Abstract
Foreign trade plays an important role in the economic development and growth of a country. The SAARC region is not exception to the rule. There are reasons for limited market in future for the SAA RC countries. They must find new markets for their exports. ASEAN region belongs to one of such potential export markets. Keeping with the view of future importance, we have constructed a trade linkage model for SAARC countries with ASEAN region within an econometric framework. The estimated results show the impact of the ASEAN import on the exports of the SAA RC countries is positive in most cases. Using the model, we have also examined the impact of ASEAN financial crisis on SAARC economies. The results of this simulation exercise show that the ASEAN crisis left its negative impact on exports of the SAARC regiion.
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