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Economic co-operation in South Asia: The Dilemma of SAFTA and beyond

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Author Info
A. Ganesh Kumar () (Indira Gandhi Institute of Devleopment Research)
Gordhan Kumar Saini () (Indian Institute of Management, Ahmedabad)
Abstract

This paper attempts to evaluate the Pareto optimality of SAFTA for all the member states. Besides, the welfare optimality of three other alternative sets of coordinated trade policies that go beyond SAFTA has also been studied here. These include (a) extended preferential trading between SAFTA and three other major trading blocs (ASEAN, NAFTA and EU27), (b) coordinated full trade liberalisation (carried out unilaterally or as part of a multilateral agreement) by South Asian countries, and (c) SAFTA plus a customs union (two variants with 5 and 10 CET). The analysis, using the standard static GTAP model, shows that the welfare basis for establishing SAFTA or for deeper trade policy coordination is not very strong. Nor is it obvious that cooperation among the South Asia would be forthcoming given the anticipated welfare impacts.

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Paper provided by Indira Gandhi Institute of Development Research, Mumbai, India in its series Indira Gandhi Institute of Development Research, Mumbai Working Papers with number 2007-017.

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Length: 40 pages
Date of creation: Oct 2007
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Handle: RePEc:ind:igiwpp:2007-017

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Jayatilleke S. Bandara & Wusheng Yu, 2003. "How Desirable is the South Asian Free Trade Area? A Quantitative Economic Assessment," The World Economy, Blackwell Publishing, vol. 26(9), pages 1293-1323, 09. [Downloadable!] (restricted)
  2. Jose Daniel Rodríguez-Delgado, 2007. "SAFTA: Living in a World of Regional Trade Agreements," IMF Working Papers 07/23, International Monetary Fund. [Downloadable!]
  3. DeRosa, Dean A. & Govindan, Kumaresan, 1995. "Agriculture, trade and regionalism in South Asia," 2020 vision briefs 46, International Food Policy Research Institute (IFPRI). [Downloadable!]
  4. Baysan, Tercan & Panagariya, Arvind & Pitigala, Nihal, 2006. "Preferential trading in South Asia," Policy Research Working Paper Series 3813, The World Bank. [Downloadable!]
  5. DeRosa, Dean A. & Govindan, Kumaresan, 1996. "Agriculture, trade, and regionalism in South Asia," Journal of Asian Economics, Elsevier, vol. 7(2), pages 293-315. [Downloadable!] (restricted)
  6. Baldwin, Richard E. & Venables, Anthony J., 1995. "Regional economic integration," Handbook of International Economics, in: G. M. Grossman & K. Rogoff (ed.), Handbook of International Economics, edition 1, volume 3, chapter 31, pages 1597-1644 Elsevier. [Downloadable!] (restricted)
  7. Flam, Harry, 1992. "Product Markets and 1992: Full Integration, Large Gains?," Journal of Economic Perspectives, American Economic Association, vol. 6(4), pages 7-30, Fall. [Downloadable!] (restricted)
  8. DeRosa, Dean A. & Govindan, Kumaresan, 1995. "Agriculture, trade and regionalism in South Asia:," 2020 vision discussion papers 7, International Food Policy Research Institute (IFPRI). [Downloadable!]
  9. Arvind Panagariya, 2000. "Preferential Trade Liberalization: The Traditional Theory and New Developments," Journal of Economic Literature, American Economic Association, vol. 38(2), pages 287-331, June. [Downloadable!] (restricted)
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  1. Gordhan K. Saini, 2009. "Non-tariff measures and Indian textiles and clothing exports," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2009-002, Indira Gandhi Institute of Development Research, Mumbai, India. [Downloadable!]
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