[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/ags/pugtwp/332075.html
   My bibliography  Save this paper

Potential Economic impact of India-Sri Lanka bilateral trade liberalization

Author

Listed:
  • Sikdar, Chandrima
Abstract
India and Sri Lanka accounts for the largest bilateral trade flow in the SAARC region. The Free Trade in Goods Agreement (ISFTA) between the countries which was operationalized in March 2000 accelerated the bilateral trade flows and India is now Sri Lanka’s largest importer and among the top five destinations for Sri Lankan exports. The countries have now moved towards negotiations on Comprehensive Economic Partnership Agreement (CEPA) with the aim of providing additional market access to each other. Against this backdrop, the present paper attempts to study the likely impact of this bilateral trade liberalization. Using the GTAP 7 database the study conducts simulation involving the scenario of the bilateral trade liberalization between India and Sri Lanka and assesses the potential economic impact of this liberalization on the economies. The paper also incorporates features of imperfect competition and scale economies for select manufacturing sectors in India and seeks to understand the welfare implications of the same. A large number of Indian exporters also use the duty drawback scheme extensively to import various inputs at world prices from Sri Lanka. The present paper uses the GTAP-DD model to study the implications of this feature of India-Sri Lanka bilateral. The simulation results show that post the FTA there is a significant increase in the volume of bilateral trade flows. Both countries gain but India’s gains are relatively small. However, gains accruing to India improve when scale economies prevailing in some Indian industries are taken into account. Welfare position is almost reversed when duty drawback in some of Indian sectors are factored in. India gains more than Sri Lanka. Thus, greater market access into India through the preferential route seems to be a more profitable proposition for Sri Lanka.

Suggested Citation

  • Sikdar, Chandrima, 2011. "Potential Economic impact of India-Sri Lanka bilateral trade liberalization," Conference papers 332075, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:332075
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/332075/files/5270.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Valentina Bosetti & Ruben Lubowski & Alexander Golub & Anil Markandya, 2009. "Linking Reduced Deforestation and a Global Carbon Market: Impacts on Costs, Financial Flows, and Technological Innovation," Working Papers 2009.56, Fondazione Eni Enrico Mattei.
    2. Tavoni, Massimo & Sohngen, Brent & Bosetti, Valentina, 2007. "Forestry and the carbon market response to stabilize climate," Energy Policy, Elsevier, vol. 35(11), pages 5346-5353, November.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Enrica De Cian & Valentina Bosetti & Alessandra Sgobbi & Massimo Tavoni, 2009. "The 2008 WITCH Model: New Model Features and Baseline," Working Papers 2009.85, Fondazione Eni Enrico Mattei.
    2. Philippidis, G. & Resano, H. & Sanjuan, A.I. & Bourne, M. & Kitou, E., 2012. "Shifting Armington Trade Preferences: A re-examination of the Mercosur-EU negotiations," Conference papers 332171, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    3. Vass, Miriam Münnich & Elofsson, Katarina, 2016. "Is forest carbon sequestration at the expense of bioenergy and forest products cost-efficient in EU climate policy to 2050?," Journal of Forest Economics, Elsevier, vol. 24(C), pages 82-105.
    4. Elofsson, Katarina & Gren, Ing-Marie, 2013. "Should forests be used as uncertain carbon sinks or uncertain fossil fuel substitutes in the EU Roadmap to 2050?," Working Paper Series 2013:8, Swedish University of Agricultural Sciences, Department Economics.
    5. Popp, Alexander & Krause, Michael & Dietrich, Jan Philipp & Lotze-Campen, Hermann & Leimbach, Marian & Beringer, Tim & Bauer, Nico, 2012. "Additional CO2 emissions from land use change — Forest conservation as a precondition for sustainable production of second generation bioenergy," Ecological Economics, Elsevier, vol. 74(C), pages 64-70.
    6. De Cian, Enrica & Favero, Alice, 2010. "Fairness, Credibility and Effectiveness in the Copenhagen Accord: An Economic Assessment," Sustainable Development Papers 59478, Fondazione Eni Enrico Mattei (FEEM).
    7. Valentina Bosetti & Carlo Carraro & Massimo Tavoni, 2008. "Delayed Participation of Developing Countries to Climate Agreements: Should Action in the EU and US be Postponed?," Working Papers 2008.70, Fondazione Eni Enrico Mattei.
    8. Skidmore, Samuel & Santos, Paulo & Leimona, Beria, 2012. "Seeing REDD: A Microeconomic Analysis of Carbon Sequestration in Indonesia," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126688, International Association of Agricultural Economists.
    9. Kim, Yoon Hyung, 2011. "A Comparison of Global Timber Models," Journal of Rural Development/Nongchon-Gyeongje, Korea Rural Economic Institute, vol. 34(3), pages 1-13, July.
    10. Alice Favero & Robert Mendelsohn, 2013. "Evaluating the Global Role of Woody Biomass as a Mitigation Strategy," Working Papers 2013.37, Fondazione Eni Enrico Mattei.
    11. Nguyen, Trung Thanh & Nghiem, Nhung, 2016. "Optimal forest rotation for carbon sequestration and biodiversity conservation by farm income levels," Forest Policy and Economics, Elsevier, vol. 73(C), pages 185-194.
    12. Sedjo, Roger A. & Sohngen, Brent, 2007. "Carbon Credits for Avoided Deforestation," RFF Working Paper Series dp-07-47, Resources for the Future.
    13. Alice Favero & Robert Mendelsohn & Brent Sohngen, 2017. "Using forests for climate mitigation: sequester carbon or produce woody biomass?," Climatic Change, Springer, vol. 144(2), pages 195-206, September.
    14. Majah-Leah V. Ravago & James A. Roumasset, 2015. "Rethinking Baselines: An Efficiency-based Approash to Better REDD+ Governance," Working Papers 201515, University of Hawaii at Manoa, Department of Economics.
    15. Szolgayová, Jana & Golub, Alexander & Fuss, Sabine, 2014. "Innovation and risk-averse firms: Options on carbon allowances as a hedging tool," Energy Policy, Elsevier, vol. 70(C), pages 227-235.
    16. Hou, Guolong & Delang, Claudio O. & Lu, Xixi & Olschewski, Roland, 2020. "Optimizing rotation periods of forest plantations: The effects of carbon accounting regimes," Forest Policy and Economics, Elsevier, vol. 118(C).
    17. Gren, Ing-Marie & Carlsson, Mattias & Elofsson, Katarina & Munnich, Miriam, 2012. "Stochastic carbon sinks for combating carbon dioxide emissions in the EU," Energy Economics, Elsevier, vol. 34(5), pages 1523-1531.
    18. Edwin Van Der Werf & Sonja Peterson, 2009. "Modeling linkages between climate policy and land use: an overview," Agricultural Economics, International Association of Agricultural Economists, vol. 40(5), pages 507-517, September.
    19. Asbjørn Aaheim & Rajiv Chaturvedi & Anitha Sagadevan, 2011. "Integrated modelling approaches to analysis of climate change impacts on forests and forest management," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 16(2), pages 247-266, February.
    20. Michetti, Melania & Parrado, Ramiro, 2012. "Improving Land-use modelling within CGE to assess Forest-based Mitigation Potential and Costs," Climate Change and Sustainable Development 122862, Fondazione Eni Enrico Mattei (FEEM).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:pugtwp:332075. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/gtpurus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.