Impacts of the Free Trade Agreement on Pakistan Export to China and Economic Growth
Keywords:
Free Trade Agreement, Bilateral Trade, Trade Potential, Comparative AdvantageAbstract
The Free Trade Agreements between Pakistan and China increased the trade prospects between 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's comparative advantage,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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