents accountability and compliance. The ASEAN Charter entered into force on 15 December 2008. A gathering of the ASEAN Foreign Ministers was held at the ASEAN Secretariat in Jakarta to mark this very historic occasion for ASEAN. With the entry into force of the ASEAN Charter, ASEAN will henceforth operate under a new legal framework and establish a number of new organs to boost its community-building process. In effect, the ASEAN Charter has become a legally binding agreement among the 10 ASEAN Member States. AIMS AND PURPOSES As set out in the ASEAN Declaration, the aims and purposes of ASEAN are: 1) The Purposes of ASEAN are: 2) To maintain and enhance peace, security and stability and further strengthen peaceoriented values in the region; 3) To enhance regional resilience by promoting greater political, security, economic and socio-cultural cooperation; 4) To preserve Southeast Asia as a Nuclear Weapon- Free Zone and free of all other weapons of mass destruction; 5) To ensure that the peoples and Member States of ASEAN live in peace with the world at large in a just, democratic and harmonious environment; 6) To create a single market and production base which is stable, prosperous, highly competitive and economically integrated with effective facilitation for trade and investment in which there is free flow of goods, services and investment; facilitated movement of business persons, professionals, talents and labor; and free flow of capital; 7) To alleviate poverty and narrow the development gap within ASEAN through mutual assistance and cooperation; 8) To strengthen democracy, enhance good governance and the rule of law, and to promote and protect human rights and fundamental freedoms, with due regard to the rights and responsibilities of the Member States of ASEAN;

9) To respond effectively, in accordance with the principle of comprehensive security, to all forms of threats, transnational crimes and transboundary challenges; 10) To promote sustainable development so as to ensure the protection of the regions environment, the sustainability of its natural resources, the preservation of its cultural heritage and the high quality of life of its peoples; 11) To develop human resources through closer cooperation in education and life-long learning, and in science and technology, for the empowerment of the peoples of ASEAN and for the strengthening of the ASEAN Community; 12) To enhance the well-being and livelihood of the peoples of ASEAN by providing them with equitable access to opportunities for human development, social welfare and justice; 13) To strengthen cooperation in building a safe, secure and drug-free environment for the peoples of ASEAN; 14) To promote a people-oriented ASEAN in which all sectors of society are encouraged to participate in, and benefit from, the process of ASEAN integration and community building; 15) To promote an ASEAN identity through the fostering of greater awareness of the diverse culture and heritage of the region; and 16) To maintain the centrality and proactive role of ASEAN as the primary driving force in its relations and cooperation with its external partners in a regional architecture that is open, transparent and inclusive. FUNDAMENTAL PRINCIPLES In their relations with one another, the ASEAN Member States have adopted the following fundamental principles, as contained in the Treaty of Amity and Cooperation in Southeast Asia (TAC) of 1976: In pursuit of the Purposes stated in Article 1, ASEAN and its Member States reaffirm and adhere to the fundamental principles contained in the declarations, agreements, conventions, concords, treaties and other instruments of ASEAN. ASEAN and its Member States shall act in accordance with the following Principles:

(a) Respect for the independence, sovereignty, equality, territorial integrity and national identity of all ASEAN Member States; (b) Shared commitment and collective responsibility in enhancing regional peace, security and prosperity; (c) Rejection of violence and of the threat or use of force or other actions in any manner inconsistent with international law (d) Reliance on peaceful settlement of disputes; (e) non-interference in the internal affairs of ASEAN Member States; (f) respect for the right of every Member State to lead its national existence free from external interference, subversion and coercion; (g) enhanced consultations on matters seriously affecting the common interest of ASEAN; (h) adherence to the rule of law, good governance, the principles of democracy and constitutional government; (i) respect for fundamental freedoms, the promotion and protection of human rights, and the promotion of social justice; (j) Upholding the United Nations Charter and international law, including international humanitarian law, subscribed to by ASEAN Member States; (k) abstention from participation in any policy or activity, including the use of its territory, pursued by any ASEAN Member State or non-ASEAN State or any non-State actor, which threatens the sovereignty, territorial integrity or political and economic stability of ASEAN Member States; (l) Respect for the different cultures, languages and religions of the peoples of ASEAN, while emphasizing their common values in the spirit of unity in diversity; (m) the centrality of ASEAN in external political, economic, social and cultural relations while remaining actively engaged, outward-looking, inclusive and non-discriminatory; and

(n) adherence to multilateral trade rules and ASEANs rules-based regimes for effective implementation of economic commitments and progressive reduction towards elimination of all barriers to regional economic integration, in a market-driven economy.

