IMPACT OF REGIONAL TRADE AGREEMENT (SAFTA) ON PAKISTAN ECONOMY

Abstract

Regional Integration has become an economic imperative for developing countries in view of the emerging trend of trade blocs capturing substantial intra regional trade. It is also a fact that even after two decades of its signing; SAARC could not achieve its purpose. Rather its performance so far has been dismal in comparison with other regional blocs. Though earlier efforts to transform the region into a free trade area could not be materialized but this time efforts seemed to be fruitful with the finalization of Draft Treaty Framework during January 2004. There is a vast scope for trade expansion and cooperation among SAARC countries. Pakistan would have definite impacts on her economy with the implementation of SAFTA. In the short run, there would be serious challenges to our economy from intra-SAARC imports. Hence, we need to concentrate on developing policies to diversify and upgrade our export base and create a favourable climate for private investment. Trade liberalization with SAARC countries will encourage our policy makers to increase efforts for international competitiveness. The studies reviewed in the thesis argue that regional trade liberalization will lead to a restructuring of Pakistan's economy from less to more competitive sectors. I have firm belief that regional economic integration will allow Pakistan to deal more effectively with the challenges of globalization and improve its position in regional and international trade.