Regional Integration in South Asia : What Role for Trade Facilitation?

The trade performance of countries in
South Asia over the past two decades has been poor relative
to other regions. Exports from South Asia have doubled over
the past 20 years to approximately USD 100 billion. In
contrast, East Asia's exports grew ten times over the
same period. The low level of intraregional trade has
contributed to weak export performance in South Asia. The
empirical analysis in this paper demonstrates gains to trade
in the region from reform and capacity building in trade
facilitation at the regional level. When considering
intraregional trade, if countries in South Asia raise
capacity halfway to East Asia's average, trade is
estimated to rise by USD 2.6 billion. This is approximately
60 percent of the total intraregional trade in South Asia.
Countries in the region also have a stake in the success of
efforts to promote capacity building outside its borders.
If South Asia and the rest of the world were to raise their
levels of trade facilitation halfway to the East Asian
average, the gains to the region would be estimated at USD
36 billion. Out of those gains, about 87 percent of the
total would be generated from South Asia's own efforts
(leaving the rest of the world unchanged). In summary, we
find that the South Asian region's expansion of trade
can be substantially advanced with programs of concrete
action to address barriers to trade facilitation to advance
regional goals.