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Trade agreements between developing countries: a case study of Pakistan - Sri Lanka free trade agreement

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  • Ahmed, Saira
  • Ahmed, Vaqar
  • Sohail, Safdar

Abstract

This paper assesses the pre and post Free Trade Agreement (FTA) pattern in bilateral trade between Pakistan and Sri Lanka. Besides the usual direction of trade analysis we also use general and partial equilibrium approaches in order to evaluate the true potential of this FTA. Our results reveal an increase in welfare and efficiency for both countries. However export basket has not changed much since pre-FTA period. This calls for creating awareness about the FTA and putting in place a consultative mechanism with trade community that can identify the manner in which both countries can accrue maximum benefit from the free movement of tradable goods. Similar suggestions follow in our perception survey carried out for this study.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 29209.

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Date of creation: Nov 2010
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Handle: RePEc:pra:mprapa:29209

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Keywords: Free Trade Agreement; General Equilibrium;

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  1. Sourafel Girma & Richard Kneller & Mauro Pisu, 2008. "Trade Creation, Replacement, and Destruction in Regional Trade Agreements: Micro-level Evidence for the UK," Review of International Economics, Wiley Blackwell, vol. 16(1), pages 142-158, 02.
  2. Saman Kelegama & Indra Nath Mukherji, 2007. "India-Sri Lanka Bilateral Free Trade Agreement : Six Years Performance and Beyond," Trade Working Papers 22104, East Asian Bureau of Economic Research.
  3. Dr James Laurenceson, 2003. "Economic Integration Between China And ASEAN," Discussion Papers Series 329, School of Economics, University of Queensland, Australia.
  4. Calvo-Pardo, Hector & Freund, Caroline & Ornelas, Emanuel, 2009. "The ASEAN free trade agreement : impact on trade flows and external trade barriers," Policy Research Working Paper Series 4960, The World Bank.
  5. Baysan, Tercan & Panagariya, Arvind & Pitigala, Nihal, 2006. "Preferential trading in South Asia," Policy Research Working Paper Series 3813, The World Bank.
  6. Yeats, Alexander J., 1998. "Just how big is global production sharing?," Policy Research Working Paper Series 1871, The World Bank.
  7. John S. Wilson & Catherine L. Mann & Tsunehiro Otsuki, 2003. "Trade Facilitation and Economic Development: A New Approach to Quantifying the Impact," World Bank Economic Review, World Bank Group, vol. 17(3), pages 367-389, December.
  8. Greg Mastel, 2004. "The Rise of the Free Trade Agreement," Challenge, M.E. Sharpe, Inc., vol. 47(4), pages 41-61, July.
  9. Paul Dorosh & Muhammad Khan Niazi & Hina Nazli, 2006. "A Social Accounting Matrix for Pakistan, 2001-02 : Methodology and Results," Finance Working Papers 22187, East Asian Bureau of Economic Research.
  10. F. Gerard Adams & Byron Gangnes & Yochanan Shachmurove, 2004. "Why Is China So Competitive? Measuring and Explaining China’s Competitiveness," Working Papers 200406, University of Hawaii at Manoa, Department of Economics.
  11. Wilson, John S. & Mann, Catherine L. & Otsuki, Tsunehiro, 2004. "Assessing the potential benefit of trade facilitation : A global perspective," Policy Research Working Paper Series 3224, The World Bank.
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