Saafta
Welfare Effects of South Asian Free Trade Area (SAFTA)
Regional Trading Arrangements (RTAs) in South Asia: 1 Implications for the Bangladesh Economy
Selim Raihan2 M. A. Razzaque3
January 2007
Paper prepared for the UNDP Regional Centre Colombo. Dr. Selim Raihan is an Assistant Professor, Department of Economics, University of Dhaka, Bangladesh. sraihan_duecon@yahoo.com 3 Dr. M. A. Razzaque is an Assistant Professor, Department of Economics, University of Dhaka, Bangladesh. razzaque_duecon@yahoo.com
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Welfare Effects of South Asian Free Trade Area (SAFTA)
Regional Trading Arrangements (RTAs) in South Asia: Implications for the Bangladesh Economy
Selim Raihan and M. A. Razzaque I. Introduction Recently, there has been increased interest in regional economic integration in the South Asia region. And with the collapse of the WTO negotiations in late July 2006, it is expected that interest in regional trading arrangements will increase. A first step in this direction came in 1995 when the SAARC Preferential Trading Arrangement (SAPTA) was signed. In early 2004, the South Asia Free Trade Agreement (SAFTA) was signed. The SAFTA is a parallel initiative to the multilateral trade liberalization commitments of SAARC member countries. SAFTA has come into force from 1 July 2006, with the aim of reducing tariffs for intraregional trade among the 7 SAARC members. It has been agreed that for the South Asian countries Pakistan and India will eliminated all tariffs by 2012, Sri Lanka by 2013 and Bangladesh, Bhutan, Maldives and Nepal by 2015. Also, there have been other initiatives for regional integration or bilateral preferential trading arrangements involving the South Asian countries, especially Bangladesh. Examples are BIMSTEC, the Generalized System of Trade Preferences (GSTP) negotiations, Bangladesh’s bilateral trade agreements with the countries within the region (e.g. India, Pakistan) or country outside the region (USA). There have been some
Regional Trading Arrangements (RTAs) in South Asia: 1 Implications for the Bangladesh Economy
Selim Raihan2 M. A. Razzaque3
January 2007
Paper prepared for the UNDP Regional Centre Colombo. Dr. Selim Raihan is an Assistant Professor, Department of Economics, University of Dhaka, Bangladesh. sraihan_duecon@yahoo.com 3 Dr. M. A. Razzaque is an Assistant Professor, Department of Economics, University of Dhaka, Bangladesh. razzaque_duecon@yahoo.com
2
1
1
Welfare Effects of South Asian Free Trade Area (SAFTA)
Regional Trading Arrangements (RTAs) in South Asia: Implications for the Bangladesh Economy
Selim Raihan and M. A. Razzaque I. Introduction Recently, there has been increased interest in regional economic integration in the South Asia region. And with the collapse of the WTO negotiations in late July 2006, it is expected that interest in regional trading arrangements will increase. A first step in this direction came in 1995 when the SAARC Preferential Trading Arrangement (SAPTA) was signed. In early 2004, the South Asia Free Trade Agreement (SAFTA) was signed. The SAFTA is a parallel initiative to the multilateral trade liberalization commitments of SAARC member countries. SAFTA has come into force from 1 July 2006, with the aim of reducing tariffs for intraregional trade among the 7 SAARC members. It has been agreed that for the South Asian countries Pakistan and India will eliminated all tariffs by 2012, Sri Lanka by 2013 and Bangladesh, Bhutan, Maldives and Nepal by 2015. Also, there have been other initiatives for regional integration or bilateral preferential trading arrangements involving the South Asian countries, especially Bangladesh. Examples are BIMSTEC, the Generalized System of Trade Preferences (GSTP) negotiations, Bangladesh’s bilateral trade agreements with the countries within the region (e.g. India, Pakistan) or country outside the region (USA). There have been some