S. Perera<\/b><\/p>\n University of Sri Jayewardenepura<\/i><\/p>\n \n<\/div><\/div><\/div><\/div><\/div><\/section> Abstract<\/b><\/p>\n During the last couple of decades, trade policy reforms have been initiated in\u00a0almost all South Asian countries with a view to integrating with the world\u00a0<\/span>economy and improving their growth prospects. This paper provides a\u00a0<\/span>quantitative assessment of the likely implications of trade liberalization in South\u00a0<\/span>Asian economies, using a multi-country CGE model with enhanced multihousehold framework. The study examines the impact of trade liberalization in\u00a0<\/span>South Asian countries on the economies of South Asia, with particular emphasis\u00a0<\/span>on trade and welfare impacts of unilateral trade liberalization and South Asian\u00a0<\/span>Free Trade Agreement (SAFTA). The findings revealed that, amongst the two\u00a0<\/span>trade policy options considered, unilateral trade liberalization ensures the\u00a0<\/span>highest welfare to all South Asian members in compared to SAFTA.\u00a0<\/span>Furthermore, the results indicate that overall household income will increase in\u00a0<\/span>all South Asian countries under both trade policy options considered though the\u00a0<\/span>gains are greater under the unilateral trade liberalization. The industry level\u00a0<\/span>projections indicate that, exports and imports increase significantly in all South\u00a0<\/span>Asian countries under unilateral trade liberalization than under the SAFTA\u00a0<\/span>both in the short-run and long-run. Thus, unilateral trade liberalization may be\u00a0<\/span>likely to expand the total trade in South Asia in the world market.<\/span><\/p>\n \n<\/div><\/div><\/div><\/div><\/div><\/section> Keywords<\/b><\/p>\n Multi-Country CGE Model; Welfare impacts; Regional and Unilateral Trade\u00a0Liberalisation<\/span><\/p>\n \n<\/div><\/div><\/div><\/div><\/div><\/section>