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South Asia: Multilateral trade agreements and untapped regional trade integration
Author(s) -
Kumar Rakesh
Publication year - 2021
Publication title -
international journal of finance and economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.505
H-Index - 39
eISSN - 1099-1158
pISSN - 1076-9307
DOI - 10.1002/ijfe.1941
Subject(s) - openness to experience , international trade , economic integration , economics , south asia , regional integration , sri lanka , trade barrier , free trade , international free trade agreement , revealed comparative advantage , regional trade , international economics , trade facilitation , comparative advantage , business , socioeconomics , psychology , social psychology , ethnology , tanzania , history
This paper presents the facts on existing and future prospects of regional trade integration in South Asia in the backdrop of multilateral trade agreements. The study applies trade intensity index of four largest South Asian countries (India, Bangladesh, Pakistan, and Sri Lanka) to estimates the short‐ and long‐run trade co‐integration in autoregressive multilateral framework. The results highlights that long‐run trade complementarities are found between the trade of Pakistan and Sri Lanka, while short‐run trade complementarities exist between India and Bangladesh, and between India and Sri Lanka. Pakistan and Bangladesh are found close trade competitors in South Asia in short run. The findings are important for policy implication which highlights how to bridge the untapped regional trade integration in South Asia. If trade barriers are overcome, the greater degree of trade openness can play vital role in achieving balanced regional economic development. India being the largest economy can play key role in striving the South Asian Association for Regional Cooperation (SAARC) process for pursuing its objectives.