Legal personality
ASEAN, as an inter-governmental organization, is hereby conferred legal personality.

Rights and Obligations

The Member States of ASEAN are Brunei Darussalam, the Kingdom of Cambodia, the Republic of Indonesia, the Lao Peoples Democratic Republic, Malaysia, the Union of Myanmar, the Republic of the Philippines, the Republic of Singapore, the Kingdom of Thailand and the Socialist Republic of Viet Nam. 1. Member States shall have equal rights and obligations under this Charter. 2. Member States shall take all necessary measures, including the enactment of appropriate domestic legislation, to effectively implement the provisions of this Charter and to comply with all obligations of membership. 3. In the case of a serious breach of the Charter or noncompliance, the matter shall be referred to Article 20.

Admission of new members

1. The procedure for application and admission to ASEAN shall be prescribed by the ASEAN Coordinating Council. 2. Admission shall be based on the following criteria: i. ii. iii. Location in the recognized geographical region of Southeast Asia; Recognition by all ASEAN Member States; Agreement to be bound and to abide by the Charter; and

iv.

Ability and willingness to carry out the obligations of Membership.

3. Admission shall be decided by consensus by the ASEAN Summit, upon the recommendation of the ASEAN Coordinating Council. 4. An applicant State shall be admitted to ASEAN upon signing an Instrument of Accession to the Charter.

Impacts of ASEAN
The elimination of tariffs will result in product price reductions throughout ASEAN
encouraging higher market competition

Help ASEAN countries' products gain access to a regional market that incorporates many
substantial advantages, e.g. A population of more than 580 million, $1.5 trillion gross domestic product, convenient transport systems, huge international trade worth $1.7 trillion a year, and foreign investment of $60 billion

Consumers will benefit from cheaper prices of goods given lower tariffs on a host of raw
materials used by the region's producers.

some of processing factories are expected to enjoy cheaper imported raw materials in the
face of the tariff elimination, cutting their production costs

ASEAN will be integrated into a single market which is an important point because the
market will be stronger and larger with a high population

The export and investment sectors will generate higher potential in the long term. Import tariffs will fall to zero for a wide range of agricultural goods, such as onion, garlic,
tea, sugar, rice, soybeans, palm oil, and other farm products tariffs are now eliminated as of January 1, 2010. The tariff lines under CEPT-AFTA also cover a wide range from finished consumer products such as air-conditioners; food products such as chili sauce, fish and soya sauces; intermediate materials such as motorcycle parts and automobile cylinders; and other products such as iron and steel, plastics, machinery and mechanical equipment, chemicals and prepared foodstuffs, paper, cement, ceramics and glass.

Some countries, such as, Thailand, have their products on the countries' sensitive lists.
Those are to carry a 5% tariff and include coffee beans (down from 20%), copra (from

15%), potatoes (from 10%) and cut flowers (from 10%). Thailand is concerned about the impact on some key agricultural products such as rice and palm oil. However, a number of Thai sectors should gain substantially from the free trade due to a decline in production costs. They include textiles and garments, leather products, food products, gems and jewelery, vehicles and parts, mineral products, and electronics.

The four less developed members of the region, such as Cambodia, Laos, Burma and
Vietnam will have until 2015 to reduce their tariffs to 0-5% under their AFTA commitments.

For Vietnam, its lower production costs and rising output of rice are expected to be
competitive with Thailand and affect Thailands rice market share. Thailand expects to lose a 0.5% share of the rice trade, or around $13 million, to Vietnam.

For Malaysia and Indonesia, their palm oil price is more expensive than that produced from
Thailand. The loss of palm oil market share to Malaysia was forecast at 2.6% or US$46 million because Malaysia is the world's largest producer and highly efficient. Malaysian producers' expansion to Indonesia will further lift their productivity.

