Regional trade in south Asia-impediments and the way forward
The paper sets out to suggest that regional trade between South Asia is quite low when compared to other regional blocks like NAFTA, EU 15, ASEAN, and MERCOUSER. The paper identifies non cooperation between India and Pakistan to be the main reason behind low trade in South Asia. The paper focuses on the pending trade issues between both countries that are preventing India and Pakistan to increase bilateral trade and economic cooperation. The first issue discussed in the paper is granting of MFN status to India by Pakistan. The paper finds that it is in the benefit of both countries if Pakistan gives MFN status to India. But before such a step is taken, it is essential that Pakistan moves from a positive list approach to a negative list approach. Pakistan can include industries like textiles in the negative list to prevent the flood of cheap Indian textiles. Once MFN status is granted to India, Pakistan would be able to raise more substantive issues, notably Indian NTBs, subsidies, and protective tariffs. Currently India practices various forms of NTBs against Pakistan. The visa restrictions and absence of financial services are the major NTBs. Such NTBs have prevented Pakistan to export more to India. Another trade issue highlighted in the paper is that of transit facility. India does not provide Pakistan a transit route to Nepal and Bhuttan. In contrast Pakistan has provided Afghanistan transit route to India, though Pakistan does not allow India a transit route to Afghanistan or beyond. The paper finds that there is a high risk of informal trade in case Pakistan provides India with the land route to Afghanistan through its territory. It is anticipated that most Indian exports to Afghanistan would be smuggled back into Pakistan affecting Pakistan’s local industry. The transit facility is by far the most complicated trade issue of the three. Though the paper concludes in favor of granting India MFN and against the imposition of NTBs, It only gives a conditional recommendation in favor of granting India transit route to Afghanistan in case India provides Pakistan transit route to Nepal and Bhuttan.
|Date of creation:||Oct 2010|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://mpra.ub.uni-muenchen.de
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Murshed, S.M. & Mamoon, D., 2007. "On the Costs of Not Loving Thy Neighbour as Thyself," ISS Working Papers - General Series 18748, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:27010. 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: (Ekkehart Schlicht)
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.