1. Regional Trade and Economic Cooperation: Analytical and Policy Issues Dr. Ram Upendra Das Fellow upendra900@gmail.com Presented at TERI Workshop on WTO-related Issues for Government officials in the SAARC Region, 03 May 2006 New Delhi

2. Introduction Broader Analytical Issues Trade-Industry-Investment-Development Relationship Policy Issues including Safeguard Mechanisms Rules of Origin

3. Broader Analytical Issues Regionalism and Multilateralism Level Playing Field and Efficiency Concerns Trade-Development Relationship Trade-Industry Linkages: Process of Industrialization Trade-Investment Linkages Static and Dynamic Gains

4. Trade-Development Relationship Two-way Causality Trade Creation and Diversion Distribution of Trade Gains Rules of Origin Developmental Role Confusion w.r.t. Trade Deflection

5. Trade-Investment Linkages Trade created by investments Investments necessitated/spurred by trade regimes Trade-Industry-Investment Linkages Efficiency-seeking industrial restructuring Horizontal and Vertical Integration Value Addition,Employment,Development Trade Account deficits and Capital A/c surplus

6. Static and Dynamic Gains Tariff reduction: Impact on Trade Volume Over time, Economies of scale and specialization: Impact on Trade Volume through enhancing product- competitiveness Market Access to scale economies to competitiveness

7. Policy Issues including Safeguard Mechanisms Policies to balance conflicting objectives Developmental Perspective as against Protection Balancing Liberalization and Safeguards Different Objectives Achieved Through Different Safeguards Safeguard Mechanisms Tariff Liberalization Sensitive List Tariff Rate Quota Rules of Origin Trade Remedial Measures SafeguardsTBT/SPS/MRAs

8. Rules of Origin (ROO) Rules of Origin: Conceptual Issues Meaning Trade Diversion/Trade Deflection Checking Third Country Imports and not Imports per se Nuances of Different Modalities of Origin Determination Change in Tariff Classification Percentage Test Specific Process Test Merits and Demerits A Combined Approach Economic Effects of ROO Trade and Development Non-tariff barriers

9. Thank You