Therefore, AFTA expansion could affect the Thai economy both negatively and positively.
"But the good would far outweigh the bad", said Thailand's Prime Minister Abhisit Vejjajiva, according to Bangkok Post newspaper. He announced that the government had mapped out assistance measures funded by various ministries and also pledged stringent import regulations to ensure the quality of farm goods, as well as to protect Thai consumers. The governments will lose income from tax collections but in the long term the chances for exports are wider when compared with countries outside ASEAN. Thus, the nation will benefit overall.

Experts suggested that for Thailand, the challenge continues to be upgrading skills and
developing products to serve consumer demand, which will help increase brand awareness, add value and competitiveness to Thai products in global markets. Mr Dhanin Chearavanont, a leading food exporter and the Chairman of Charoen Pokphand (CP) Group, also said recently that the the zero tariff scheme under the ASEAN Free Trade Area would attract more foreign investors to Thailand. When compared to other ASEAN nations, Thailand's business environment remains attractive. He explained that the zero duty on agricultural products under the AFTA would benefit the country as a whole in the

long run because 95% of products are not taxed. In the short term, some Thai products would be hit by higher competition from trade liberalization.
North American Free Trade Agreement (NAFTA)

The North American Free Trade Agreement (NAFTA), signed by Prime Minister Brian Mulroney, Mexican President Carlos Salinas, and U.S. President George H.W. Bush, came into effect on January 1, 1994. Since 1993, NAFTA has generated economic growth and rising standards of living for the people of all three member countries. By strengthening the rules and procedures governing trade and investment throughout the continent, NAFTA has proved to be a solid foundation for building Canadas future prosperity. In January 1994, when Canada, the United States and Mexico launched the North American Free Trade Agreement (NAFTA), the world's largest free trade area was formed. The Agreement has brought economic growth and rising standards of living for people in all three countries. In addition, NAFTA has established a strong foundation for future growth and has set a valuable example of the benefits of trade liberalization. Objectives 1. The objectives of this Agreement, as elaborated more specifically through its principles and rules, including national treatment, most-favored-nation treatment and transparency, are to: a) Eliminate barriers to trade in, and facilitate the cross-border movement of, goods and services between the territories of the parties; b) Promote conditions of fair competition in the free trade area; c) Increase substantially investment opportunities in the territories of the parties; d) Provide adequate and effective protection and enforcement of intellectual property rights in each party's territory; e) Create effective procedures for the implementation and application of this agreement, for its joint administration and for the resolution of disputes; and f) Establish a framework for further trilateral, regional and multilateral cooperation to expand and enhance the benefits of this Agreement.

2. The Parties shall interpret and apply the provisions of this Agreement in the light of its objectives set out in paragraph 1 and in accordance with applicable rules of international law. Relation to Other Agreements 1. The Parties affirm their existing rights and obligations with respect to each other under the General Agreement on Tariffs and Trade and other agreements to which such Parties are party. 2. In the event of any inconsistency between this Agreement and such other agreements, this Agreement shall prevail to the extent of the inconsistency, except as otherwise provided in this Agreement. Relation to Environmental and Conservation Agreements 1. In the event of any inconsistency between this Agreement and the specific trade obligations set out in: a. The Convention on International Trade in Endangered Species of Wild Fauna and Flora, done at Washington, March 3, 1973, as amended June 22, 1979, b. The Montreal Protocol on Substances that Deplete the Ozone Layer , done at Montreal, September 16, 1987, as amended June 29, 1990, c. the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal , done at Basel, March 22, 1989, on its entry into force for Canada, Mexico and the United States, or d. The agreements set out in Annex 104.1, such obligations shall prevail to the extent of the inconsistency, provided that where a Party has a choice among equally effective and reasonably available means of complying with such obligations, the Party chooses the alternative that is the least inconsistent with the other provisions of this Agreement. 2. The Parties may agree in writing to modify Annex 104.1 to include any amendment to an agreement referred to in paragraph 1, and any other environmental or conservation agreement.

Extent of Obligations The Parties shall ensure that all necessary measures are taken in order to give effect to the provisions of this Agreement, including their observance, except as otherwise provided in this Agreement, by state and provincial governments. Bilateral and Other Environmental and Conservation Agreements 1. The Agreement Between the Government of Canada and the Government of the United States of America Concerning the Transboundary Movement of Hazardous Waste , signed at Ottawa, October 28, 1986. 2. The Agreement Between the United States of America and the United Mexican States on Cooperation for the Protection and Improvement of the Environment in the Border Area , signed at La Paz, Baja California Sur, August 14, 1983.

