What Drive Trade Costs? South Asia and Beyond

2020 ◽  
Vol 21 (2) ◽  
pp. 258-280
Author(s):  
Mamta Kumari ◽  
Nalin Bharti
Keyword(s):  
South Asia ◽  
Financial Development ◽  
South Asian ◽  
Regional Integration ◽  
Statistical Tests ◽  
Trade Costs ◽  
Asia Pacific ◽  
Global Integration ◽  
Regional Trade ◽  
Trade Facilitation

Higher trade costs in developing countries have received enormous attention during the recent past. In this context, it is imperative to revisit the factors contributing to such higher trade costs. This article attempts to explore the major determinants of trade costs conceptually and empirically. Further, the study endeavours to solve the puzzle of higher trade costs in the South Asian perspective. Using panel data of 93 countries from 2007 to 2015, the study tends to uncover major determinants of trade costs between South Asian countries and their two proximate regional blocks, namely Asia-Pacific Economic Cooperation (APEC) and Association of Southeast Asian Nations (ASEAN). In estimating the model, the study prefers to use fixed-effect estimation technique, owing to the results of statistical tests carried out to choose the most appropriate model for the estimation. The findings of the study reveal that trade facilitation, political corruption and financial development affect intra-regional trade costs of South Asia significantly. Trade facilitation influences trade costs between South Asia and ASEAN. Moreover, trade facilitation and financial development affect trade costs between South Asia and APEC. The diagnoses of South Asian intra and inter-regional trade costs can push forward ongoing efforts at unlocking the potential of regional integration as well as global integration of the region.

scholarly journals Economic Implications of Deeper South Asian–Southeast Asian Integration: A CGE Approach

2015 ◽  
Vol 14 (3) ◽  
pp. 63-81 ◽  
Author(s):  
Ganeshan Wignaraja ◽  
Peter Morgan ◽  
Michael G. Plummer ◽  
Fan Zhai
Keyword(s):  
Southeast Asia ◽  
South Asia ◽  
South Asian ◽  
Computable General Equilibrium ◽  
Regional Cooperation ◽  
Computable General Equilibrium Model ◽  
Trade Costs ◽  
Regional Trade ◽  
Economic Implications ◽  
Asian Integration

Using a computable general equilibrium model, this paper estimates the potential gains from deepening integration across South Asia and Southeast Asia. If the two regions succeed in dropping inter-regional tariffs, reducing non-tariff barriers by 50 percent, and decreasing inter-regional trade costs by 15 percent—which the paper suggests are ambitious but nevertheless attainable—welfare in South Asia and Southeast Asia would rise by 8.9 percent and 6.4 percent of GDP, respectively, by 2030. Hence, we conclude that deepening South Asian regional cooperation together with building links to Southeast Asia would pay off rich dividends.

scholarly journals Analisis Teori Fungsionalisme pada Integrasi Kawasan Asia Selatan (Studi Kasus Konflik India-Pakistan di wilayah Kashmir)

2020 ◽  
Vol 1 (1) ◽  
pp. 181-195
Author(s):  
Tri Shinta
Keyword(s):  
South Asia ◽  
South Asian ◽  
Regional Integration ◽  
Regional Cooperation ◽  
The South ◽  
Member States ◽  
The Real ◽  
Complex Region ◽  
Good Relation

South Asia is a complex region. It is marked with the emergence and continuity of the conflict. India-Pakistan conflict is one of them. This conflict begun on 1947 and the biggest of conflict divided into three conflicts. Functionalism according to David Mitrany in “A Working Peace System” believes that Region Integration is trusted to make the conflict lower and good relation among state. This perception applied on 1985 in South Asia, which known with SAARC (The South Asian Association for Regional Cooperation). The fact, this conflict still continues till today. However, this paper seeks for the analysis of how’s functionalism theory explain the conflict of India-Pakistan on the regional integration: is that the conflict form an ideal integration of Sout Asia and decline the conflict, or conversely. Furthermore, the result of this research describes that Functionalism is not success on explaining South Asia integration, which means the India-Pakistan conflict still exist and the real integration among member states still not exist yet.

