The South Asian Free Trade Area: an Analysis of Policy Options for Sri Lanka
South Asia was slow to adopt regional economic cooperation. The South Asian Association for Regional Cooperation (SAARC), established in 1985, and the creation of the South Asian Free Trade Area (SAFTA) remain a widely discussed policy issue in this region. This study compares the impacts of different trade policy options on Sri Lanka using the Global Trading Analysis Project (GTAP) Model. The simulation results indicate that multilateral trade liberalisation is the best trade policy outcome for the Sri Lankan economy. The South Asian Customs Union ranks the next highest in terms of welfare for Sri Lanka, followed in order by the SAFTA and the Indo Lanka Free Trade Agreement (ILFTA). However, the proposed Sri Lanka-Bangladesh FTA did not suggest significant welfare gains to both trading partners. Furthermore, it was determined that the SAFTA can be formed without having significant trade diversion effects. Therefore, of the regional trade policy options considered in the study, Sri Lanka should focus on implementing the SAFTA. In addition, the ILFTA can continue to strengthen the SAFTA. The next stage of the SAFTA is transforming the SAFTA into the South Asian Customs Union, which is already a component of the agreement. However, this trade policy option is to be negotiated. Finally, it appears that the SAFTA still needs to find its linkages to multilateral trade liberalisation.
To our knowledge, this item is not available for
download. To find whether it is available, there are three
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
When requesting a correction, please mention this item's handle: RePEc:ris:integr:0485. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jong-Eun Lee)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.