scholarly journals Should Pakistan Liberalize Trade With India Against the Backdrop of the FTA with China? A Comparative Advantage Analysis for the Manufacturing Sector

2014 ◽  
Vol 19 (Special Edition) ◽  
pp. 327-348 ◽  
Author(s):  
Naheed Memon ◽  
Faiza Rehman ◽  
Fazal Rabbi
Keyword(s):  
Free Trade ◽  
Comparative Advantage ◽  
Bilateral Trade ◽  
Manufacturing Sector ◽  
Trade Agreement ◽  
Industrial Sector ◽  
Most Favored Nation ◽  
Global Competitiveness ◽  
Trade Relations ◽  
The Impact

Pakistan and India have not yet normalized trade relations and gained the full benefits of bilateral trade despite significant developments to this end since 2011. Pakistan has yet to reciprocate the most-favored-nation status granted by India. This study investigates the benefits of trade liberalization between the two countries by studying the global competitiveness of Pakistan’s industrial sector from a policy perspective. We construct a revealed comparative advantage index for manufacturing products (HS 2-digit level) for Pakistan, India, and China for the period 2003–12, and then identify the changing patterns of comparative advantage for Pakistan. We find that 18 industries should be protected upon liberalizing trade with India. These industries are termed ‘vulnerable’ as they have moved from either borderline competitiveness to becoming uncompetitive or vice versa. Additionally, the excessive concessions granted to China in its free trade agreement with Pakistan and the resistance to opening up trade with India may have resulted in inefficient trade, i.e., imports from a less competitive partner and exports to a less lucrative market. We aim to establish a direction for further research to determine the ex ante impact of trade with India on the economy via a change in the production levels of these vulnerable industries, given the impact of free trade with China and the availability of Chinese substitutes.

The China Factor Blunts the Cutting-Edge of the Japan-Malaysia Free Trade Agreement

2008 ◽  
Vol 8 (4) ◽  
pp. 1850152 ◽  
Author(s):  
Khondaker Mizanur Rahman ◽  
Rafiqul Islam Molla ◽  
Md. W. Murad
Keyword(s):  
Free Trade ◽  
Free Trade Agreement ◽  
Bilateral Trade ◽  
Time Series Data ◽  
Trade Agreement ◽  
Early Years ◽  
Sharp Edge ◽  
Series Data ◽  
Trade Growth ◽  
The Impact

Most industrialized and industrializing countries of the world were highly nervous about the spread effect of the surge of investment, industrialization and economic growth in China during early years of the 2000s. They were anxiously searching for ways and means to protect their economic interests from this effect. To describe this phenomenon eloquently the mass media used the term `China factor in world trade.' Against this backdrop the Japan-Malaysia free trade agreement (FTA) under an economic partnership agreement was signed in 2005 and implemented from 2006 with the expectation that it would be able to protect their bilateral trade from the sharp edge of the China factor and further enhance trade and investment relationships between the two countries. This study examines its effectiveness in influencing their bilateral trade growth in the face of this so called China factor. From analyses of the time series data on Malaysia's trade during 1986-2007 it is observed that the bilateral trade between Malaysia and Japan became stagnant during 2001-2005 with an average annual value of US$25.35 billion as a result of the impact of the China factor. However, during 2006-2007, the initial two years of its operation, the FTA was able to minimize the impacts of the China factor and revamp the growth of the bilateral trade at a modest rate. It is projected that their bilateral trade will grow marginally and reach to US$50.34 billion in 2010; but the growth rate will start declining from that year. This, in effect, indicates that the China factor's massive impact has blunted the sharp-edge of the Japan-Malaysia FTA's `tactical merit' for promoting bilateral trade growth. As a result, it is found to have only a modest and short lived influence on bilateral trade growth in the presence of China's increasing involvement in Malaysia's industrial growth. However, for a more reliable assessment a longer experience of FTA will be required.

scholarly journals Regional Integration and Trade in Agrifood Products: Evidence from the East African Community

