IPS Researchers Publish in Journal of Asian Economic Integration

Maximising benefits from trade integration requires not only tariff reductions but also smarter product selection strategies. A new study has shown that methods of identifying products for liberalisation based on comparative advantage often makes negotiations difficult, while a consolidated approach can expand opportunities and align with industrial policy goals.

Authored by Dr. Asanka Wijesinghe, Research Fellow, and Rashmi Anupama, Research Assistant, of the Institute of Policy Studies of Sri Lanka (IPS), the article “A Consolidated Product Identification Approach for Trade Agreements: An Application for the Indonesia–Sri Lanka Trade” was published in the Journal of Asian Economic Integration by SAGE Publications. The study applies a novel methodology that combines comparative advantage, technological relatedness, and strategic industrial priorities to broaden the product list for negotiations.

Using a partial equilibrium model, the authors estimate trade gains under different tariff‑elimination scenarios. Their findings highlight how Sri Lanka could strengthen its export basket by prioritising products with high growth potential and strategic relevance, including electric vehicle components, electronics, and green tradable goods. Applying the method for Indonesia–Sri Lanka trade the study identifies 687 products for Sri Lanka, compared to 149 under traditional methods, offering a more comprehensive basis for negotiations.

This research underscores IPS’ role in advancing evidence‑based policy dialogue on trade and integration. By situating Sri Lanka’s trade strategy within regional and global value chains, the study provides timely insights for policymakers seeking to maximise economic benefits from future trade agreements.