Impact of Belt and Road Initiative on India-south Asia Regional Trade Integration

2021 ◽  
pp. 9-14
Author(s):  
Mst. Sahiba Mahbub
Keyword(s):  
South Asia ◽  
South Asian ◽  
Free Trade Agreements ◽  
Trade Agreements ◽  
Chinese Government ◽  
Belt And Road Initiative ◽  
Trade Integration ◽  
Regional Trade ◽  
Belt And Road ◽  
Integration Strategies

Belt and Road Initiative (BRI) is a standout amongst the latest and remarkable regional economic integration strategies of Chinese government. This initiative incorporates South Asia which is a piece of Asian territory. From past researches we came to know that regional trade intensity among south Asian nations is low. The majority of the analysts finished up by computing the general list at beneath 0.5. Notwithstanding various multilateral and reciprocal Free Trade Agreements (FTA) exchange coordination did not increment attractively. India has reciprocal FTAs with every south Asian nation. Also this sub region is among the significant exchange accomplices of India. There are double suppositions of India about Chinese BRI initiative. In this research we found an answer of an inquiry that, regardless of whether BRI has sway on trade coordination among India and south Asian nations. We utilized a blended gravity model equation from Hayakawa et.al (2015) and Weerehewa (2009) inquire about papers to assess the aftereffects of variables.

Investigating the Role of Regional Economic Integration on Growth: Fresh Insights from South Asia

2020 ◽  
pp. 097491012097480
Author(s):  
Muhammad Ibrahim Shah
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
South Asia ◽  
South Asian ◽  
Economic Integration ◽  
Regional Integration ◽  
Policy Implications ◽  
Regional Economic Integration ◽  
Asian Countries ◽  
Regional Economic

Regional economic integration is the key to achieving prosperity and stability. However, intra-regional trade in South Asia accounts for not more than 5%–6% of their total trade. This study aims to examine the role played by regional economic integration in determining the economic growth of South Asian countries over the period 1980–2015. Since shocks in one country may affect another country in the region, this is taken into account in the article by employing methodologies that are robust to cross sectional dependence. Specifically, continuously-updated and bias-corrected (CupBC) of Bai et al. (2009) and Dumitrescu–Hurlin panel causality test (2012) have been employed to estimate long-run coefficients and determine the direction of relationship among the variables, respectively. The findings suggest that economic integration increases economic growth significantly in this region. However, contrary to popular belief, both democracy and human capital are negatively related to economic growth. Bidirectional causality is found between economic integration and democracy, regional integration and human capital, democracy and human capital and, democracy and labor. This study also presents several policy implications for South Asian countries.

South Asian Regional Integration – Challenges and Prospects

2014 ◽  
Vol 15 (2) ◽  
pp. 299-316
Author(s):  
MOHD AMINUL KARIM
Keyword(s):  
South Asia ◽  
South Asian ◽  
Regional Integration ◽  
Future Prospects ◽  
Regional Economic ◽  
High Politics

AbstractSouth Asian regional integration is seemingly confronting many challenges. The aim of this paper is to identify those challenges and also look for prospects. Although regional integration in South Asia has adopted a kind of institutionalization, it is yet to deliver any concrete outcomes. High-politics and the not-so-conducive regional economic structures hinder any effectual culmination. However, constructivism, as a theory, is given due credence in this paper when looking for future prospects. The paper highlights the issues, and attempts to offer certain policy directions by analyzing the challenges and identifying the prospects in the on-going integration/cooperation process.

scholarly journals Regional trade and investment value chains in South Asia: Perspectives from Pakistani enterprises