2015 ◽  
Vol 11 (3) ◽  
pp. 212-246
Author(s):  
Francis Ejones
Keyword(s):  
Regional Integration ◽  
Bilateral Trade ◽  
Estimation Method ◽  
Trade Agreement ◽  
Trade Integration ◽  
East African ◽  
East African Community ◽  
Trade Relations ◽  
Extended Gravity ◽  
The Impact

This study examines the postulation that trade liberalization (regional integration) policies of LDCs normally undermine their presumed impact. The study is based on the experience of EAC trade agreement. It adopts the extended gravity model, to analyze the impact of this regional integration on food item. The model includes 168 countries and is estimated with panel data over the period 1988 – 2009. The Poisson estimation method took into account unobserved trade data characteristics of the bilateral trade relations. The results show that regional trade integration increased exports, normally at the expense of exports and welfare of non-members, and these exports were more reflective of food exports growth. The same has not been true for intra-bloc exports of food although the sector experienced an increase in exports resulting from the implementation of a trade agreement. The intra-bloc results are consistent with the structural rigidities of the exporting EAC Countries.    

Exploiting the Trade Potential from Integration: Analysing the Impact of Free Trade Agreements between ASEAN and India and China

China Report ◽  
2018 ◽  
Vol 54 (4) ◽  
pp. 442-466 ◽  
Author(s):  
Nguyen Xuan Trung ◽  
Nguyen Duc Hung ◽  
Nguyen Thi Hien
Keyword(s):  
Free Trade ◽  
Free Trade Agreement ◽  
Bilateral Trade ◽  
Positive Impact ◽  
Stochastic Frontier ◽  
Free Trade Agreements ◽  
Trade Agreement ◽  
Trade Agreements ◽  
The Impact ◽  
Stochastic Frontier Estimation

In this article, we use the technique of stochastic frontier estimation for the structural gravity model to analyse Vietnam’s bilateral trade and evaluate its exploitation of trade efficiency before and after its free trade agreements (FTAs) with China and India entered into force. The results from Vietnam’s bilateral trade data between 2000 and 2015 show that the ASEAN–India Free Trade Agreement (AIFTA) has had a positive impact on Vietnam’s bilateral trade flows while we found a remarkably negative effect on Vietnam’s exports but not imports after the entry into force of the ASEAN-China Free Trade Agreement (ACFTA). In addition, Vietnam’s participation in the regional trade agreements (RTAs) and FTAs has significantly reduced the costs of trade over time, and these impacts on Vietnam’s imports are much higher than those on Vietnam's exports.

Trends and Patterns of India’s Trade with Six EU Countries

2015 ◽  
Vol 11 (1) ◽  
pp. 39-60
Author(s):  
SANDEEP KAUR BHATIA ◽  
Amandeep Kaur
Keyword(s):  
Comparative Advantage ◽  
Bilateral Trade ◽  
Debt Crisis ◽  
Trade Agreement ◽  
Total Trade ◽  
Eu Countries ◽  
Trade Relations ◽  
Six Nations ◽  
Average Share ◽  
Trade Competitiveness

India and European Union trade relations go back to 1960s. Both sides started their bilateral trade relations after their first summit which, was held in 2000 and after that India-EU has gone through various rounds of summits and negotiations for improving the bilateral trade ties. As a result, Free Trade Agreement was agreed upon between them in 2007 but it is still not fully implemented. EU is India’s largest trading partner which has accounted 14.8 percent in its total trade in 2011. The study has taken up six nations of EU namely Belgium, France, Germany, Italy, Netherlands and UK as   India has a large average share of trade with these countries during 1996-2011. The study strives to find out the trade trends of India with these six EU countries namely Belgium, France, Germany, Italy, Netherlands and UK. The study  is an attempt to find out the trade competitiveness and patterns of India with these countries by using various indices like Revealed Comparative Advantage Index (RCA), Revealed Symmetric Comparative Advantage Index (RSCA) and Intra Industry Trade Index (IIT).  The study finds out that  European debt crisis have vigorously affected Indian pattern of trade with these six countries.   