SAARC
Charter
We, the Heads of State or Government of BANGLADESH, BHUTAN, INDIA, MALDIVES, NEPAL, PAKISTAN and SRI LANKA; 1) Desirous of promoting peace, stability, amity and progress in the region through

strict adherence to the principles of the UNITED NATIONS CHARTER and NONALIGNMENT, particularly respect for the principles of sovereign equality, territorial integrity, national independence, non-use of force and non-interference in the internal affairs of other States and peaceful settlement of all disputes; 2) Conscious that in an increasingly interdependent world, the objectives of peace,

freedom, social justice and economic prosperity are best achieved in the SOUTH ASIAN region by fostering mutual understanding, good neighbourly relations and

meaningful cooperation among the Member States which are bound by ties of history and culture; 3) Aware of the common problems, interests and aspirations of the peoples of

SOUTH ASIA and the need for joint action and enhanced cooperation within their respective political and economic systems and cultural traditions; 4) Convinced that regional cooperation among the countries of SOUTH ASIA is

mutually beneficial, desirable and necessary for promoting the welfare and improving the quality of life of the peoples of the region; 5) Convinced further that economic, social and technical cooperation among the

countries of SOUTH ASIA would contribute significantly to national and collective self-reliance; 6) Recognizing that increased cooperation, contacts and exchanges among the

countries of the region will contribute to the promotion of friendship and understanding among their peoples; 7) Recalling the DECLARATION signed by their Foreign Ministers in NEW

DELHI on August 2, 1983 and noting the progress achieved in regional cooperation; 8) Reaffirming their determination to promote such cooperation within an

institutional framework; DO HEREBY AGREE to establish an organisation to be known as SOUTH ASIAN ASSOCIATION FOR REGIONAL COOPERATION hereinafter referred to as the ASSOCIATION, with the following objectives, principles, institutional and financial arrangements: OBJECTIVES The objectives of the ASSOCIATION shall be:

a. to promote the welfare of the peoples of SOUTH ASIA and to improve their quality of life; b. to accelerate economic growth, social progress and cultural development in the region and to provide all individuals the opportunity to live in dignity and to realise their full potentials; c. to promote and strengthen collective self-reliance among the countries of SOUTH ASIA; d) to contribute to mutual trust, understanding and appreciation of one another's problems; d. to promote active collaboration and mutual assistance in the economic, social, cultural, technical and scientific fields; e. to strengthen cooperation with other developing countries; f. to strengthen cooperation among themselves in international forums on matters of common interests; and g. to cooperate with international and regional organizations with similar aims and purposes. Article II PRINCIPLES 1. Cooperation within the framework of the ASSOCIATION shall be based on respect for the principles of sovereign equality, territorial integrity, political independence, noninterference in the internal affairs of other States and mutual benefit. 2. Such cooperation shall not be a substitute for bilateral and multilateral cooperation but shall complement them. 3. Such cooperation shall not be inconsistent with bilateral and multilateral obligations. COUNCIL OF MINISTERS 1.A Council of Ministers consisting of the Foreign Ministers of the Member States shall be established with the following functions:

a) formulation of the policies of the ASSOCIATION; b) review of the progress of cooperation under the ASSOCIATION; c) decision on new areas of cooperation; d) establishment of additional mechanism under the ASSOCIATION as deemed necessary; e) decision on other matters of general interest to the ASSOCIATION. 2. The Council of Ministers shall meet twice a year. Extraordinary session of the Council may be held by agreement among the Member States. STANDING COMMITTEE 1.The Standing Committee comprising the Foreign Secretaries shall have the following functions: a) overall monitoring and coordination of programme of cooperation; b) approval of projects and programmes, and the modalities of their financing; c) determination of inter-sectoral priorities; d) mobilisation of regional and external resources; e) identification of new areas of cooperation based on appropriate studies. 2. The Standing Committee shall meet as often as deemed necessary. 3. The Standing Committee shall submit periodic reports to the Council of Ministers and make reference to it as and when necessary for decisions on policy matters. TECHNICAL COMMITTEES 1) Technical Committees comprising representatives of Member States shall be responsible for the implementation, coordination and monitoring of the programmes in their respective areas of cooperation. 2) They shall have the following terms of reference: a) determination of the potential and the scope of regional cooperation in agreed areas; b) formulation of programmes and preparation of projects; c) determination of financial implications of sectoral programmes;

