Abstracts
Panel:
Regional Trade: The Way Forward
Sector based examinations of trade activity
An approach to prune sensitive lists of Bangladesh: Preliminary findings from a cross-country study
Sector based examinations of trade activity
Faisal Shaheen*
Bilateral trade within South Asia has been precarious and slow. Regional trade has been hampered through SAFTA and SAPTA stalling. Recent evidence of trade trends across South Asia, intra regionally and extra regionally are compared – to assess where the shift has been. How relevant is Pakistan’s trade policy strategy given the realities of regional trade as compared to extra regional trade? Pakistan maintains a positive and banned list of items. The positive list has expanded substantially during Musharraf’s era. With SAFTA now a reality, many nations are developing several sensitive lists to balance regional and bilateral relations. This study examines the level of trade between Pakistan and its SAARC neighbours, as compared to partners beyond the region. Comparisons are drawn with other nations and their extra regional trade to assess the proportions and trajectories of openness that have emerged in the last decade. The policy aim of the study is to assess the real level of trade that is taking place in light of SAFTA commitments.
In terms of methodology, secondary analysis of UN COMTRADE data will reveal a comparison of regional versus extra regional trade by each of the nations, as compared to Pakistan, which will determine current trade directions and trajectories of trade policy. Trade in particular items over others will be assessed and compared, with implications for what has been listed on the positive list versus those that have not. The exercise will be done for a three-year period, using sector based coding and analysis from the Ministry of Commerce’s binding trade policy commitments. Country import data and product codes will be separated between 2005, 2006 and 2007. Raw data for the products that have been reported and exposed to sensitive, positive or bilateral lists for Bangladesh, India and Sri Lanka and other SAARC nations will be outlined. Policy implications will appear for some products over others in the context of SAFTA in light of total country export data and world export market data. Evidence will suggest that policy conditions are misaligned with market realities and trade in other items beyond the region is increasing rather than within SAARC. Findings will point to the value of a more sector-based approach, which it is suggested, should be followed.
 *Faisal Haq Shaheen is a PhD candidate at Ryerson University’s Policy Science Program. He is also a Business Management Analyst with the Municipality of Toronto and serves as a Visiting Research Associate at SDPI.
An approach to prune sensitive lists of Bangladesh: Preliminary findings from a cross-country study
Khondaker Golam Moazzem* and Kishore Kumer Basak**
A long sensitive list maintained by member countries of South Asian Free Trade Area (SAFTA) has been argued as a major stumbling block towards enhancing intra-regional trade of South Asian countries. While intra-regional trade was less than 5 percent of members’ total trade, the share of trade under SAFTA accord was less than 1 per cent of total intra-regional trade. There was not much progress with regards to reduction of the sensitive lists despite the fact that revision of the list was supposed to be take place every four years. Currently, member countries are working on reviewing the sensitive list. Taking into account the ongoing initiative, a cross-country study titled “Making SAFTA Effective: An Approach to Prune Sensitive Lists in South Asia” is recently being initiated by the ICRIER, India in collaboration with five research organisations of South Asian countries (i.e. CPD in Bangladesh, Indian Council for Research on International Economic Relations in India, SDPI in Pakistan, South Asia Watch on Trade, Economics and Environment in Nepal and Institute of Policy Studies in Sri Lanka). The objective of the study is to examine the sensitive lists of member countries, and to suggest ‘offer’ lists that can be pruned from the lists.
The country study on Bangladesh is being carried out from the perspective of Bangladesh’s import interest. At present, Bangladesh is maintaining two sensitive lists: 1241 products for non-LDCs and 1233 products for LDCs. According to the methodology for country studies, sensitive lists have been reviewed by taking into account the following aspects: export competitiveness and trade potentials of member countries, and possible losses of revenues and adverse impact on domestic industries because of pruning the sensitive products. Based on the WITS database, an analysis on revealed comparative advantage (RCA) and trade potentials has been carried out. Using the data collected from the National Board of Revenue (NBR), an analysis on collection of revenue from import duties and various other duties as well as analysis on categories of sensitive products have been carried out. The outcome of the analysis has been shared with two major stakeholders such as textiles and light engineering sectors in order to take into account their issues and concerns.
Using several threshold levels (such as RCA>1, trade potentials>0, generation of revenue less than US$0.3 million from a particular product in a year and categories of products) a total of 219 and 231 products have been identified from the sensitive lists of non-LDCs and LDCs respectively which could be considered for pruning. The proposed lists include about 18 percent of total sensitive products of which about 3 percent are basic raw materials, 65 percent are intermediate goods and the rest 32 percent are capital machineries. The proposed lists would contribute to enhance bilateral trade with Bangladesh by making industrial inputs available at low costs perhaps with less trade diversion effect and relatively less revenue losses as well as less impact on domestic industries.
* Dr. Khondaker Golam Moazzem is a Senior Research Fellow at the Centre for Policy Dialogue (CPD), Dhaka, Bangladesh.
** Kishore Kumer Basak is a Research Associate at the Centre for Policy Dialogue, Dhaka, Bangladesh.
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