scholarly journals Impact of Free Trade Agreement Use on Import Prices

2018 ◽  
Vol 33 (3) ◽  
pp. 643-660
Author(s):  
Kazunobu Hayakawa ◽  
Nuttawut Laksanapanyakul ◽  
Hiroshi Mukunoki ◽  
Shujiro Urata
Keyword(s):  
Free Trade ◽  
Fixed Effects ◽  
Free Trade Agreement ◽  
Trade Agreement ◽  
Firm Characteristics ◽  
Most Favored Nation ◽  
Rules Of Origin ◽  
Import Prices ◽  
Percentage Points ◽  
The Impact

Abstract We examine the impact of free trade agreement (FTA) use on import prices. For this analysis, we employ establishment-level import data with information on tariff schemes, that is, the FTA and most-favored-nation schemes used for importing. Unlike previous studies, we estimate the effects of FTA use on prices by controlling for differences in importing-firm characteristics. There are three main findings. First, the effect of FTA use is overestimated when not controlling for importing firm-related fixed effects. Second, on average, firms’ FTA use reduces tariffs by 12 percentage points and raises import prices by 3.6–6.7 percent. Third, in general, we do not find a price rise resulting from the costs of complying with rules of origin.

scholarly journals Essays on the interaction between multilateral tariff bindings and the formation of preferential trade agreements

2021 ◽  
Author(s):  
Nken Moise
Keyword(s):  
Free Trade ◽  
Comparative Advantage ◽  
Trade Agreement ◽  
Trade Agreements ◽  
Free Riding ◽  
Preferential Trade Agreements ◽  
Customs Union ◽  
Preferential Trade ◽  
High Tariff ◽  
The Impact

This dissertation studies the effect of continual reduction in the tariff bindings and its implications on the static and dynamic formation of preferential trade agreements (PTAs). Underlying trade model is a three country \competing exporters" model. First, utilizing a static game of endogenous trade agreement formation between three countries, we examine the effects of continual reduction in tariff bindings on the role of PTA formation in attaining global free trade. We show that, in the free trade agreement (FTA) formation game, when countries are completely symmetric, free trade always obtains as the coalition-proof Nash equilibrium (CPNE) of the FTA game. Under the customs union (CU) game, CU members exercise an exclusion incentive and free trade fails to be a CPNE. When countries are asymmetric with respect to their comparative advantage, the country with a weaker comparative advantage has an incentive to free ride on trade liberalization of the two others and continual reduction in tariff bindings facilitates FTA formation in attaining global free trade. Next, we employ a three country dynamic model of PTA formation where countries form PTAs over time and investigate the impact of multilateral tariff binding liberalization on the equilibrium extent of FTA and CU formation in isolation. When forming FTAs under relatively high tariff bindings, a myopic free riding incentive of FTA non-members constrains FTA formation. Thus, tariff binding liberalization can facilitate FTA expansion to global free trade. However, when forward looking countries do not value this myopic free riding incentive, tariff binding liberalization can impede FTA expansion to global free trade. In our CU game, CU formation proceeds to global free trade only for relatively high tariff bindings. Finally, we examine the PTA game where countries endogenously choose between CU and FTA formation. Under such a game, we show that the equilibrium emergence of CUs can prevent global free trade that would otherwise occur through FTAs. In contrast, the equilibrium emergence of FTAs can facilitate global free trade that would otherwise not occur through CUs.

scholarly journals The Prospects for Indo-Pakistan Trade

2012 ◽  
Vol 17 (Special Edition) ◽  
pp. 293-313 ◽  
Author(s):  
Hafiz A. Pasha ◽  
Muhammad Imran
Keyword(s):  
South Asian ◽  
Free Trade Agreement ◽  
Bilateral Trade ◽  
Trade Agreement ◽  
Tariff Reduction ◽  
Final Phase ◽  
Most Favored Nation ◽  
Nontariff Barriers ◽  
Positive List ◽  
The Impact

