Iranian Economic Review, Vol.12, No.18, Winter 2007 ECO and Regional Trade Elaheh Koolaee ∗ Abstract Economic Cooperation Organization (ECO), based on regional and multicultural cooperation, has focused on the improvement of living standards, collective as well as individual prosperity of people and economic development of member’s states. Since February 1992 ECO has been expanded to ten as the result of collapse of the Soviet Union. Of course, gas and oil are very important factors in this regard. ECO has followed its two major plans in the context of “Action Plan” and "Istanbul Declaration". Each of these documents is an indication of overall goals of this organization by 2005. One of the most important goals of ECO members has been accelerated of economic growth and development. The main question of this paper is: “Has ECO been able to fulfill declared goals among member states?” The hypothesis of this paper is: ECO has failed to achieve these goals. Prove of this hypothesis makes the revision of ECO activities a necessary step. Key words: ECO, RCD, Iran, Central Asia, Russia, America, China Introduction Rapid changes in international trade have created the need to increase cooperation among countries to reach overall development (1). Many of these countries have realized that, in order to reach growth and development goals, they need to create a regional economic union. They have realized that they ought to have complementary economics, common economic and cultural goals. Naturally, as result of economic growth, every member will be influenced by other’s growth. Now regional cooperation is seen as a tool to create a more stable and predictable trade environment and as a factor to remove those obstacles that restrict access to local markets. Regional trade ∗- Professor of Political Science, University of Tehran.