Safta

The paper evaluates the South Asia Free Trade Agreement (SAFTA) within the global structure of overlapping regional trade agreements (RTAs) using a modified gravity equation. First, it examines the effects of the Trade Liberalization Program which started in 2006. SAFTA would have a minor effect on regional trade flows and the impact on custom duties would be a manageable fiscal shock for most members. Second, the paper ranks the trade effects of other potential RTAs for individual South Asian countries and SAFTA: RTAs with North American Free Trade Agreement (NAFTA) and the European Union (EU) dominate one with the Association of South East Asian Nations (ASEAN).Asia;Economic models;trade barriers, trade flows, trade agreements, trade liberalization, customs revenue, regional trade, trade facilitation, free trade, tariff reduction, average tariff, rules of origin, average tariffs, regional trade agreements, bilateral trade, preferential trade, trade agreement, trading arrangements, trade creation, trade facilitation measures, tariff reductions, trade effects, free trade agreement, economic integration, international trade, free trade agreements, trade diversion, preferential trade agreements, tariff liberalization, tariff barriers, elasticity of substitution, trade relations, member country, restrictive rules of origin, preferential trading, trade policies, free trade area, elimination of tariffs, tariff rates, trading partners, import transactions, tariff equivalent, tariff levels, world economy, trade preferences, trade area, facilitation measures, equilibrium model, trade volumes, multilateral trade, trading system, trade pattern, average tariff rate, trade volume, liberalization efforts, dispute settlement, fiscal shock, trade models, customs procedures, trading arrangement, preferential treatment, imperfect substitutability, multilateral trade liberalization, tariff rate, country of origin, preferential basis, partner country, international trade agreements, most-favored-nation, mfn tariffs, tariff changes, world trading system, nontariff barriers, multilateral efforts, trade data, preferential tariff, increasing trade, bilateral flows, trade imbalances, most-favored-nation tariffs, price of imports, trade arrangements, economic community, unilateral liberalization, high trade barriers, bilateral trade flows, increased trade, tariff change, external most-favored-nation tariffs, world markets, exchange rate risk, trade structure, preferential trade arrangements, trade patterns, trade integration, trade in services, technical changes, negotiation process, trade flow, liberal rules, preferential trade liberalization, terms of trade, reduction in tariffs, net trade creation, dispute settlement mechanism, regional integration, preferential tariffs