Trade Liberalization & Consumer Welfare               in South Asia                Dr. Vaqar Ahmed     Sustainable Develop...
Outline•   Need for this study•   Trade liberalization – Gains for South Asia•   Trade liberalization – Gains for Pakistan...
Need for this Study• 1/5th of world poor living in South Asia• Intra-regional trade can enhance consumer  welfare• Trade a...
Need for this Study (Post SAARC Summit) • Consensus on reducing size of distortionary   lists • Even in case of Pakistan g...
Methodology• Quantitative (Partial Equilibrium) Approach  – Secondary trade statistics• Countries: Bangladesh, India, Nepa...
How much South Asian Consumers             Benefit?      Summary of Results on Aggregate Consumer Welfare GainsCountry    ...
How much Pakistani Consumers Benefit?                                   7
How much Pakistani Consumers Benefit?                                   8
In which Commodities Pakistani Consumers Benefit?             (Percentage Increase)               1.49       13.79        ...
Usefulness of these Estimates The estimation method helps to identify products with  maximum potential consumer welfare g...
Way Forward Opinion about SAFTA as an effective instrument for  enhancing regional trade is regardless of opinion on  the...
Thank You    vaqar@sdpi.orgwww.sdpi.org, www.sdpi.tv                            12
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Trade Liberalization & Consumer Welfare

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Trade Liberalization & Consumer Welfare in South Asia

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Trade Liberalization & Consumer Welfare

  1. 1. Trade Liberalization & Consumer Welfare in South Asia Dr. Vaqar Ahmed Sustainable Development Policy Center 1
  2. 2. Outline• Need for this study• Trade liberalization – Gains for South Asia• Trade liberalization – Gains for Pakistan• Which commodities gain in Pakistan?• Way forward 2
  3. 3. Need for this Study• 1/5th of world poor living in South Asia• Intra-regional trade can enhance consumer welfare• Trade agreements do not effectively highlight consumer gains• Need to highlight consumer view point in South Asia• Separating political issues from economic cooperation 3
  4. 4. Need for this Study (Post SAARC Summit) • Consensus on reducing size of distortionary lists • Even in case of Pakistan granting MFN to India  consensus on trade of intermediate goods 4
  5. 5. Methodology• Quantitative (Partial Equilibrium) Approach – Secondary trade statistics• Countries: Bangladesh, India, Nepal, Pakistan & Sri Lanka• Data from 12 cities of South Asia• Saperate questionnaires for documenting stakeholder views and perceptions in each city. 5
  6. 6. How much South Asian Consumers Benefit? Summary of Results on Aggregate Consumer Welfare GainsCountry Product Consumer Current Value Percentage of Lines in Welfare Gains Imports of Consumer Sensitive (in US $ million) Country from Welfare Gains Lists ROW in Imports (%) (in US $ million)Bangladesh 50 398.56 2781.33 14.33India 161 597.29 1095.45 54.52Nepal 73 457.50 1068.27 42.83Pakistan 44 206.18 349.24 59.04Sri Lanka 27 288.61 918.54 31.42Total 355 1948.15 6212.83 31.36 6
  7. 7. How much Pakistani Consumers Benefit? 7
  8. 8. How much Pakistani Consumers Benefit? 8
  9. 9. In which Commodities Pakistani Consumers Benefit? (Percentage Increase) 1.49 13.79 Pharmaceuticals Electronic Equipment Others 84.72 9
  10. 10. Usefulness of these Estimates The estimation method helps to identify products with maximum potential consumer welfare gains for each country and therefore, qualifies for removal from their respective sensitive list The estimates form the basis for more detailed studies on the effects of reduction in transportation costs and other trade facilitation measures on consumer welfare The estimates will facilitate comparison with other trade costs and relative merits of tariff liberalisation in each product category can be assessed 10
  11. 11. Way Forward Opinion about SAFTA as an effective instrument for enhancing regional trade is regardless of opinion on the importance of regional trade integration SAFTA’s future critically depends on the extent to which non-trade issues are disentangled from trade negotiations Make trade agreements pro-consumer as well Awareness generation on consumer welfare impacts of regional trade can increase regional trade discourse more participatory and balanced 11
  12. 12. Thank You vaqar@sdpi.orgwww.sdpi.org, www.sdpi.tv 12

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