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Economic Effects of the Recently Signed Pak-China Free Trade Agreement

Author

Listed:
  • Samina Shabir

    (Debt Office, Ministry of Finance Government of Pakistan, Islamabad.)

  • Reema Kazmi

    (Debt Office, Ministry of Finance Government of Pakistan, Islamabad.)

Abstract

Factor endowments and cross country differences create regional disparities among states. The disparity in sizes between the Chinese and Pakistani economies can lead to the creation of trade patterns that can positively or negatively impact the latter’s economy. The present paper attempts to analyze the pros and cons of forming a Free Trade Agreement (FTA) with China given the size, structure and trade patterns of Pakistan’s existing economy. It also deals withthe crucial questions of: Can the formation of an FTA with China benefit Pakistan? Will trade liberalization under an FTA with a neighboring countrylike China spur Pakistan’s trade and growth? Looking at trends and trade patterns of Pakistan, the potential of Pakistan’s existingeconomy is analyzed to enhance interregional trade and export diversification by further deepening cooperation with China. In the light of this analysis, the paper also outlines a number of recommendations to extract the maximum benefit for Pakistan’s economy from this recently signed FTA with an old economic partner, China.

Suggested Citation

  • Samina Shabir & Reema Kazmi, 2007. "Economic Effects of the Recently Signed Pak-China Free Trade Agreement," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 12(Special E), pages 174-202, September.
    • Handle: RePEc:lje:journl:v:12:y:2007:i:sp:p:174-202
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    References listed on IDEAS

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    1. Biswajit Nag, 2005. "Trade cooperation and performance in East and South Asia: towards a future integration," Asia-Pacific Development Journal, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), vol. 12(1), pages 1-29, June.
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    Cited by:

    1. Shah Mehmood WAGAN, 2015. "Export boost of textile industry of Pakistan by availing EU’s GSP Plus," Journal of Economics Library, KSP Journals, vol. 2(1), pages 18-27, March.
    2. Sobia Jamil & Syed Ali Shah & Muhammad Shoaib Malik, 2019. "China-Pakistan Economic Interdependence," Global Economics Review, Humanity Only, vol. 4(1), pages 85-99, March.
    3. Wani Suadat Hussain & Mir M. Afzal, 2023. "Import Determinants and Potential Markets of Pakistan: An Application of PPML Gravity Model," Studia Universitatis „Vasile Goldis” Arad – Economics Series, Sciendo, vol. 33(1), pages 57-73, March.
    4. Chunding Li & Jing Wang & John Whalley, 2014. "China's Regional and Bilateral Trade Agreements," NBER Working Papers 19853, National Bureau of Economic Research, Inc.
    5. Sasidaran Gopalan & Ammar A. Malik & Kenneth A. Reinert, 2013. "The Imperfect Substitutes Model in South Asia," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 14(2), pages 211-230, September.
    6. Wagan, Shah Mehmood, 2015. "Export boost of Textile Industry of Pakistan by availing EU’s GSP Plus," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 1(1), pages 18-27.
    7. Syed H. Shah & Muhammad A. Kamal & Da L. Yu, 2022. "Did China‐Pakistan free trade agreement promote trade and development in Pakistan?," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 27(3), pages 3459-3474, July.

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