South Asian Free Trade Area (SAFTA) and Regional Integration

The issues of trade liberalization, free trade, and regional as well as global economic integration are the subjects of widely focused area in international trade and policy research. Following the growing trend of other regional trade blocks for trade liberalization and market integration like: ASEAN Free Trade Area (AFTA) formed in 1993, The North American Free Trade Agreement (NAFTA) created in 1994, the deeper integration and continue expansion of European Economic Community (EEC), the agreement of South Asian Free Trade Area (SAFTA) was signed in January 2004. SAFTA initiates to start up regional trade integration after two decades of the establishment of South Asian Association for Regional Cooperation (SAARC). While forming SAFTA, it aimed to act as a stimulus to the strengthening of national and SAARC economic resilience, and the development of national economies of the contracting states by expanding investment and production opportunities, trade, and foreign exchange earnings as well as the development of economic and technological cooperation. Based on these, the purpose of this paper is to explore the real ground of market integration in South Asia and attempts to examine trade realities. Further, it also examines the potentialities of implication of SAFTA identifying its possible direction for future. Based on secondary source of information, trades within the region are more focused to reach into the conclusion. Even though, high potentialities remained for trade and investment integration in this region, it is understood that it lags behind market led integration. The statistical evidence shows that intra-regional trade among South Asian Region is rising slowly, indicates prospects as well as challenges for regional economic integration. Therefore, this paper argues some way forwards to be able to nurture the benefit of SAFTA. The literature in the area of SAFTA is dearth and it is expected that this paper might contribute to the field and provide worth to the policy makers of this region.