Multidimensional Trade Facilitation in South Asia: Dynamics of Regional Integration

Abstract

This study examined the impact of trade facilitation on intraregional trade in South Asia. By constructing five trade facilitation indicators and incorporating them in an ugmented anel ravity odel, the study estimated the impact of A P G M each of the five dimensions of trade facilitation in South Asia. The results indicated that the most significant gains in the region could be achieved by trade facilitation in the customs and regulatory environments, respectively. It also estimated the trade potential of the countries in the region for each other, and India and Bangladesh depicted the highest potential. The potential gains in intra-regional trade in South Asia resulting from trade facilitation were also quantified using the simulations technique and concluded that intra-regional trade could be increased tremendously through trade facilitation in the region in the five specific dimensions. The study suggested that policymakers in India, Pakistan and Bangladesh should take robust initiatives in trade facilitation.