What Does Regional Trade in South Asia Reveal about Future Trade Integration? Some Empirical Evidence
In 1995 the seven South Asian countries-Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan, and Sri Lanka-initiated a multilateral framework for regionwide integration under the South Asian Preferential Trade Agreement (SAPTA). In a recent initiative, members agreed that SAPTA would begin the...
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| Format: | Policy Research Working Paper |
| Language: | English |
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World Bank, Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/2005/02/5695807/regional-trade-south-asia-reveal-future-trade-integration-some-empirical-evidence http://hdl.handle.net/10986/8972 |
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okr-10986-89722021-04-23T14:02:42Z What Does Regional Trade in South Asia Reveal about Future Trade Integration? Some Empirical Evidence Pitigala, Nihal ABSOLUTE TERMS ACCOUNTING AGRICULTURAL PRODUCTS AGRICULTURE APPROPRIATE TECHNOLOGY BALANCE OF PAYMENTS BILATERAL AGREEMENTS BILATERAL TRADE CERTAIN EXTENT COMPARATIVE ADVANTAGE COMPARATIVE ADVANTAGES COMPETITIVENESS CURRENCY DEREGULATION DIRECT INVESTMENT DOMESTIC PRICES DOMESTIC SUPPLY ECONOMIC DEVELOPMENT ECONOMIC INTEGRATION ECONOMIC TRENDS ECONOMISTS EMPIRICAL EVIDENCE EXCHANGE RATE EXCHANGE RATES EXPORT EARNINGS EXPORT GROWTH EXPORTING COUNTRY EXPORTS FISH FOOD PRODUCTS FREE TRADE FREE TRADE AGREEMENT FREE TRADE AGREEMENTS FREE TRADE AREA FUELS GDP IMPORT DEMAND IMPORTS INDUSTRIAL PRODUCTS INTERNATIONAL TRADE INTRA-REGIONAL TRADE MANUFACTURED GOODS MARGINS MFA MULTILATERAL FRAMEWORK NEWLY INDUSTRIALIZED COUNTRIES NON-TARIFF BARRIERS OIL PREFERENTIAL TRADE PREFERENTIAL TRADE AGREEMENT PREFERENTIAL TRADING ARRANGEMENTS QUOTAS REGIONAL AGREEMENT REGIONAL AGREEMENTS REGIONAL ARRANGEMENTS REGIONAL INTEGRATION REGIONAL SOURCES REGIONAL TRADE REGIONAL TRADE AGREEMENT REGIONAL TRADE AGREEMENTS REGIONAL TRADE ARRANGEMENT REGIONAL TRADING ARRANGEMENTS SUBSTITUTION TARIFF BARRIERS TARIFF PREFERENCES TRADE AGREEMENTS TRADE BLOCS TRADE DIVERSION TRADE FLOWS TRADE LIBERALIZATION TRADE PATTERNS TRADE POLICIES TRADE POLICY TRADE POLICY REFORMS TRADE REFORMS TRADE STRUCTURE TRADE VOLUME TRADING PARTNERS TRANSACTION COSTS TRANSPORT COSTS WELFARE EFFECTS WORLD TRADE WORLD TRADE ORGANIZATION WTO In 1995 the seven South Asian countries-Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan, and Sri Lanka-initiated a multilateral framework for regionwide integration under the South Asian Preferential Trade Agreement (SAPTA). In a recent initiative, members agreed that SAPTA would begin the transformation into a South Asian Free Trade Area (SAFTA) by the beginning of 2006, with full implementation completed between 2009 and 2013. The impetus toward regional preferential trading arrangements and greater regional economic integration raises many important issues, both for the South Asian region as a whole and for the individual countries. The author uses the natural trading partners hypothesis as the empirical criterion to assess the potential success of a South Asian trading bloc. Using various definitions of the natural trading partner hypothesis-based on trade volume, geographic proximity, and the complementarity approaches-the author demonstrates that the South Asian countries can be characterized only moderately as natural trading partners. This characterization is, however, largely a consequence of previous impediments to trade among regional members. The author further demonstrates through additional statistical measures-including revealed