GTAP Resources: Resource Display
| GTAP Resource #1744 |
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"Is South Asian Economic Cooperation Sustainable?: Strategy for Meaningful Transition from SAPTA to SAFTA " by Mohanty, Saroj Abstract Economic cooperation between South Asian countries has been consolidating rapidly over a period of time, and the region has entered into a new phase of cooperation following signing of the South Asian Free Trade Area (SAFTA) in January 2004. There has been scepticism about the sustainability of the regional caucus, citing the internal contradictions in the political sphere and also the poor economic performances of the regional partners. There is discussion in the literature that South-South regional trading arrangements (RTAs) have high degree of mortality rate as compared to North-North and North-South type of RTAs. If such an assertion is true, the reservations raised about the sustainability of SAFTA need to be examined. It may be noted that intra-regional trade in South Asia is picking up substantially following implementation of the South Asian Preferential Trade Area (SAPTA) since 1995. Under the SAPTA process, the initial Rounds were, rather, more populist whereas credible initiatives were noticed in the latter Rounds of SAPTA. If the changing perception of the regional partners is an index of shifting economic and political climate in the region, further trade liberalisation under both SAPTA and SAFTA processes would result in further enhancement of welfare in the region. For achieving speedy progress in the region through regional initiatives, substantial benifits of the trade liberalisation under SAFTA should be realised in the early phases of liberalisation, and less important sectors may be back loaded in the process of further opening up of the region. In this paper we are attempting to examine the structure of alternative strategies, which would bring substantial benefits to the region in the early Rounds of SAFTA negotiations. We have assumed that complete liberalisation of the goods sectors may be achieved in three Rounds of SAFTA Negotiations. We postulate that credible negotiation strategy based on liberalising the most important sectors first may yield better welfare effects to region than populist approach of choosing less important sectors first and keeping most important sectors for liberalisation at the end. The paper will also present the order of the sectors to be considered for trade negotiations in different Rounds of SAFTA negotiations to optimise welfare gains of the region using a CGE model. |
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Public Access  GTAP Resource 1744 (216.9 KB) Replicated: 0 time(s)Restricted Access No documents have been attached. Special Instructions No instructions have been specified. |
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Last Modified: 9/15/2023 2:05:45 PM
