IDEAS home Printed from https://ideas.repec.org/p/ags/pugtwp/331836.html
   My bibliography  Save this paper

Sri Lanka's Free Trade Agreements with its South Asian Neighbours: Economic Versus Strategic/Political Considerations

Author

Listed:
  • Bandara, Jayatilleke S.
  • Yu, Wusheng

Abstract

In recent years, regional trade or free trade agreements (RTAs or FTAs) have proliferated around the world.These RTAs differ vastly in terms of memberships, scope, coverage and motivations. There are different reasons and motivations for forming RTAs in different parts of the world. The recent surge of RTAs cannot be examined by using anyone-size-fits-allexplanation. Very often the purpose of integration is political and the economic consequences are side effects of political decisions. Most of the economic analysis and commentary on RTAs has focused on the economic effects. In empirical studies of RTAs, potential political benefits or actual political benefits of RTAs in terms of externalities have been ignored. The South Asian countries have been engaged in forming bilateral or plurilateral RTAs within the region without much economic gains since the 1990s. It would be natural to explore why these countries are continuing in forming RTAs within the region. A likely answer to this question would be that the motivations behind forming RTAs within the region are not purely based on the potential economic benefits. The strategic and political considerations may very well be more important to member countries. The purpose of this paper is to address this issue using two bilateral FTAs signedbySriLankarespectivelywithIndiaandPakistanasexamples.Morespecifically,byexaminingeconomicgainsofSriLankasFTAswithIndiaandPakistan,itattemptsto answer the question: does a bilateral FTA lead to an improvement of security of a member country and greater peace between two member countries? In this paper we argue that Sri Lanka managed to increase its security by neutralising the pressure from India and gaining military and strategic support from Pakistan for its current war in the north of the island.

Suggested Citation

  • Bandara, Jayatilleke S. & Yu, Wusheng, 2009. "Sri Lanka's Free Trade Agreements with its South Asian Neighbours: Economic Versus Strategic/Political Considerations," Conference papers 331836, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:331836
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/331836/files/4780.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. John Whalley, 1998. "Why Do Countries Seek Regional Trade Agreements?," NBER Chapters, in: The Regionalization of the World Economy, pages 63-90, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Conconi, Paola & Perroni, Carlo, 2009. "Do credible domestic institutions promote credible international agreements?," Journal of International Economics, Elsevier, vol. 79(1), pages 160-170, September.
    2. Paas, Tiiu, 2002. "Gravity Approach for Exploring Baltic Sea Regional Integration in the Field of International Trade," Discussion Paper Series 26379, Hamburg Institute of International Economics.
    3. Lucian Cernat, 2001. "ASSESSING REGIONAL TRADE ARRANGEMENTS: ARE SOUTH–SOUTH RTAs MORE TRADE DIVERTING?," International Trade 0109001, University Library of Munich, Germany.
    4. Baldwin, Richard Edward & Rieder , Roland, 2007. "A Test of Endogenous Trade Bloc Formation Theory on EU Data," East Asian Economic Review, Korea Institute for International Economic Policy, vol. 11(2), pages 77-110, December.
    5. Rukhsana Rasheed & Mazhr Nadeem Ishaq & Muhammad Imran, 2022. "A Performance Analysis of European Union Integration: The Prospects and Lessons for South Asia," iRASD Journal of Economics, International Research Alliance for Sustainable Development (iRASD), vol. 4(1), pages 69-77, March.
    6. Salazar-Xirinachs, Jose M., 2002. "Proliferation of sub-Regional Trade Agreements in the Americas: an assessment of key analytical and policy issues," Journal of Asian Economics, Elsevier, vol. 13(2), pages 181-212.
    7. 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.
    8. M. Ayhan Kose & Guy M. Meredith & Christopher M. Towe, 2005. "How Has NAFTA Affected the Mexican Economy? Review and Evidence," Springer Books, in: Rolf J. Langhammer & Lúcio Vinhas Souza (ed.), Monetary Policy and Macroeconomic Stabilization in Latin America, pages 35-81, Springer.
    9. Waldkirch, Andreas, 2006. "The ‘New Regionalism’: Integration as a Commitment Device for Developing Countries," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 21, pages 397-425.
    10. Richard E. Baldwin, 2011. "Multilateralising Regionalism: Spaghetti Bowls as Building Blocks on the Path to Global Free Trade," Chapters, in: Miroslav N. Jovanović (ed.), International Handbook on the Economics of Integration, Volume I, chapter 2, Edward Elgar Publishing.
    11. Leonardo Baccini, 2010. "Explaining formation and design of EU trade agreements: The role of transparency and flexibility," European Union Politics, , vol. 11(2), pages 195-217, June.
    12. Vicard, Vincent, 2012. "Trade, conflict, and political integration: Explaining the heterogeneity of regional trade agreements," European Economic Review, Elsevier, vol. 56(1), pages 54-71.
    13. Robert W. Staiger & Kyle Bagwell, 1999. "An Economic Theory of GATT," American Economic Review, American Economic Association, vol. 89(1), pages 215-248, March.
    14. Pédussel Wu, Jennifer, 2004. "Measuring and explaining levels of regional economic integration," ZEI Working Papers B 12-2004, University of Bonn, ZEI - Center for European Integration Studies.
    15. Ronald J. Wonnacott, 2011. "Preferential Liberalisation in a Hub-and-Spoke Configuration versus a Free Trade Area," Chapters, in: Miroslav N. Jovanović (ed.), International Handbook on the Economics of Integration, Volume I, chapter 6, Edward Elgar Publishing.
    16. Lee, Hiro & Roland-Holst, David, 1999. "Cooperation or Confrontation in U.S.-Japan Trade? Some General Equilibrium Estimates," Journal of the Japanese and International Economies, Elsevier, vol. 13(2), pages 119-139, June.
    17. Tirthankar Nag, 2021. "Barriers to Cross-border Energy Cooperation and Implications on Energy Security: An Indian Perspective with Reference to Energy Trade in South Asia," Global Business Review, International Management Institute, vol. 22(6), pages 1530-1552, December.
    18. Raihan, Selim, 2012. "SAFTA and the South Asian Countries: Quantitative Assessments of Potential Implications," MPRA Paper 37884, University Library of Munich, Germany.
    19. Piazolo, Daniel, 1997. "Gaining credibility and enhancing economic growth through regional integration: The case for EU membership of Eastern Europe," Kiel Working Papers 837, Kiel Institute for the World Economy (IfW Kiel).
    20. Selim Raihan, 2009. "European Union-India Bilateral Free Trade Agreement: Potential Implications for the Excluded Low-income Economies in Asia and Africa," STUDIES IN TRADE AND INVESTMENT, in: Mia Mikic (ed.), Challenges and Opportunities for Trade and Financial Integration in Asia and the Pacific, volume 67, chapter 4, pages 66-92, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:pugtwp:331836. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/gtpurus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.