Analysis Of Agricultural Productivity And Growth On Safta (South Asian Free Trade Agreement) And Its Imact On Economy Of Pakistan By Using CGE Model

Abstract

This research explore the opportunities and analyzing the cost andbenefit on Pak-India trade on South Asian Free Trade Agreement (SAFTA)and its possible impact on the welfare of both countries. Pak-India trade on SAFTA create opportunities for the both countries in export Laid growth. In First Scenario when normal trading relation will be restores and given MFN(Most Favored Nations) status given to each other to attack the trade between two countries. The Global trade analysis GTAP model is used to analyze the possible impact of SAFTA on Pakistan in a multi country, multi sector applied General equilibrium frame work. After employing the simplified static analysis framework, the analysis based on simulations revealsthat current demand for Pakistani Basmati Rice and other consumer items like leather and cotton-made garments will expand after the FTA and consumer surplus will increase. The export of Rice, leather and cotton-made garments may be conducted by two scenarios, i.e. when normal trading relations between Pakistan and India will be restored and when there will be a free trade between Pakistan and India in the presence of South Asian Free Trade Agreement (SAFTA). Results based on this research reveal that on SAFTA, grounds, there will be net export benefi ts in Pakistan’s economy.

Keywords

• Agriculture
• Trade liberalization
• FTA
• SAFTA
• Welfare gain
• Economy