An analysis of intra-SAARC trade relations

Nikhat Khalid

International Journal of Economics and Business Research, 2023, vol. 25, issue 4, 489-505

Abstract: The world is composed of geographical regions comprising clusters of countries having physical contiguity. This premise motivated South Asian countries to form SAARC in 1985. SAARC envisioned enhancing trade and commerce among the member states. In 1993, they initiated SAPTA to liberalise tariff barriers and created SAFTA in 2004 to make South Asia a trading zone. Despite these initiatives, many pitfalls and hiccups did not allow SAPTA and SAFTA to bloom. This paper attempts to empirically examine intra-regional trade among SAARC countries through their bilateral trade intensity index, intra-regional trade intensity index and intra-regional trade share. The study found that most SAARC countries have their trade priorities outside the region. Their intra-regional trade stands at just 5.8%. To reduce this economic disconnect, SAARC countries need to come forward to enhance cross border trade, for which an open and more inclusive trading system and political will is required.

Keywords: South Asian Association of Regional Cooperation; SAARC; intra-regional trade; regional integration; trade responsibility; welfare state; geographical contiguity; economic cooperation. (search for similar items in EconPapers)
Date: 2023
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