4 B. Regional trade agreements (RTAs)

The rationale and the economics: RTAs (free-trade areas, customs unions) liberalise among members — trade creation (efficient member production replaces inefficient domestic) vs tradediversion (the member's now-privileged good replaces a cheaper non-member's — Viner's classic pair): the net depends on design.1. SAFTA (the SAARC Free Trade Area): SAARC (1985) → SAPTA (1993, the preferential start) → SAFTA (signed 2004, effective 2006): tariff liberalisation among the eight SAARC members — with the sensitive lists' exemptions, the long implementation ladders, and the India–Pakistan freeze's paralysis: the promise (South Asia the world's least-integrated region) versus the practice (intra-SAARC trade still a sliver of the members' totals). Nepal's SAFTA position rides mainly on the India–Nepal trade treaty regime (the separate, deeper bilateralframework — the open border's commerce, the renewal cycles of 1996/2009 — ECO-I 5.1's structural tie).2. BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and EconomicCooperation): founded 1997 (as BIST-EC), now seven members — Bangladesh, Bhutan, India, Myanmar, Nepal (joined 2004), Sri Lanka, Thailand — the bridge between South Asia andSoutheast Asia: the sectors' agenda (trade and investment, transport, energy, counter- terrorism cooperation) and the long-negotiated free-trade framework; the strategic significance for Nepal: an eastern corridor of engagement that diversifies the India-dependence (Nepal's BIMSTEC activism — the summits' Kathmandu presence). The comparison that earnsmarks: WTO = the global rulebook (universal, slow, deep); SAFTA…