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Economic Corridors in South Asia: Exploring the Benefits of Market Access and Trade Facilitation

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  • Raihan, Selim

Abstract

This paper shows that there are significant prospects of rise in intra-regional trade among the four Eastern South Asian countries. The partial equilibrium modelling exercise helps identify the products with high export potentiality. Simulation exercise based on a global general equilibrium model suggests that though there are prospects of welfare gains for India, Pakistan and Sri Lanka, there are risks of welfare loss for Bangladesh and other LDCs in South Asia out of FTA in goods under the SAFTA agreement because of the fact that the trade diversion effects could be larger than trade creation effects for these countries. However, such welfare loss could be well compensated by the rise in welfare due to improvement in trade facilitation among the South Asian countries. It also appears that the gains from trade facilitation are much bigger than the gains from trade liberalisation. Interactions with the stakeholders in Bangladesh helped identify a number of factors which are constraining trade in Eastern South Asia sub-region. These include inadequate facilities at the land and sea ports, weak physical infrastructure, inefficient bureaucracy, corruption and several forms of NTBs. Removal of such trade barriers though improvement in trade facilitation measures will generate significant rise in trade among these countries.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 37883.

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Date of creation: Sep 2011
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Handle: RePEc:pra:mprapa:37883

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Keywords: Economic Corridor; Market Access; Trade Facilitation; SAFTA;

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References

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  1. Hassan, M. Kabir, 2001. "Is SAARC a viable economic block? evidence from gravity model," Journal of Asian Economics, Elsevier, Elsevier, vol. 12(2), pages 263-290.
  2. Ahmed, Sadiq & Ghani, Ejaz, 2008. "Making regional cooperation work for South Asia's poor," Policy Research Working Paper Series 4736, The World Bank.
  3. 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.
  4. Sanjib Pohit & Nisha Taneja, 2003. "India's Informal Trade with Bangladesh: A Qualitative Assessment," The World Economy, Wiley Blackwell, vol. 26(8), pages 1187-1214, 08.
  5. Samantak Das & Sanjib Pohit, 2006. "Quantifying Transport, Regulatory and Other Costs of Indian Overland Exports to Bangladesh," The World Economy, Wiley Blackwell, vol. 29(9), pages 1227-1242, 09.
  6. Raihan, Selim & Razzaque, Mohammad A, 2007. "WTO and regional trade negotiation outcomes: quantitative assessments of potential implications on Bangladesh," MPRA Paper 38475, University Library of Munich, Germany.
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Cited by:
  1. De, Prabir & Raihan, Selim & Kathuria, Sanjay, 2012. "Unlocking Bangladesh-India trade : emerging potential and the way forward," Policy Research Working Paper Series 6155, The World Bank.
  2. Raihan, Selim, 2012. "SAFTA and the South Asian Countries: Quantitative Assessments of Potential Implications," MPRA Paper 37884, University Library of Munich, Germany.
  3. Raihan, Selim, 2011. "Employment Effects of FTA Agreements: The Perspectives from Bangladesh," MPRA Paper 37885, University Library of Munich, Germany.

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