comparative advantage indices, trade concentration, and trade competition profiles-that the trade structures that have evolved among the South Asian Countries may not facilitate a rapid increase in intra-regional trade. But there is evidence that previous unilateral trade liberalization efforts in the South Asian countries have already had a positive impact in boosting both intra- and extra-regional trade. Continuing the process of unilateral liberalization, in parallel with regional integration, would aid the South Asian countries to continue to diversify their still narrow export bases and potentially evolve new comparative advantages and complementarities that could facilitate the successful implementation of SAFTA. 2012-06-25T21:19:47Z 2012-06-25T21:19:47Z 2005-02 http://documents.worldbank.org/curated/en/2005/02/5695807/regional-trade-south-asia-reveal-future-trade-integration-some-empirical-evidence http://hdl.handle.net/10986/8972 English Policy Research Working Paper; No. 3497 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research South Asia |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
ABSOLUTE TERMS ACCOUNTING AGRICULTURAL PRODUCTS AGRICULTURE APPROPRIATE TECHNOLOGY BALANCE OF PAYMENTS BILATERAL AGREEMENTS BILATERAL TRADE CERTAIN EXTENT COMPARATIVE ADVANTAGE COMPARATIVE ADVANTAGES COMPETITIVENESS CURRENCY DEREGULATION DIRECT INVESTMENT DOMESTIC PRICES DOMESTIC SUPPLY ECONOMIC DEVELOPMENT ECONOMIC INTEGRATION ECONOMIC TRENDS ECONOMISTS EMPIRICAL EVIDENCE EXCHANGE RATE EXCHANGE RATES EXPORT EARNINGS EXPORT GROWTH EXPORTING COUNTRY EXPORTS FISH FOOD PRODUCTS FREE TRADE FREE TRADE AGREEMENT FREE TRADE AGREEMENTS FREE TRADE AREA FUELS GDP IMPORT DEMAND IMPORTS INDUSTRIAL PRODUCTS INTERNATIONAL TRADE INTRA-REGIONAL TRADE MANUFACTURED GOODS MARGINS MFA MULTILATERAL FRAMEWORK NEWLY INDUSTRIALIZED COUNTRIES NON-TARIFF BARRIERS OIL PREFERENTIAL TRADE PREFERENTIAL TRADE AGREEMENT PREFERENTIAL TRADING ARRANGEMENTS QUOTAS REGIONAL AGREEMENT REGIONAL AGREEMENTS REGIONAL ARRANGEMENTS REGIONAL INTEGRATION REGIONAL SOURCES REGIONAL TRADE REGIONAL TRADE AGREEMENT REGIONAL TRADE AGREEMENTS REGIONAL TRADE ARRANGEMENT REGIONAL TRADING ARRANGEMENTS SUBSTITUTION TARIFF BARRIERS TARIFF PREFERENCES TRADE AGREEMENTS TRADE BLOCS TRADE DIVERSION TRADE FLOWS TRADE LIBERALIZATION TRADE PATTERNS TRADE POLICIES TRADE POLICY TRADE POLICY REFORMS TRADE REFORMS TRADE STRUCTURE TRADE VOLUME TRADING PARTNERS TRANSACTION COSTS TRANSPORT COSTS WELFARE EFFECTS WORLD TRADE WORLD TRADE ORGANIZATION WTO |
| spellingShingle |
ABSOLUTE TERMS ACCOUNTING AGRICULTURAL PRODUCTS AGRICULTURE APPROPRIATE TECHNOLOGY BALANCE OF PAYMENTS BILATERAL AGREEMENTS BILATERAL TRADE CERTAIN EXTENT COMPARATIVE ADVANTAGE COMPARATIVE ADVANTAGES COMPETITIVENESS CURRENCY DEREGULATION DIRECT INVESTMENT DOMESTIC PRICES DOMESTIC SUPPLY ECONOMIC DEVELOPMENT ECONOMIC INTEGRATION ECONOMIC TRENDS ECONOMISTS EMPIRICAL EVIDENCE EXCHANGE RATE EXCHANGE RATES EXPORT EARNINGS EXPORT GROWTH EXPORTING COUNTRY EXPORTS FISH FOOD PRODUCTS FREE TRADE FREE TRADE AGREEMENT FREE TRADE AGREEMENTS FREE TRADE AREA FUELS GDP IMPORT DEMAND IMPORTS INDUSTRIAL PRODUCTS INTERNATIONAL TRADE INTRA-REGIONAL TRADE MANUFACTURED GOODS MARGINS MFA MULTILATERAL FRAMEWORK NEWLY INDUSTRIALIZED COUNTRIES NON-TARIFF BARRIERS OIL PREFERENTIAL TRADE PREFERENTIAL TRADE AGREEMENT PREFERENTIAL TRADING ARRANGEMENTS QUOTAS REGIONAL AGREEMENT REGIONAL AGREEMENTS REGIONAL ARRANGEMENTS REGIONAL INTEGRATION REGIONAL SOURCES REGIONAL TRADE REGIONAL TRADE AGREEMENT REGIONAL TRADE AGREEMENTS REGIONAL TRADE ARRANGEMENT REGIONAL TRADING ARRANGEMENTS SUBSTITUTION TARIFF BARRIERS TARIFF PREFERENCES TRADE AGREEMENTS TRADE BLOCS TRADE DIVERSION TRADE FLOWS TRADE LIBERALIZATION TRADE PATTERNS TRADE POLICIES TRADE POLICY TRADE POLICY REFORMS TRADE REFORMS TRADE STRUCTURE TRADE VOLUME TRADING PARTNERS TRANSACTION COSTS TRANSPORT COSTS WELFARE EFFECTS WORLD TRADE WORLD TRADE ORGANIZATION WTO Pitigala, Nihal What Does Regional Trade in South Asia Reveal about Future Trade Integration? Some Empirical Evidence |
