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The South Asian Free Trade Agreement

Author

Listed:
  • Dushni Weerakoon

    (Deputy Director and Fellow Institute of Policy Studies of Sri Lanka)

  • Jayanthi Thennakoon

    (Research Officer Institute of Policy Studies of Sri Lanka)

Abstract

The South Asian Free Trade Agreement (SAFTA), due to have been implemented starting July 2006, has adopted a negative list approach permitting member countries to potentially exclude a substantial share of intraregional trade from the tariff liberalisation process. This study finds that the excluded trade amounts to nearly 53 per cent of current import trade amongst South Asian countries, bringing into question the future prospects for meaningful economic cooperation under a regional framework. At the very least, if the SAFTA treaty had built on the existing bilateral FTAs in the region, it would eventually have come to supersede such agreements. Unfortunately, the regional initiative has lagged well behind the bilateral process, and is likely to be overtaken by alternative strategic trade policy initiatives cropping up in the region. It seems likely that attempts at economic integration of the South Asian region under the SAARC framework is liable to fragment.

Suggested Citation

  • Dushni Weerakoon & Jayanthi Thennakoon, 2008. "The South Asian Free Trade Agreement," Journal of South Asian Development, , vol. 3(1), pages 135-149, June.
    • Handle: RePEc:sae:soudev:v:3:y:2008:i:1:p:135-149
    DOI: 10.1177/097317410700300106
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    References listed on IDEAS

    as
    1. World Bank, 2004. "Trade Policies in South Asia : An Overview, Volume 2. An Overview," World Bank Publications - Reports 15657, The World Bank Group.
    2. Jaime De Melo & Arvind Panagariya & Dani Rodrik, 2015. "The New Regionalism: A Country Perspective," World Scientific Book Chapters, in: Developing Countries in the World Economy, chapter 14, pages 323-357, World Scientific Publishing Co. Pte. Ltd..
    3. Arvind Panagariya, 2003. "South Asia: Does Preferential Trade Liberalisation Make Sense?," The World Economy, Wiley Blackwell, vol. 26(9), pages 1279-1291, September.
    4. Jayatilleke S. Bandara & Wusheng Yu, 2003. "How Desirable is the South Asian Free Trade Area? A Quantitative Economic Assessment," The World Economy, Wiley Blackwell, vol. 26(9), pages 1293-1323, September.
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