Is Bangladesh A Beneficiary of South Asian Free Trade Area (SAFTA)?

Abstract

South Asian Association of Regional Cooperation (SAARC) was primarily concerned with peace thus success in enhancing intraregional trade was minimally displayed. Therefore formation of a South Asian Free Trade Area (SAFTA) was proposed with an aim of extending intraregional trade that came into force in 2006. SAFTA in terms of population is the largest of any economic bloc but has appeared as a least integrated bloc while taking trade among members into account, which is only 6.2% of total trade. To increase trade the list of commodities under sensitive categories has been revised in 2012. Taking an interpretivist approach this study reports that Bangladesh will be one of the significant beneficiaries of SAFTA as it will help reduce the longstanding trade deficit with India, create a large regional market and support its key industries such as; Readymade Garments (RMG) and pharmaceuticals to enhance competitiveness. Optimizing the benefits, however, may not be accomplished if nontariff barriers such as; mind-set, political tensions and bilateral conflicting issues are not dealt with extreme care beside tariff barriers.