Although South Asia includes less than one third of world’s population, the region comprises more than half of the world’s poor. Against this backdrop, poverty should be the focal point of any development policy designed for South Asian countries. Over the years, the issue of trade policy reforms (multilateral, regional and domestic) and poverty has generated many controversies, and to date no general consensus has been achieved in this area. A large number of cross-country studies suggest that trade liberalization stimulates economic growth and thereby reduce poverty in a sustained manner. In those studies, increased competitiveness, better foreign technologies or economies of scale are thought to be the positive consequence of trade liberalization. However, there are also arguments that the short run impacts of trade liberalization on poverty are likely to be different from the medium or long run impacts. While in the short run there may be some negative impacts, in the long run trade liberalization is supposed to generate positive impacts on poverty reduction. SANEM’s purpose will be to identify the impacts of trade liberalization on poverty in South Asian countries through the use of sophisticated economic modeling techniques. At the same time, SANEM will try to provide specific suggestions for policy makers as well as stakeholders so that the region can minimize the adverse effects of liberalization. It is also important to note that a number of South Asian countries are going through the PRSP process, and therefore, linking PRSP and MDGs with trade negotiations will be very important to explore.