Economic Integration in the Region of South West Asia

Globalization and the quick and deep evolution in the structures of world communication, bloc formation in the world during the recent half century, make it essential to search for a new definition of efficient and effective collaborations in relationships and regional cooperations and formation of developmental strategies in South West of Asia. The purpose of this study is to investigate the success of probable regional bloc for Iran in south west Asia. This study uses Gravity Model to make a pattern to estimate trade effects. By using of this model (econometrics and Panel Data Model), the changes in trade among the included countries and among these countries and other countries in the world during 1995-2006 were investigated. The results of the study showed that the trade potential of Iran and economic integration of the countries include in the regional bloc of south west Asia in bilateral trade was 61 percent which showed that the integration of this bloc was positive and weak and stated that the amounts of the current bilateral trade among them were increased. Also the estimation of this model without Iran showed that the formation of the regional bloc will increase the trade among the members of the bloc, the amount of which is 71%.