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of SAARC countries strengthening the economy of the member nations. The main aim of
SAPTA is to increase trade through increasing investment and production. SAPTA was
first of all endorsed by Nepal on 20 Ashwin, 2050 and last endorsement was trade by
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Bangladesh on 5 Nov., 1995.
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The concept of free trade area started in 9 SAARC summit held at Male, Maldives
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changed SAPTA into SAFTA. The main aim of SAFTA is to reduce the custom duty,
increase investment and employment to improve the economy of member nations.
11 summit held in Kathmandu on 2003 decided to make SAARC nations as free trade
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area. This concept was endorsed on 6 January, 2004 at the 12 SAARC summit held at
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Islamabad, Pakistan and implemented since 1 Jan., 2006.
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Functions of SAFTA
i. To reduce imbalance of trade in South Asia.
ii. To provide compensation for the losses of revenue to the least developed member
countries due to elimination of tariffs.
iii. To provide technical support to the least developed member countries to promote export.
iv. To encourage member countries to extend trade within the SAARC countries for
improving their economy.
v. To settle trade disputes and misunderstanding through discussion and negotiations.
vi. To review the effectiveness of the implementation of the agreement.
vii. To develop strong mechanism for ensuring the smooth implementation of the agreement.
viii. To allow the member countries to prepare a list of products which are to be restricted to
import for the protection of national interest.
Glossary

Invoice : bill
Tariffs : duty/import export tax
Remittance : transferring money from other country
Publicity : advertisement
Complaints : protest/find fault
Freight : shipment/cargo
Merchant : businessman
Bulk : huge/large
Exercise

A. Answer the following questions in one sentence.
1. What is trade?
2. Write the full form of WTO. 2070, 2074 (NPABSON)
3. Write the full form of SAFTA.
4. What is the full form of SAPTA? 2070, 2072, 2074 (PABSON)
5. What is the full form of GATT? 2070 (S), 2073
6. What is the full form of ATM/SWIFT? 2074 (R)
7. What is hundi or Letter of Credit (LC)?
8. Who sends the Quotation Letter? 2069 (S)

58 Aakar’s Office Practice and Accountancy - 10 Trade 59