Selim Raihan (1)

8/20/2019 Selim Raihan (1)

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Bi-lateral FTAs, RTAs and

Unilateral Liberalization:

The South Asian Trade Highways


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The Eerging Trade !ssues in South Asia

Regional

Bilateral

Domestic

Multilateral

2


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"ains #ro RTA$Bilateral FTA

Static vs. Dynamic gains

When initial trade is very small or insignificant

then the predictions about gains become

problematic

Trade diversion and trade creation

Informal sector !hich are not properly ta"en

into account because of lac" of information

#


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South Asian Free Trade Area %SAFTA&

In early 2$$%& the South 'sia (ree Trade

'greement )S'(T'* !as signed.

S'(T' has come into force from + ,uly 2$$-&

!ith the aim of reducing tariffs for intraregional

trade among the S''R/ members.

%


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'robles in SAFTA

Ineffective and slo! tariff reduction..

0ong negative lists..

1hasing out of the negative list or eliminatingnontariff barriers )3TBs*..

Rules of origin...

Investment and Services..

Regional politics..

4


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(ountry-wise Share %)& in

!ntra-SAAR( E*+orts and !+orts in .

!ndia a//ounts #or three-#ourth o#

regional e*+orts0 Bangladesh

a//ounts #or less than 1 +er/ent

Bangladesh is the single largest

i+orter in South Asia

-

Exports Imports


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Raihan %2&: Trade (reation and Trade 3i4ersion E##e/ts

o# SAFTA S/enario: Siulation Using the "TA' 5odel


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The relatively high levels

of protection among the

S''R/ economies

increase the probability

of Trade Diversion. If thecountry participating in a

regional arrangement

!ere itself open& it !ould

not suffer from tradediversion even if it !ere

tiny.

A4erage 5F6Tari## Rate Ran7

Bangladesh .80 2

Bhutan 0. 9

!ndia .0 .

5aldi4es 0 2

6e+al .10 1

'a7istan .;01 1

Sri Lan7a ..0 9

Sour/e: .;2

Le4el o# 'rote/tion in South Asia

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Bilateral FTAs in South Asia

India 6 Sri 0an"a B(T'

Sri 0an"a 6 1a"istan B(T'

India 6 3epal trade treaty

Bangladesh 6 India B(T' )under negotiation*

Bangladesh 6 1a"istan B(T' )under negotiation*

Bangladesh 6 Sri 0an"a B(T' )under negotiation*

!n South Asia, the a//ess to !ndian ar7et is

ost i+ortant

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(on/erns in BFTAs

The issue of trade diversion still remains

:o!ever& dynamic gains can be significant

It is important to have Timely negotiation

Setting the terms of negotiation

;nsuring country9s interest 1roactive role vs. passive role

The capacity of trade ministry is also important

++


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Trade liberaliues

Raihan )2$$*& Raui and ?emal )2$$-*

Raihan and Ra


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Raihan and Razza@ue %& and

Razza@ue and Raihan %&

ATrade Development 1overty 0in"ages Colume I

and Colume II

.1 (ountry Studies: from 'sia )Bangladesh&/ambodia& /hina& India& 3epal& 1a"istan& Sri 0an"a and

Cietnam* and 8 from subSaharan 'frica )?enya&South 'frica& Tan


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Tari##s and "rowth: T3' and 3e4elo+ing (ountries

+%


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Growth and Poverty in TDP Countries

+4


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For a nuber o# .18 /ountries, only 8 /ountries ha4e

lower tari##s but higher "3' growth than Bangladesh0

+-


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(o/7burn, 3e/aluwe and Robi/haud %9&

SiF /ountry Studies Bangladesh& India& 3epal& 1a"istan&Benin and Senegal

Ma@or 0essons 0earnt

Trade liberali


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(on/erns in Further Trade Liberalisation in

South Asia

Trade liberalisation and antieFport bias

1otential gro!th dividend arising from further tariff cuts

Gver!helming attention has been given to trade relatedinstruments only

Reforms of the institutions as the "ey to the country9s

gro!thsupporting strategy

Difference bet!een trade policy and policy of trade

liberalisation for protecting some policy

+5


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!ssues at the 5ultilateral Le4el

'griculture 3et ;Fporting and net importing countries.

3'M'

/oncern for domestic manufacturing industries in theD/s in South 'sia

1reference erosion for 0D/s

D(H( for 0D/s

Services Mode %

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Than" you

2$

Selim Raihan (1)

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