http://video.google.com/videoplay?docid=5785830866015923087#
This is the era of Free and Liberal foreign Trade under
the trend of Liberalisation and Globalisation. The WTO is endeavouring to
promote free trade across the geographical boundaries of multiple countries.
The protectionist policies of the National governments of the developing
countries are gradually replaced by the free-trade policies. It is universally
accepted by the Global Population that Free Trade is the engine of economic
growth. The Ricardian Principle of comparative cost advantage is showing its validity
in promoting International Co-operation among the trading countries for
exchanging cost advantages while trading the goods and services. World Income
is enhancing and pulling up the National Income of the trading countries as a
consequence of free trade policies. South Asian countries who have promoted the
co-operation among themselves under SAARC since 1985 have to derive the lesson
of Freedom for Regional Trade to bring about collective economic growth of
these South Asian Countries. There may be co-operation among the member
countries of SAARC, but yet these countries have not comprehended the
importance of Freedom for Regional Trade. In fact, SAFTA (South Asian Freedom
for Trade Agreement) is the idea thrown open for acceptance among the member countries,
but there is opposition to this idea by some of the member countries. This
Paper is an attempt to analyse the impact and the importance of Freedom for
Regional Trade in the SAARC countries. Each member country has the comparative
cost advantage in producing specific types of goods and services. Sri Lanka and
India have the advantage in producing Tea in bulk quantity at relatively lower
cost due to natural endowment of climatic conditions and human resources.
Pakistan and Bangladesh have comparative advantage in producing Jute at
relatively lower cost. India and Pakistan together produce the best quality of
Wheat and Basmati Rice in the world economy. These are the areas of Intrinsic
Economic power of South Asian Countries. If the full trade policies are
promoted by all the member countries of SAARC, the common market for these
Agricultural commodities can be developed in the South Asian region. Not only
the population of these South Asian countries will derive the benefit of low
cost of these essential commodities within the common market but also the
export potentials of South Asian countries will enhance to the maximum level.
These countries can increase the collective bargaining power in the
International market by commanding the collective monopoly of exporting these
specific Agricultural commodities to the rest of the world. It will be an
impetus to the Balance of Trade positions and the Foreign Exchange earnings of
these countries. In the present trend of Globalisation, the same countries depend
upon inflow of foreign capital in the form of FDI and FII to create foreign
exchange reserves for themselves. The growth of Free Trade policies among the
SAARC countries will make the economies of these countries fundamentally strong
with the power of collective bargaining in the International market rather than
depending on temporary and fluctuating inflow of foreign capital. This Paper
even envisages the possibility of the development of common South Asian
monetary system with Rupee as the common currency for all the member countries.
This common monetary system will promote the International Economic Integration
among South Asian countries and this Integration will be the base of permanent
peace in the South Asian region. The budgetary expenditure on defence services
will be reduced to the minimum level in every member country and the budgetary
funds will be utilised for promoting best of Socio-economic Infrastructure in
the South Asian region. There will be the Power Shift from the European Union
to SAARC if this dream is realised.
the trend of Liberalisation and Globalisation. The WTO is endeavouring to
promote free trade across the geographical boundaries of multiple countries.
The protectionist policies of the National governments of the developing
countries are gradually replaced by the free-trade policies. It is universally
accepted by the Global Population that Free Trade is the engine of economic
growth. The Ricardian Principle of comparative cost advantage is showing its validity
in promoting International Co-operation among the trading countries for
exchanging cost advantages while trading the goods and services. World Income
is enhancing and pulling up the National Income of the trading countries as a
consequence of free trade policies. South Asian countries who have promoted the
co-operation among themselves under SAARC since 1985 have to derive the lesson
of Freedom for Regional Trade to bring about collective economic growth of
these South Asian Countries. There may be co-operation among the member
countries of SAARC, but yet these countries have not comprehended the
importance of Freedom for Regional Trade. In fact, SAFTA (South Asian Freedom
for Trade Agreement) is the idea thrown open for acceptance among the member countries,
but there is opposition to this idea by some of the member countries. This
Paper is an attempt to analyse the impact and the importance of Freedom for
Regional Trade in the SAARC countries. Each member country has the comparative
cost advantage in producing specific types of goods and services. Sri Lanka and
India have the advantage in producing Tea in bulk quantity at relatively lower
cost due to natural endowment of climatic conditions and human resources.
Pakistan and Bangladesh have comparative advantage in producing Jute at
relatively lower cost. India and Pakistan together produce the best quality of
Wheat and Basmati Rice in the world economy. These are the areas of Intrinsic
Economic power of South Asian Countries. If the full trade policies are
promoted by all the member countries of SAARC, the common market for these
Agricultural commodities can be developed in the South Asian region. Not only
the population of these South Asian countries will derive the benefit of low
cost of these essential commodities within the common market but also the
export potentials of South Asian countries will enhance to the maximum level.
These countries can increase the collective bargaining power in the
International market by commanding the collective monopoly of exporting these
specific Agricultural commodities to the rest of the world. It will be an
impetus to the Balance of Trade positions and the Foreign Exchange earnings of
these countries. In the present trend of Globalisation, the same countries depend
upon inflow of foreign capital in the form of FDI and FII to create foreign
exchange reserves for themselves. The growth of Free Trade policies among the
SAARC countries will make the economies of these countries fundamentally strong
with the power of collective bargaining in the International market rather than
depending on temporary and fluctuating inflow of foreign capital. This Paper
even envisages the possibility of the development of common South Asian
monetary system with Rupee as the common currency for all the member countries.
This common monetary system will promote the International Economic Integration
among South Asian countries and this Integration will be the base of permanent
peace in the South Asian region. The budgetary expenditure on defence services
will be reduced to the minimum level in every member country and the budgetary
funds will be utilised for promoting best of Socio-economic Infrastructure in
the South Asian region. There will be the Power Shift from the European Union
to SAARC if this dream is realised.
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