Question

Q94. The South Asian Free Trade Agreement (SAFTA) has not been a success because of:

1. Narrow export bases of countries.

2. Lack of bilateral free trade agreements.

3. Political hurdles.

Select the correct answer using the codes given below.

• A. (a) Only 1 and 2
• B. (b) Only 1 and 3
• C. (c) Only 2 and 3
• D. (d) All of the above

Answer 1

The correct option is B

(b) Only 1 and 3

Because of narrow export base of countries, they compete with each other in limited goods and there is thus very low complementarity. Political hurdles are self-evident. Now there are already many bilateral trade agreements in South Asia (like India-Sl; Pak-Sl etc). So trade takes the bilateral route as it is easy rather than the multilateral SAFTA route. Hence statement 2 is incorrect.