BANGLADESH INSTITUTE OF INTERNATIONAL AND STRATEGIC STUDIES

REGIONAL COOPERATION IN SOUTH ASIA: FUTURE OF SAFTA

Author: Sharif M. Hossain, Ishtiaque Selim

DOI Link: https:/www.doi.org/10.56888/BIISSj2007v28n2a4

ABSTRACT

The creation of South Asian Free Trade Area (SAFTA) is a widely discussed policy issue in this region. Recently,there has been an increased interest in regional economic integration in the South Asia region. The SAFTA is a parallel initiative to the multilateral trade liberalisation commitments of SAARC member countries. There have been some strong arguments for regional economic integration in South Asia, as this integration is thought to generate significant intra-regional trade and welfare gains for the South Asian countries. However, critics have pointed out that the potential benefits from the SAFTA and other regional trading arrangements in South Asia are modest because of limited complementarities in the region and location of major trading partners of the individual South Asian countries outside the region. Mindless politics over people’s concerns, mistrust and hegemonic attitude of the bigger towards the smaller countries would also prohibit deriving full benefits out of an excellent free trade agreement. Given this backdrop, the paper is intended to examine mainly the features, prospects and challenges of SAFTA.