Impacts of the Free Trade Agreement on Pakistan Export to China and Economic Growth
Journal of Contemporary Issues in Business and Government,
2021, Volume 27, Issue 5, Pages 644-662
10.47750/cibg.2021.27.05.040
Abstract
The Free Trade Agreements between Pakistan and China increased the trade prospectsbetween Pakistan China, resulting in an increased trade deficit in Pakistan with China. The
study is based onhow the FTAs impact exports in Pakistan. This paper's results suggest a
positive contribution of FTAs to Pakistan's exports in China's economy and the imports from
China. However, the increase in imports is much higher than the increase in exports after
Pakistan entered into subsequent FTAs with China. As a result, there is an increase in the
Pakistan trade deficit, and the growth prospects of Pakistan suffered. The constant
marketsuggests that,by focusing on products that enhance
Pakistan'scomparativeadvantage,improving infrastructure, efficient tariff line utilization, and
deep understanding of China's market, all are necessary for Pakistan to benefit from FTAs;
otherwise, their provision becomes counterproductive. It is concluded that Pakistan needs to
reduce the trade deficit with China as it negatively impacts its macroeconomic situation.
Exports enhanced by investing in innovative technologies andreduced importsthrough
production inland.
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