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36 QUANTIFICATION OF BENEFITS FROM ECONOMIC COOPERATION IN SOUTH ASIA 17.49 in 1991 to 96.3 in 2004) and between Bangladesh and Pakistan (from 62.5 in 1991 to 77.9 in 2004). In the manufactures sector, IIT between Bangladesh and Sri Lanka increased (from 31.1 in 1991 to 93.4 in 2004). IIT between them also increased in the textiles sector (from 14.3 in 1991 to 80.3 in 2004) and other manufacturing sectors (from 24.8 in 1991 to 86.7 in 2004). Potential thus exists for increased trade between Bangladesh and India and Bangladesh and Pakistan in the agricultural raw materials sector. It also exists between Bangladesh and Sri Lanka in manufactures, textiles and other manufactures sectors. Pakistan Pakistan maintained high IIT with Sri Lanka in the Agricultural Materials sector between 1991 and 2004 (97.6 in 1991 and 94.5 in 2004). However, its IIT with Sri Lanka in the agricultural raw materials sector fell sharply (from 94.2 in 1991 to 6.1 in 2004) while registering a marginal increase with Bangladesh (from 62.5 in 1991 to 77.9 in 2004). In the food sector, Pakistan’s IIT fell with respect to Bangladesh (from 95.9 in 1991 to 71.4 in 2004), India (from 96.88 in 1991 to 76.58 in 2004) and Sri Lanka (93.5 in 1991 to 68 in 2004). In the manufactures sector, Pakistan’s IIT with India declined drastically (from 90.77 in 1991 to 14.19 in 2004) while in the textiles sector it showed an appreciable rise (from 8.21 in 1991 to 89.69 in 2004). There is thus large potential in trade between Pakistan and Bangladesh in the agricultural materials sector and between Pakistan and India in the textiles sector. In short, the results show that intra-industry trade has increased in many sectors for the major trading partners of SAFTA region in the year 1991 as compared to 2004. Intra-industry trade between Sri Lanka and India has increased in almost all sectors, especially in chemicals, machinery and textiles. India and Bangladesh have increased intra-industry trade in chemicals, agricultural raw materials and textiles. Bangladesh and Sri Lanka have increased their intraindustry trade in chemicals and textiles. With respect to Pakistan, we find that intra-industry trade with most of the major trading partners of SAFTA region has declined in many sectors. Textile is the only sector where intra-industry trade of Pakistan has improved with respect to other major trading partners. This indicates that the region has the potential to integrate its production structures in many sectors and improve its global competitiveness. Intra-regional trade can lead to better allocation of resources in the region; allow economies of scale and improve efficiency in production. Intra-industry Trade in the Textile Sector We examine in greater detail the possibility of intraregional trade in a sector where the countries of the region are at different degrees of competitiveness and compete in the third market, i.e. the textiles sector. This detailed analysis is undertaken using UNIDO dataset. However, at the industry level the trade data is not bilateral therefore intra-industry trade with respect to the rest of the world was studied for India, Pakistan, Bangladesh and Sri Lanka in 1991 and 2004. Since these four countries are also major exporters in the world in textile sector some inferences are drawn on the basis of the analysis. The trends as observed are presented in Table 3.7. Spinning, Weaving and Finishing Textiles Sector: India’s IIT increased from 0.2 in 1991 to 0.4 in 2004. At the same time Pakistan and Sri Lanka’s IIT have remained low at 0.1 while Bangladesh’s IIT fell from 0.5 in 1991 to 0.3 in 2004. There is thus scope of trade between India and each of these countries. Manufacture of Made-Up Textile Goods Except Wearing Apparel: Intra-Industry Trade for all countries is very low for this sector. There is thus not enough potential for increasing trade between these countries in this sector. Knitting Mills: Sri Lanka shows high IIT in this sector with the other countries experiencing very low IIT with respect to the rest of the world. There is thus large potential for trade to expand between Sri Lanka and the other countries in the study. Manufacture of Carpets and Rugs: India and Pakistan show no IIT in this sector with Bangladesh’s IIT remaining low at 0.2 between 1991 and 2004. Sri Lanka’s IIT fell from 0.9 in 1991 to 0.5 in 2004 which highlights deterioration in IIT for Sri Lanka. There is thus an insufficient case for increasing trade between these countries in this sector. Cordage, Rope and Twine Industries: India, Pakistan and Sri Lanka exhibit high IIT in this sector. It is noteworthy however, that both India and Sri Lanka’s IIT fell from 0.9 in 1991 to 0.6 in 2004. With
