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GTAP Resource #4587

"Can South-South Trade Agreements Reduce Development Deficits? An Exploration of SAARC during 1995-2008"
by Bhattacharya,, Swapan. K. and Gouranga Das

With the rise of India and other Southern engines of growth, the South Asian Association for Regional Cooperation (SAARC) and similar vehicles for South-South regional cooperation have gained in importance. Developing a stochastic frontier gravity model, this paper discusses the presence of significant ‘behind the border’ and ‘beyond the border’ constraints and analyzes the potential synergy between trade and development goals in the context of SAARC. In particular, the paper shows that: (1) there is considerable potential for improvement of trade complementarities among SAARC members; (2) there is long run scope for gains from trade; (3) the country-specific “socio-political-economical-institutional” rigidities form the “behind the border” constraints to trade; (4) realization of trade potential would eliminate development deficits via growth dividends through trade and investment spillover, exchange of skills and knowledge; (5) since tariffs are not an important barrier in this region, emphasis should be given to higher technology cooperation, and cooperation in areas of education, literacy, gender bias, favorable institutions ensuring good governance, social capital, infrastructure, to achieve the SAARC development goals (SDGs). The paper offers policy insights that the removal of ‘behind the border’ barriers, policy coordination, would reduce ‘productivity lags’ and close the ‘gap’.

Keywords: Stochastic Frontier Gravity Model, Trade, Development, SAARC, FTA/PTA.

Resource Details (Export Citation) GTAP Keywords
Category: Other CGE Application
Status: Published
By/In: Journal of South Asian Development
Date: 2014
Created: Das, G. (12/8/2014)
Updated: Batta, G. (12/8/2014)
Visits: 1,284
- Economic development
- Domestic policy analysis
- Multilateral trade negotiations
- Non-Tariff barriers
- Other data bases and data issues
- Asia (South-Central)
- Asia (Southeast)

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