This article analyzes the volume and pattern of India–Pakistan trade given the extent of trade complementarity between the two countries and, in the presence of a restricted positive list of imports from India, the tariff regime and nontariff barriers in the two countries. The study also assesses the impact on bilateral trade of granting most-favored nation status to India, the removal of some of the impediments to trade, and the implementation of the final phase of import tariff reduction under the South Asian Free Trade Agreement. Finally, the article highlights emerging opportunities and possible threats to the process of trade normalization between the two countries.

scholarly journals The Impact of Trade Agreement on Agricultural Trade Flow in West Africa

2020 ◽  
Vol 13 (1) ◽  
pp. 89
Author(s):  
Christiana Manu
Keyword(s):  
West Africa ◽  
Free Trade ◽  
Bilateral Trade ◽  
Trade Flow ◽  
Trade Agreement ◽  
Trade Agreements ◽  
Agricultural Trade ◽  
Trading Partners ◽  
Short Run ◽  
The Impact

This paper analysed the impact of trade agreements on agricultural trade flow in West Africa. The study used 25 major trading partners of Ghana for 25 years between 1995 and 2019. Using the Gravity econometric model, this study finds that being a member of the trade agreement (FTA) is positively related to the aggregate flow of trade in agriculture. Trade agreements are found to increase trade flow with trading in agricultural products; especially trading partners in ECOWAS, if members agree on free trade in such products. The result shows that Ghana’s bilateral exports significantly increase with an increase in domestic and partner wages, and with distance, they decrease significantly. FTA was found to be a positive and significant determinant of Ghana’s bilateral trade in the long and the short run as well. Therefore, when there is a free trade agreement between countries, they tend to trade more among themselves than countries without the trade agreement.

Developments in India’s Bilateral Trade with ASEAN: A Study in Manufactured Sectors

2014 ◽  
Vol 1 (1) ◽  
Author(s):  
Mayengbam Lalit Singh
Keyword(s):  
Free Trade ◽  
Equilibrium Model ◽  
Free Trade Agreement ◽  
Bilateral Trade ◽  
Trade Agreement ◽  
Partial Equilibrium ◽  
Trade Creation ◽  
Partial Equilibrium Model ◽  
The Impact ◽  
Model Approach

The present paper deals with the impact of the recently signed ASEAN-India Free Trade Agreement (FTA) on manufactured goods. Partial equilibrium model approach (SMART model) has been employed to find out trade creation and diversion values of those goods in respective markets (India as well as ASEAN). In this paper, a new index has been constructed to embody score of India and two ASEAN groups using values of trade creation and diversion.

scholarly journals Pakistan-India Trade Potential and Issues

2009 ◽  
Vol 14 (Special Edition) ◽  
pp. 171-201 ◽  
Author(s):  
Zareen F. Naqvi
Keyword(s):  
Bilateral Trade ◽  
Import Substitution ◽  
Trade Agreement ◽  
Growth Strategies ◽  
Most Favored Nation ◽  
Trade Relations ◽  
Political Relations ◽  
Dialogue Process ◽  
Trade Potential ◽  
Low Levels

Pakistan and India are the two largest economies in South Asia with very low levels of bilateral trade. This has been the result of border disputes and political tensions, but also of inward-looking import-substitution growth strategies. Trade (including official and unofficial) between the two countries stood at around US$ 2.5-2.6 billion in 2007/08 but it could potentially be as much as US$ 5-10 billion or two to four times its current levels. The Composite Dialogue Process (CDP) has led to substantial improvements in political relations over the last 5 years and trade relations have shown positive outcomes as well. This paper recommends that the process be strengthened further by restarting the stalled CDP, Pakistan granting most favored nation (MFN) status to India, continuing to reduce impediments to trade and trade logistics, and perhaps even considering the possibility of a free trade agreement (FTA) with India.

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