The bandwagon of preferential agreements: why should South Asia join them more aggressively?

Abstract

Preferential Trading Arrangements (PTAs) have become the order of the day. A significant portion of global cross-border trade is now being carried out on preferential terms. In a similar vein, seven of the eight member states of the South Asian Association for Regional Cooperation (SAARC) have recently concluded the South Asian Free Trade Agreement (SAFTA). Despite that, so far, the progress of subregional trade cooperation in South Asia appears to be rather bleak. The purpose of this paper is to explain why the subregional countries should join in this wave of PTAs more earnestly and strengthen the SAFTA.