Impacts of FTA

Q.  Which of the following are impacts of FTAs like SAFTA and India-ASEAN CECA?

1) Increase of our trade
2) Increase in share of imports of raw materials
3) Provide opportunities for export of agricultural products
- Published on 17 Nov 16

a. 1, 3
b. 2, 3
c. 1, 3
d. All of the above

ANSWER: All of the above
 
  • The trade data with FTA partners, prior to and after implementation of the agreement indicates that there has been a significant increase of our trade.
  • Moreover, studies also indicate that increase in share of imports of raw materials, intermediate goods and capital goods could lead to enhanced efficiencies in domestic production and thus contribute to greater exports.
  • The overall effect on trade of an FTA is positive and statistically significant.
  • The free trade agreement (FTAs) do provide opportunities for export of agricultural (including processed) products of interest for macro, small and medium enterprises (MSMEs).

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