2019 ◽  
Vol 1 (2) ◽  
pp. 165-180
Author(s):  
Syed Shujaat Ahmed ◽  
Asif Javed ◽  
Rabia Manzoor
Keyword(s):  
South Asia ◽  
Regional Integration ◽  
Single Channel ◽  
Political Stability ◽  
Business Community ◽  
Value Chains ◽  
Trade Integration ◽  
Regional Trade ◽  
Investment Volume ◽  
Trade And Investment

Background: South Asian countries still maintained barriers to trade including regulatory restrictions on Foreign Direct Investment, non-tariff barriers and lack of banking channels. These restrictions are not only affecting the regional trade integration but also affecting the transfer of skills and technology among the member countries. Objectives: This study examines the factors that are inhibiting the development of regional integration for Pakistan in South Asia. Methods: The study conducted interviews of business community in Karachi and Peshawar regarding regional trade, investment and value chains. Result: The results pointed out that political difference with neighboring countries affect the regional integration in the form of lower trade and investment volume. Engaging in value chains is a way forward to promote trade flows and regional integration which will be beneficial for the trading partners in terms of economic growth and employment. Conclusion: Pakistan contains weak investment outlay in South Asia as currently investment agreements with only Bangladesh and Sri Lanka existed. The reasons for lower FDI inflows in Pakistan include lack of political stability, inadequate infrastructure and non-transparent government regulations. Implications: This study provides tentative picture of regional trade and investment in South Asia and the result generated can be used by concerned authorities, investors of those areas. Recommendations: Simplifications in investment laws, piracy of intellectual property, relaxing current account restriction and single channel for streamlining information regarding support, opportunities, investment and market rules and regulations can enhance the investment volume.

What Does Gravity Model Reveal About SAFTA?

2010 ◽  
Vol 6 (3) ◽  
pp. 185-197
Author(s):  
Renu Verma ◽  
Jaidev Dubey
Keyword(s):  
Sri Lanka ◽  
South Asia ◽  
South Asian ◽  
Regional Cooperation ◽  
Trade Agreement ◽  
Trade Agreements ◽  
Asian Countries ◽  
The South ◽  
Regional Trade ◽  
Multilateral Trade

During last decade, the stalemate in multilateral trade negotiations under the framework of World Trade Organization (WTO) regime has provided impetus to the signing of regional trade agreements world over .South Asia is not an exception to this trend and has been involved in setting up its own bilateral and Regional Trade Agreements (RTAs). Most commonly cited cooperation agreements are Agreement on Trade and Commerce between India and Bhutan(1972), India-Nepal Bilateral Trade and Transit Treaties(1991), India–Sri Lanka Bilateral Free Trade Area(1998) Bangkok Agreement (1975),  Bangladesh, India, Myanmar, Sri Lanka, Thailand Economic Cooperation (BIMST-EC-2004) and the Indian Ocean Rim Association of Regional Cooperation (IOR-ARC-1997). One of  the most significant steps  towards regional economic cooperation in the history of South Asian countries, was taken with signing of The South Asian Association for Regional Cooperation (SAARC) formed in 1985 with the objective of exploiting “accelerated economic growth, social progress and cultural development in the region” for the welfare of the peoples of South Asia. And then seven South Asian countries—Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan, and Sri Lanka—initiated a framework for region-wide integration under the South Asian Preferential Trade Agreement (SAPTA) in 1995. In order to further cement the regional economic relations and overcome some impediments of SAPTA, the South Asia Free Trade Agreement (SAFTA) was signed in early 2004, which came into force on 1st July 2006. The SAFTA is a parallel initiative to the multilateral trade liberalization commitments of the South Asian Association for Regional Cooperation (SAARC) member countries. SAFTA aims to reduce tariffs for intraregional trade among the seven SAARC member countries. It has been agreed that for the South Asian countries, Pakistan and India will eliminate all tariffs by 2012, Sri Lanka by 2013 and Bangladesh, Bhutan, Maldives and Nepal by 2015. The current paper is an attempt in assessing the potential trade in the region with latest dataset  with Gravity model approach.

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