Officials from the 10 Islamic countries that form the Economic Cooperation Organization signed an agreement Thursday to cap maximum trade tariffs across commodities to 15% over the next eight years between member states.
Pakistan's Commerce Minister Humayun Akhtar Khan said the agreement binds members to cut trade tariffs each year.
"Every year the minimum tariff reduction would be 10%, covering at least 5% of commodities traded among member states," said Khan in a press conference with the commerce ministers of other member states after two-days' of trade deliberations in Islamabad.
The ECO includes Pakistan, Iran, Afghanistan, Turkey, and the central Asian states of Azerbaijan, Kazakstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan.
Khan said in eight years' time at least 80% of the all tariffs should have been covered. Khan said wartorn Afghanistan, one of the ECO's 10 members, would be exempted from the treaty because its economy has no tariff structure. "Afghanistan is being exempted because it's in the process of developing a tariff regime," said Khan.
Data on trade within the ECO wasn't immediately available, but the ECO web site says the region as a whole accounted for between 1.15% and 1.3% of total world trade in 1999.
The ECO was formed in 1985 by Iran, Pakistan and Turkey and was expanded in 1992 to include the seven Central Asian Republics. "I think this agreement is going to pave the way for a free trade regime among the member countries," said Mohammed Shariatmadary, Minister for Commerce of Iran. Other observers have been unimpressed with the body's track-record to date.
Associated Press, July 17, 2003