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ECONOMIC INTEGRATION AND TRADE PROTECTION: POLICY ISSUES FOR SOUTH ASIAN COUNTRIES
Author(s) -
Kar Mausumi
Publication year - 2018
Publication title -
contemporary economic policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.454
H-Index - 49
eISSN - 1465-7287
pISSN - 1074-3529
DOI - 10.1111/coep.12239
Subject(s) - protectionism , economic integration , international economics , international trade , context (archaeology) , economics , trade barrier , clothing , international free trade agreement , rules of origin , commercial policy , competition (biology) , gravity model of trade , bilateral trade , geography , ecology , archaeology , china , biology
This article shows that economic integration acts as a viable instrument of protection for individual countries, when benefits of discriminatory protectionist policies like the multifiber arrangement are withdrawn. Using United Nations Conference on Trade and Development statistics for 1995–2013 and applying an extended version of the augmented gravity model, we show that the formation of a trade bloc like the South Asian Free Trade Area unambiguously promotes member countries' exports of textile and clothing at both intra‐bloc and extra‐bloc levels. The expansion of south‐south trade is facilitated by the growing intraregional trade in intermediate goods. The creation of a regional value chain can shield the smaller countries in the context of enhanced global competition. ( JEL F14, F15, F13)