Question

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

1. Narrow export base of countries.
2. Lack of bilateral free trade agreements.
3. Political hurdles.

Select the correct answer using the codes given below. 

Options

• 1 and 2 only

• 1 and 3 only

• 2 and 3 only

• 1, 2 and 3 

Answer 1

1 and 3 only

Explanation:

Because countries have a small export base, they compete with each other in a limited number of items, resulting in very low complementarity. Political obstacles are unavoidable. South Asia now has a plethora of bilateral trade agreements. As a result, trade prefers the bilateral route to the multilateral SAFTA method since it is more convenient.