Trade Agreements in South Asia
This paper quantifies the trade creation effects of South Asia’s trade agreements within the region and with the rest of the world. The paper uses an extensive database of bilateral trade covering the manufacturing, agriculture, and service sectors in 190 countries over 1990–2015. The estimates of various specifications of a structural gravity model, including domestic trade flows, capture the potential heterogeneous effects. The main finding is that these effects are in general stronger for trade agreements signed by South Asian countries and even stronger in the case of intraregional agreements. The effects of free trade agreements vary substantially among countries and sectors and between final and intermediate goods. The paper shows that the trade policy implemented in South Asia in the previous decades has been successful, but at the same time the results point toward the existence of clear missing opportunities for the region. The opportunities lay in (i) better backward integration with the rest of the world to improve efficiency and help strengthen exports, and (ii) further deepening of intraregional agreements to continue making progress in regional integration.
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| Format: | Working Paper biblioteca |
| Language: | English English |
| Published: |
Washington, DC: World Bank
2022-10
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| Subjects: | REGIONAL TRADE AGREEMENT, TRADE AGREEMENT, GRAVITY EQUATION, REGIONAL INTEGRATION, GLOBAL VALUE CHAIN, TARRIFF, TRADE BARRIER, TRADE POLICY ANALYSIS, |
| Online Access: | http://documents.worldbank.org/curated/en/099526410182219227/IDU03a368498099da046c10a83d02194328542f4 https://hdl.handle.net/10986/38184 |
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| Summary: | This paper quantifies the trade
creation effects of South Asia’s trade agreements within the
region and with the rest of the world. The paper uses an
extensive database of bilateral trade covering the
manufacturing, agriculture, and service sectors in 190
countries over 1990–2015. The estimates of various
specifications of a structural gravity model, including
domestic trade flows, capture the potential heterogeneous
effects. The main finding is that these effects are in
general stronger for trade agreements signed by South Asian
countries and even stronger in the case of intraregional
agreements. The effects of free trade agreements vary
substantially among countries and sectors and between final
and intermediate goods. The paper shows that the trade
policy implemented in South Asia in the previous decades has
been successful, but at the same time the results point
toward the existence of clear missing opportunities for the
region. The opportunities lay in (i) better backward
integration with the rest of the world to improve efficiency
and help strengthen exports, and (ii) further deepening of
intraregional agreements to continue making progress in
regional integration. |
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