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– The purpose of this paper is to investigate the potential economic effects of the proposed Bangladesh-India free trade agreement (FTA).
The purpose of this paper is to investigate the potential economic effects of the proposed Bangladesh-India free trade agreement (FTA).
The authors have used the computable general equilibrium (CGE) analysis of Global Trade Analysis Project (GTAP) database. The analysis highlights the possible costs and benefits of the two nations within three different scenarios. Under Scenario I all bilateral import tariffs between Bangladesh and India are removed; Scenario II represents the setting where Bangladesh cuts its all tariffs by 75 and in Scenario III Bangladesh cuts tariffs by 50 percent. India cuts all their tariffs by 100 percent in all three scenarios.
The findings indicate that India may gain more in terms of welfare and real GDP via the improved terms of trade while Bangladesh is going to have welfare loss, but if Bangladesh is able to make a preferential FTA like Scenario III with India its welfare, real GDP and exports will be increased substantially.
This paper is the first-ever attempt to estimate the effect of the proposed Bangladesh-India FTA using CGE analysis of GTAP database version 7.
The purpose of this paper is to explore the trade and investment potential under the ambit of sub‐regional cooperation comprising the four contiguous countries of…
The purpose of this paper is to explore the trade and investment potential under the ambit of sub‐regional cooperation comprising the four contiguous countries of Bangladesh, China, India and Myanmar (BCIM).
The study addressed both intra‐regional and intra‐industrial trade, applying a dynamic gravity model of bilateral trade flows by product group of BEC's 1‐digit product classification, to set a panel data for the period of 1992‐2009.
The analysis reveals that higher trade transaction costs and tariff between each pair of countries reduce the trade flow. One of the major findings of the paper is that a large part of BCIM's trade has remained unrealized and the trade transaction cost is one of the major trading barriers prohibiting the growth of BCIM intra‐regional trade. The paper concludes that liberalization of non‐policy barriers will spur BCIM's trade, particularly in a time of ongoing global economic and financial crisis.
The study reinforces that improvement in infrastructure that leads to less trade transportation costs should be a necessary step in order to realize BCIM's trade potential. The paper concludes that liberalization of non‐policy barriers will spur BCIM's trade and economic cooperation, particularly in time of ongoing global economic and financial crisis.
This paper is the first‐ever attempt to estimate the trade potential of BCIM countries using dynamic gravity model.