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Impact of Sensitive Lists under SAFTA: Quantitative Assessment using a Partial Equilibrium Modeling

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  • Shahid Ahmed
  • Sushil Kumar

Abstract

The long list of product in sensitive list maintained by the member countries is one of the major weaknesses of South Asia Free Trade agreement for its effectiveness. Present study analyzes the impact of sensitive list (Phase II) under the SAFTA at disaggregate level (HS6 digit) by using partial equilibrium modeling. This paper more specifically looked at consumer surplus, trade creation, trade diversion as well as impact on tariff revenues among India, Pakistan, Sri Lanka and Bangladesh as a result of removal of sensitive list. The study indicates positive effect on consumer surplus and trade flows; and negative effect on tariff revenues. RCA index indicated comparative advantage in textiles, machinery/ electric product, chemicals and allied products and metal products and different categories of textile products. The simulation results shows that aggregate total trade effect is US$ 902.82 million and a surge in export of crude oil, technically specified natural rubber, cotton, smoked sheets, articles of apparel and clothing accessories etc. Finally, the study recommended that each country should reduce the sensitive list.

Suggested Citation

  • Shahid Ahmed & Sushil Kumar, 2014. "Impact of Sensitive Lists under SAFTA: Quantitative Assessment using a Partial Equilibrium Modeling," 2014 Papers pah96, Job Market Papers.
    • Handle: RePEc:jmp:jm2014:pah96
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    5. Mustafizur Rahman & Wasel Bin Shadat & Narayan Chandra Das, 2006. "Trade Potential in SAFTA - An Application of Augmented Gravity Model," Trade Working Papers 22296, East Asian Bureau of Economic Research.
    6. Baysan, Tercan & Panagariya, Arvind & Pitigala, Nihal, 2006. "Preferential trading in South Asia," Policy Research Working Paper Series 3813, The World Bank.
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    Cited by:

    1. Kumar, Sushil & Ahmed, Shahid, 2014. "Growth and Pattern of Intra-Industry Trade between India and Bangladesh: 1975–2010," MPRA Paper 61113, University Library of Munich, Germany, revised 29 Dec 2014.
    2. Sushil Kumar & Shahid Ahmed, 2015. "Gravity Model by Panel Data Approach," Foreign Trade Review, , vol. 50(4), pages 233-249, November.
    3. Minh Doan Nguyen & Nga Le Thi Viet & Huy Dinh Tran Ngoc & Dat Pham Minh, 2021. "Vietnam’s Meat Import Market Under Impacts Of The European -Vietnam Free Trade Agreement And Quality Management Demand," Management, Sciendo, vol. 25(1), pages 99-117, January.

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    More about this item

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation

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