d) formulation of recommendations regarding apportionment of costs; e) implementation and coordination of sectoral programmes; f) Monitoring of progress in implementation. 3) The Technical Committees shall submit periodic reports to the Standing Committee. 4) The Chairmanship of the Technical Committees shall normally rotate among Member States in alphabetical order every two years. 5) The Technical Committees may, inter-alia, use the following mechanisms and modalities, if and when considered necessary: a) meetings of heads of national technical agencies; b) meetings of experts in specific fields; c) Contact amongst recognized centres of excellence in the region. ACTION COMMITTEES The Standing Committee may set up Action Committees comprising Member States concerned with implementation of projects involving more than two but not all Member States. SECRETARIAT There shall be a Secretariat of the ASSOCIATION. FINANCIAL ARRANGEMENTS 1.The contribution of each Member State towards financing of the activities of the ASSOCIATION shall be voluntary. 2. Each Technical Committee shall make recommendations for the apportionment of costs of implementing the programmes proposed by it. 3. In case sufficient financial resources cannot be mobilised within the region for funding activities of the ASSOCIATION, external financing from appropriate sources may be mobilised with the approval of or by the Standing Committee.

GENERAL PROVISIONS 1. Decisions at all levels shall be taken on the basis of unanimity. 2. Bilateral and contentious issues shall be excluded from the deliberations

OPEC
Mission
In accordance with its Statute, the mission of the Organization of the Petroleum Exporting Countries (OPEC) is to coordinate and unify the petroleum policies of its Member Countries and ensure the stabilization of oil markets in order to secure an efficient, economic and regular supply of petroleum to consumers, a steady income to producers and a fair return on capital for those investing in the petroleum industry.

Member Countries
The Organization of the Petroleum Exporting Countries (OPEC) was founded in Baghdad, Iraq, with the signing of an agreement in September 1960 by five countries namely Islamic Republic of Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. They were to become the Founder Members of the Organization. These countries were later joined by Qatar (1961), Indonesia (1962), Libya (1962), the United Arab Emirates (1967), Algeria (1969), Nigeria (1971), Ecuador (1973), Gabon (1975) and Angola (2007). Currently it has total of 21 members.

TRADE AGREEMENTS OF PAKISTAN

Mauritius Pakistan PTA The Preferential Trade Area (PTA) between Mauritius and Pakistan was signed on 30 July 2007 in Mauritius.

The objectives of the PTA are mainly to strengthen the economic and commercial relationship and to increase the volume of trade in goods and services between the two countries. Under the PTA, tariff concessions have been granted on a list of products of export interest to both countries, which will allow local operators to trade on preferential terms. Rules of Origin: 1. The goods should be wholly produced or obtained in a member state (that is, they should contain no materials imported from outside the common market); or 2. A product shall be deemed to be originating if the total value of the materials, parts or produce originating from outside the territory of a Contracting Party does not exceed 65% of the FOB value of the product so produced or obtained, provided that the final process of manufacturing is performed within the territory of the Contracting Party and the product has undergone sufficient processing; or 3. Non originating materials shall be considered to be sufficiently worked or processed when the product obtained is classified in a heading at the six digit level of the harmonized commodity description and coding system, different from those in which all the non-originating materials used in its manufactures are classified

China and Pakistan free trade agreement

China and Pakistan signed an agreement on free trade area (FTA) on November 24, 2006, in the presence of top leaders from both countries. The agreement is projected to triple current bilateral trade to 15 billion US dollars within five years.

Pakistan and India

The two sides signed agreements including Customs Cooperation Agreement, Mutual Recognition Agreement and Redressal of Trade Grievances Agreement to build confidence of the business community on both the sides. Customs Co-operation Agreement is aimed at avoiding arbitrary stoppage of goods at each other's ports while mutual recognition

agreement is meant for acceptance of certificates of internationally accredited laboratories. The agreement is aimed at resolution of dispute between the two sides. Both the sides have also finalised a very liberal visa regime that would be in place as soon as the Cabinets in the two countries grant approval. Peak tariff line in India for Pakistan is eight percent that is going to be curtailed to five per cent by the end of this year.