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    How Effective Is The Free Trade Agreement in South Asia? An Empirical Investigation

    200620_200620.pdf (349.8Kb)
    Access Status
    Open access
    Authors
    Islam, A.
    Bloch, Harry
    Salim, Ruhul
    Date
    2014
    Type
    Journal Article
    
    Metadata
    Show full item record
    Citation
    Islam, A. and Bloch, H. and Salim, R. 2014. How Effective Is The Free Trade Agreement in South Asia? An Empirical Investigation. International Review of Applied Economics. 28 (5): pp. 611-627.
    Source Title
    International Review of Applied Economics
    DOI
    10.1080/02692171.2014.918940
    ISSN
    02692171
    School
    School of Economics and Finance
    Remarks

    This is an Author's Accepted Manuscript of an article published in International Review of Sport & Economics, 2014, copyright Taylor & Francis, available online at: <a href="http://www.tandfonline.com/">http://www.tandfonline.com/</a>. DOI: 10.1080/02692171.2014.918940

    URI
    http://hdl.handle.net/20.500.11937/36292
    Collection
    • Curtin Research Publications
    Abstract

    We investigate the efficacy of preferential trade liberalization in changing the observed trade pattern among the South Asian countries that have entered into the South Asian Free Trade Agreement (SAFTA). Although in its nascent stage, some data are now available to provide an ex-post evaluation of the performance of this bloc. Using these data, we find no empirical evidence of trade creation among SAFTA members, which is not surprising given that tariff concessions in SAFTA are small and are offset by complicated rules of origin procedure. However, a substantial and statistically significant increase in exports from SAFTA members to the rest of the world is found. Several panel strategies are used to check the sensitivity of the results against the assumptions of the estimation strategies. As some key coefficient estimates are found to differ across estimation methods, policymakers in South Asia need to use care in relying on the results from empirical studies, including our own, in formulating their trade policies.

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