Table 3.7 Intra-industry Trade in Textiles COMPETITIVENESS AND COMPLEMENTARITIES 37 Sector Countries IIT (1991) IIT (2004) Spinning, weaving and finishing textiles India 0.2 0.4 Pakistan 0 0.1 Sri Lanka 0.1 0.1 Bangladesh 0.5 0.3 Manufacture of made-up textile goods except wearing apparel India 0 Pakistan 0 Sri Lanka 0.1 Bangladesh 0.1 Knitting mills India 0 0.1 Pakistan 0 Sri Lanka 0.8 Bangladesh 0.3 Manufacture of carpets and rugs India 0 Pakistan 0 Sri Lanka 0.9 0.5 Bangladesh 0.2 0.2 Cordage, rope and twine industries India 0.9 0.6 Pakistan 0.8 Sri Lanka 0.9 0.6 Bangladesh 0 0.1 Manufacture of textiles not elsewhere classified India 0.9 0.7 Pakistan 0.3 0.6 Sri Lanka 0 0.1 Bangladesh 0.4 0.8 Bangladesh having low IIT at 0.1 in 2004, the other three countries have a large potential for trade with it. Manufacture of Textiles (not Elsewhere Classified): India’s IIT fell from 0.9 in 1991 to a reasonable 0.7 in 2004. Further, Pakistan showed an increase in IIT from 0.3 in 1991 to 0.6 in 2004 and Bangladesh showed an increase from 0.4 in 1991 to 0.8 in 2004. Sri Lanka’s IIT remained low from 1991 to 2004. There is thus large scope for India, Pakistan and Bangladesh to increase trade with Sri Lanka. On the whole, though it is difficult to draw conclusions for the textile sectors on the basis of the above arrived results, it can be inferred that in some of the sub-sectors of textiles, like spinning, weaving and finishing textiles and manufactures of textiles not elsewhere classified there has been a rise in intra-industry trade in the SAARC countries and this does indicate that there is a possibility, even within the sector where the countries compete, for countries to trade. CONCLUSION The analysis of competitiveness and complementarities in SAFTA region reveals that there has been a distinct change in the trade patterns of major trading partners in the region with respect to intra-regional trade. The revealed comparative advantage (RCAs) indices show that the competitive basket has changed overtime. Countries within the region have become competitive vis-à-vis other countries in the region in different products. The results of complementarity index show that as compared to an average of 1991–93 in 2004–06 period there has been a drastic increase in complementarity indices of all four major trading partners with SAFTA region. The export potential of countries matches more to the import profile of the region in 2004 period as compared to 1991 period. These increase the possibility of higher intra-regional trade. Intra-industry trade is also found to have increased drastically in sectors like agriculture raw materials, chemicals and textiles. Within textiles, we find that the intra-industry trade has increased overtime. This indicates that in many sectors including textiles, countries can specialise in products at different stages of production or in differentiated products. This strongly suggests that there exists potential for intraregional trade even in sectors where all the major trading countries are competitive.
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QUANTIFICATION OF BENEFITS FROM ECO
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QUANTIFICATION OF BENEFITS FROM ECO
Page 7: Preface Our consultations with seni
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Part II BENEFITS FROM DEEPENING INT
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11 Construction and Related Enginee
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15 Prospects for the Telecommunicat
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APPENDICES
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Appendix 8 Intra SAARC FDI Collabor
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Appendix 11 Table A11.1 On an Emplo
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Appendix 12 Original Commitments/In
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Appendix 14 Table A14.1 Telecommuni
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Appendix 15 REFERENCE PAPER Scope T
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Bibliography Abelson, P. (1996),
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BIBLIOGRAPHY 241 Cuba (2002), Negot
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BIBLIOGRAPHY 243 (2004), Impacts of
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BIBLIOGRAPHY 245 Silva, Patricia an
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BIBLIOGRAPHY 247 (1998), Tourism Se
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