Boosting regional co-operation in South Asia
The South Asian Association for Regional Co-operation (SAARC) aims to promote peace, trade and development among its members. One of its major goals is to create a South Asian Economic Union by 2020. The adoption of the South Asia Free Trade Agreement (SAFTA) framework treaty in 2006 has given new dynamism to the association and should further stimulate intra-regional trade and integration. The EU is eager to enhance trade and investment links with this fast-developing region.
SAARC is made up of eight countries: Afghanistan, Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan and Sri Lanka. It is the only organisation is South Asia that is specifically committed to developing regional co-operation.
The EU strongly supports SAARC and believes that increased regional co-operation will not only boost trade, but also prevent internal conflicts from spilling over national borders.
In line with its commitment to the Doha Development Agenda, the EU views trade-related technical assistance and capacity building programmes as crucial tools that could help transform South Asian economies. These mechanisms can support SAARC member states by improving their ability to trade while promoting constructive development work in the region.
Consequently, the European Commission has offered to share its own expertise in trade and economic integration with SAARC.
Strategy for change
Regional co-operation between the Commission and SAARC began in 1996. The development of concrete intervention has been slow. However, the Commission was designated as an observer to SAARC in April 2007, which may offer opportunities to enhance EU assistance. The Commission’s Regional Strategy Paper for Asia 2007-2013 [77 KB] focuses EU support on regional capacity building.
The EU’s Multi-annual Indicative Programme for Asia [57 KB] runs from 2007 to 2010. About €12 million has been allocated for the programme’s first four years of operation. This funding focuses on three main areas:
- Trade Development – the South Asia Free Trade Agreement (SAFTA): The programme will strengthen institutional capacity and improve mechanisms to implement SAFTA, with particular use of the EU experience.
- Sectoral Dialogue Facility: The need for more people-to-people contact is at the heart of this facility, which will help to raise awareness of the benefits of economic and trade integration in the SAARC countries. It will fund workshops, networks and exchange programmes to stimulate dialogue on four themes: energy and environment; transport; disaster preparedness; and statistics.
- The South Asia Civil Aviation Programme: A second phase of the South Asia Civil Aviation Programme will be developed, building on the achievements of its predecessor. The aim is to promote the regionalisation of several aspects of air travel and safety in the SAARC region. The ultimate objective is to establish a regional aviation safety agency in South Asia, similar to the European Aviation Safety Agency.