Joint Effort

March 14, 2008 (LBO) – South Asian countries should reduce transaction costs and take measures to protect employment-intensive industries to reap more effective gains from a regional free trade deal, a new study has said. The study on the benefits of the South Asia Free Trade Agreement (SAFTA) shows that it will contribute to stronger economic growth in the region.

But it said that, while some sectors will lose and others gain in each country, the net effect on economic output is positive.

"The results suggest that in order to maximise gains, it would be important to give flexibilities for countries to protect employment intensive manufacturing sectors in the smaller LDCs (Least Developed Countries)," said the study.

It was sponsored by the Asian Development Bank and the United Nations Conference on Trade and Development-India.

The findings of the study were discussed at a meeting Thursday of stakeholders consisting of government, private sector, academia and civil society organised by the Institute of Policy Studies, a think tank.

"The adoption of a transparent and effective regional safeguard mechanism for agricultural products could help to take care of sensitivities in agriculture that are bou

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