| geographic_facet |
South Asia |
| relation |
Policy Research Working Paper; No. 3497 |
| description |
In 1995 the seven South Asian countries-Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan, and Sri Lanka-initiated a multilateral framework for regionwide integration under the South Asian Preferential Trade Agreement (SAPTA). In a recent initiative, members agreed that SAPTA would begin the transformation into a South Asian Free Trade Area (SAFTA) by the beginning of 2006, with full implementation completed between 2009 and 2013. The impetus toward regional preferential trading arrangements and greater regional economic integration raises many important issues, both for the South Asian region as a whole and for the individual countries. The author uses the natural trading partners hypothesis as the empirical criterion to assess the potential success of a South Asian trading bloc. Using various definitions of the natural trading partner hypothesis-based on trade volume, geographic proximity, and the complementarity approaches-the author demonstrates that the South Asian countries can be characterized only moderately as natural trading partners. This characterization is, however, largely a consequence of previous impediments to trade among regional members. The author further demonstrates through additional statistical measures-including revealed comparative advantage indices, trade concentration, and trade competition profiles-that the trade structures that have evolved among the South Asian Countries may not facilitate a rapid increase in intra-regional trade. But there is evidence that previous unilateral trade liberalization efforts in the South Asian countries have already had a positive impact in boosting both intra- and extra-regional trade. Continuing the process of unilateral liberalization, in parallel with regional integration, would aid the South Asian countries to continue to diversify their still narrow export bases and potentially evolve new comparative advantages and complementarities that could facilitate the successful implementation of SAFTA. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Pitigala, Nihal |
| author_facet |
Pitigala, Nihal |
| author_sort |
Pitigala, Nihal |
| title |
What Does Regional Trade in South Asia Reveal about Future Trade Integration? Some Empirical Evidence |
| title_short |
What Does Regional Trade in South Asia Reveal about Future Trade Integration? Some Empirical Evidence |
| title_full |
What Does Regional Trade in South Asia Reveal about Future Trade Integration? Some Empirical Evidence |
| title_fullStr |
What Does Regional Trade in South Asia Reveal about Future Trade Integration? Some Empirical Evidence |
| title_full_unstemmed |
What Does Regional Trade in South Asia Reveal about Future Trade Integration? Some Empirical Evidence |
| title_sort |
what does regional trade in south asia reveal about future trade integration? some empirical evidence |
| publisher |
World Bank, Washington, DC |
| publishDate |
2012 |
| url |
http://documents.worldbank.org/curated/en/2005/02/5695807/regional-trade-south-asia-reveal-future-trade-integration-some-empirical-evidence http://hdl.handle.net/10986/8972 |
| _version_ |
1764407179551440896 |