Intra-ECO Trade: A Potential Region for Pakistan’s Future Trade

Jahangir Khan Achakzai

Abstract


A standard gravity model was applied to estimate the magnitude
of potential trade flows between Pakistan and the nine ECO member
countries. The major issue in this analysis is to explore that Intra-
ECO trade has great potential for Pakistan and that it got lower share
than its potential. The results from the gravity model confirm that ECO
has a positive and significant impact on intra-regional trade. It
suggests that intra-regional trade is lower than what would be predicted
by the gravity equation, suggesting greater scope for regional
integration among the ECO member countries. This is especially the case
between countries that have a common geographical border. The privilege
of geography and the existence of trade preferences among ECO members
could be expanded to cover potential trade to neighboring
countries.

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DOI: https://doi.org/10.30541/v45i3pp.425-437

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