SAFTA to have positive impact for S Asia: ADB-UNCTAD

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New Delhi, March 28: its global imports would increase by 0.19%. By 2016, Pakistan's total output would increase by 0.02%, its exports to South Asia would increase by 102.41%, its exports to other countries would increase by 0.77% and its global imports would increase by 1.54%.

According to the ADB-UNCTAD study more than 60% of the increase in exports to the region by India and Pakistan would be directed to Bangladesh. More than 50% of Pakistan's gains from SAFTA would be from increased exports to Bangladesh in textiles alone.

Sri Lanka would not gain much in the first phase of SAFTA implementation as it already has close to free access to the Indian market and other countries in the region have not committed substantial liberalization vis-à-vis Sri Lanka in the first phase.

"Sri Lanka's gains are more improved in the second phase, when all countries participate fully and remove their negative lists. The increase in output in vegetable oils corroborates empirical evidence of duty structures that favour manufacture of edible oils. The textiles sector which contributes to about 5% of the total output in Sri Lanka sees a growth of about 4%. While relative changes in some of the products are quite high, their absolute outputs are quite low compared to the total output of the Sri Lankan economy. Negative employment and output effects are seen for wearing apparel and some agricultural products," the study said.

In 2008-09, Sri Lanka's total output would increase by 0.1%, its exports to South Asia would increase by 2.52%, its exports to other countries would increase by 0.05% and its global imports would increase by 0.14%. In 2006, Sri Lanka's total output would increase by 0.55%, its exports to South Asia would increase by 58.78%, its exports to other countries would increase by 0.72% and its global imports would increase by 1.98%.

The ADB-UNCTAD study has grouped Afghanistan, Bhutan, Maldives and Nepal together as ABMN countries and said that though these countries get zero duty access to the developing countries in the region by 2009, its gains were limited on account of its inability to access agricultural products markets, blocked by sensitive lists of developing countries. However with completed liberalization in 2016, there would be gains for the ABMN group in agriculture and primary commodities