Intra regional trade among countries belonging to the Economic Cooperation Organisation (ECO) remains limited to approximately 8.75%, prompting ECO Chamber of Commerce and Industry President Atif Ikram Sheikh to call for an overhaul and effective implementation of the ECO Trade Agreement. Sheikh, who also serves as president of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), said the region continues to operate below its considerable trade potential despite having substantial economic resources and a strategically important geographical position. He stressed that stronger commercial integration among ECO member states could provide new opportunities for businesses and contribute to greater regional economic activity.
Sheikh noted that the ECO region accounts for only around 4% of global trade, despite its access to significant natural resources and its position connecting important markets across Asia and Europe. He identified several factors limiting trade among member countries, including high tariffs, non tariff barriers, regulatory differences, limited diversification of products and difficulties in processing trade related payments. According to him, these obstacles have restricted the ability of businesses in ECO countries to take full advantage of regional markets and have contributed to the relatively low level of intra regional commerce.
The ECO Trade Agreement, commonly known as ECOTA, was signed in 2003 and became effective in April 2008 with the objective of establishing an ECO Free Trade Area. However, implementation of the agreement has remained restricted because of differences over tariff structures, incomplete product lists and concerns regarding the equitable distribution of its benefits among participating countries. Sheikh called for sustained negotiations to resolve these outstanding issues and establish a framework that can provide balanced benefits to all ECO member states. Greater progress on the agreement, he said, could create a stronger foundation for expanding commercial relations across the region.
Sheikh proposed a measured reduction in tariffs as one of the steps required to improve regional trade. He also called for greater diversification of products traded between member countries and increased investment in regional competitiveness. According to his proposals, stronger payment mechanisms would be needed to address difficulties businesses face when completing cross border transactions. Lower transaction costs and greater regulatory transparency were also highlighted as important measures that could make regional commerce easier for businesses and encourage more companies to explore markets within ECO countries.
The FPCCI chief also emphasised the growing importance of e commerce and digital trade in strengthening regional commercial connections. He called for measures that would facilitate digital trade and make it easier for businesses to participate in cross border commerce. Improved digital payment mechanisms, clearer regulations and reduced transaction barriers could support businesses seeking to sell products and services across ECO markets. Such measures could also help smaller businesses participate in regional trade by reducing some of the costs and administrative challenges associated with traditional international commerce.
The ECO region has substantial hydrocarbon and mineral resources, along with a young and skilled population and road and rail networks that connect Asia with Europe, according to Sheikh. The region’s geographical position also places it close to major markets including China, India and Russia. These characteristics provide ECO countries with significant potential to increase trade and investment if existing barriers can be reduced. Greater use of these resources and connectivity advantages could allow member countries to expand their commercial relationships and strengthen their position within international trade.
Sheikh further stated that investment in regional transport and logistics infrastructure would be essential to translating the region’s geographical and economic advantages into greater commercial integration. Improved transport links could reduce logistical challenges, strengthen supply chains and make movement of goods between ECO countries more efficient. Alongside improvements in infrastructure, he stressed the need for reforms covering tariffs, regulations, payments and digital commerce. Addressing these areas could help establish a more integrated regional trading environment and provide businesses with improved access to neighbouring markets.
The call for an ECOTA overhaul comes as intra regional trade remains well below the potential of the ECO bloc. With the region accounting for only around 4% of global trade and intra ECO trade standing at approximately 8.75%, Sheikh’s proposals focus on reducing practical barriers that continue to restrict commercial activity. He said resolving outstanding issues under ECOTA, improving payment systems, supporting e commerce, increasing product diversification and investing in transport and logistics could help establish ECO as a more competitive economic bloc and strengthen its role in regional and international trade.
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