This article examines the basic economic background of the seven South Asian countries (Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan and India), their growth in imports intra-SAARC, direction and composition of trade in South Asia, and the relative importance of the South Asian trade in the global trade. The trends and patterns of growth in exports and imports in South Asia over the period 1991 to 2005 have been discussed in this article along with trends in intraregional trade. Developed industrial economies are also important suppliers of imports to South Asia and noticeable proportion of imports to the region are sourced from the Middle East.

Australia's trade with India and South Africa has been growing steadily in recent times. These countries have become more liberalized in trade during the last five years and they also play a significant role in the Indian Ocean Rim-Association for Regional Cooperation (IOR-ARC). It has been proposed that Australia should take the initiative informing effective cooperation with India and South Africa for complete free trade. This paper examines the trade links between these three countries and then evaluates quantitatively the likely effects of the establishment of a bilateral Free Trade Agreement (FTA) between them. GTAP (Global Trade Analysis Project) model has been used to quantify the effects of the FTA. The results provide some indication of the magnitude of the welfare gains involved under free trade and shed some light on prospects for trade liberalization in IOR countries.

A computable general equilibrium (CGE) model is developed to evaluate some of the causes of deforestation in the Philippines. To quantify deforestation effects, the elasticities of various parameters of deforestation as identified in the literature are evaluated. The main conclusion derived is that the factors that have a relatively more direct influence on the level of harvest such as annual allowable cut would have a greater effect on deforestation rate than population growth and off-farm employment opportunities.

This paper uses a computable general equilibrium (CGE) model to investigate the impact on poverty of trade liberalisation in Bangladesh. The simulation results show that the complete removal of tariffs favours export oriented sectors in the economy. With trade liberalisation, rural and urban areas experience an overall reduction in poverty in the short run. However, a marginal increase in the poverty gap and poverty severity for urban areas is projected, implying that the poor become poorer in urban areas. Moreover, poverty incidences vary among various socio-economic groups. In the short run, poverty incidence increases for rural landless and urban illiterate and low-educated household groups. In contrast, the long run results highlight that trade liberalisation reduces absolute poverty for all groups both in rural and urban areas.

A bilateral Free Trade Agreement (FTA) between Australia and the United States came into effect on 1st January 2005. Since the U.S. is one of the main trading partners for Australia, it was anticipated that the FTA would bring a substantial increase in Australia's bilateral trade with the United States. It would also have important implications for Australia's other main trading partners such as Japan, and China. This paper seeks to provide a quantitative assessment of the impact of the FTA by undertaking simulations usingthe Global Trade Analysis Project (GTAP) model. By simulating the GTAP multi-country CGE model, the paper evaluates various economy-wide effects, sectoral level effects, and trade diversion and trade creation effects in the two countries in response to bilateral free trade. It will also identify the effects on trading partners outside the FTA. The results will provide a preliminary indication of the magnitude of welfare gains involved.

In this era of globalisation, along with other countries, South Asian Association for Regional Cooperation (SAARC) countries have been continuing to open up their economies, due to commitments to WTO and some donor agencies such as International Monetary Fund (IMF) and World Bank. Recently, these countries have signed the framework agreement on South Asian Free Trade Area (SAFTA), under which, they are committed to dismantle all tariff and non-tariff barriers to trade in the region within a short period starting from 2006. The main objective of this study is to evaluate the likely effects of trade policies of the governments of SAARC countries, with particular emphasis on the rice sector. By taking Bangladesh as a special case, a partial equilibrium rice model is formulated, where the consumer side is represented by a demand system for cereals and the producer side by a paddy supply function. Econometrically estimated models were simulated by changing tariff levels that affect the retail price of rice. Two scenarios were examined: a baseline that simulates continuation of present tariff policy and one that assumes trade liberalisation. The model shows that demand for rice increases because of the reduced retail price, and the calorie intake also increases. However, rice production decreases, which, in turn, increases the import of rice.

The success of the proposed Australia-Japan Free Trade Agreement will depend, to a considerable degree, on the manner in which it deals with the problem of agricultural trade between the two countries. This paper seeks to provide a quantitative assessment of the potential impact of an Agreement between Australia and Japan by simulating two scenarios (full trade liberalisation and trade liberalisation excluding agricultural trade) and using the Global Trade Analysis Project model to estimate the effects. The results indicate the possible welfare gains under the two envisaged trade regimes.

The Indo-Lanka Free Trade Agreement (ILFTA) which was signed in December 1998 between India and Sri Lanka has shown a promising start to trade liberalisation among SAARC (South Asian Association for Regional Cooperation) countries. This paper provides a quantitative assessment of the likely impact of the ILFTA. We perform simulations using the Global Trade Analysis Project (GTAP) model to quantify the impact of liberlised trade between Sri Lanka and India. GTAP is a computable general equilibrium (CGE) model of the world economy. Using the model simulations, the paper also examines the implications of extending the free trade agreement to other SAARC nations. Results indicate that both Sri Lanka and India will experience some welfare gains from ILFTA. The extension of such trade agreement to all SAARC nations may create significant welfare improvements in Sri Lanka.

The global trading system has seen a very substantial increase in preferential trading arrangements over the past decade. The Australian government has signaled an interest in regional trade agreements and successfully signed Free Trade Agreements (FTAs) with Singapore, Thailand and the U.S., as well as a Closer Economic Relations Trade Agreement with New Zealand. The Australia-China Free Trade Agreement (ACFTA) is already in the process of being negotiated by the two governments. This study applies the Computable General Equilibrium (CGE) modelling approach using the Global Trade Analysis Project (GTAP) model and its database version 6 for a quantitative analysis of the economic effects of proposed ACFTA. Four scenarios with full merchandise trade liberalisation are examined in this study focusing on flexible and fixed current account positions within short run and long run respectively. Equivalent variation and real consumption are used to measure the welfare effects resulting from the formation of the ACFTA. The results from the GTAP simulations provide quantitative evidence that there are positive welfare effects for both Australia and China in all cases and the two economies would obtain gains according to their comparative advantage. The modelling results also indicate that the ACFTA has a negligible impact on the rest of the world's real GDP and welfare, and would generate trade creation greater than trade diversion for the world as a whole. It is evident that the ACFTA would have not only bilateral but global benefits. From Australia's perspective, securing closer economic integration with China via the ACFTA would be a strategically sensible option.

This paper examines the impact of trade liberalisation on regional and national economies in Indonesia using the computable general equilibrium (CGE) modelling approach. The study found that the liberalisation of Indonesian trade has a positive impact on both regional and national economies. The trade liberalisation improves the performance of regional economies differently in the short run. Tariff reforms would result in an increase in welfare as indicated by the increased real household consumption at both regional and national levels. The liberalisation of trade provides an overall expansion of foreign exports even though it results in significant increases in foreign imports, deterioration in the terms of trade and the worsening of inter-regional trade.