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What Can <strong>India</strong> and <strong>Pakistan</strong> Do To Maximize the Benefits from <strong>Trade</strong>?<br />
figure 3: Welfare scenario of safTa (in Millions of dollars at<br />
2007 Prices)<br />
6000<br />
5000<br />
4000<br />
3000<br />
2000<br />
1000<br />
0<br />
1650.0<br />
1022.5<br />
<strong>India</strong><br />
<strong>Pakistan</strong><br />
Rest of South Asia<br />
1810.7<br />
Source: De, Raihan, and Ghani 2012.<br />
Note: STF = <strong>Trade</strong> facilitation among SAFTA member states.<br />
SAFTA-with-MFN scenario would lead to somewhat higher welfare<br />
gains for <strong>Pakistan</strong> and <strong>India</strong> than a scenario of SAFTA without MFN.<br />
And as in the previous simulation, when the bilateral trade facilitation<br />
scenario is added, the gains from trade are much higher.<br />
The results suggest that the SAFTA-with-MFN scenario would<br />
lead to higher welfare gains for <strong>Pakistan</strong> and <strong>India</strong> than a scenario of<br />
SAFTA-without-MFN. However, when a South Asian trade facilitation<br />
scenario is added, such gains become much larger. The SAFTA scenario<br />
(with or without MFN) would however lead to some welfare losses for<br />
Bangladesh, because of larger trade diversion effects than trade creation<br />
effects (Raihan 2012).<br />
| 107 |<br />
1121.7<br />
282.5 298.2<br />
5452.0<br />
2618.4<br />
1265.0<br />
SAFTA without MFN SAFTA with MFN SAFTA+MFN+STF
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