Preliminary study on Pakistan and China trade partnership post FTA

Pakistan and China have shared close diplomatic relations with each other since 1951 with a strong military relationship and developing economic ties. China has contributed significantly to the development of Pakistan’s industrialization and fields of infrastructure, defence and technology. The two countries have vowed to continue cooperation and deepen their strategic partnership via many agreements and accords over the years.

Regional trade is a huge opportunity for economic growth in Pakistan and must be assigned priority in Pakistan’s economic policy. The signing of the Free Trade Agreement (FTA) between Pakistan and China in 2006 presented an opportunity for Pakistan to improve its overall trade performance while steering its exports composition towards geographically viable and hence, more profitable locations.

It is important to review the outcome of the first phase of the agreement and determine how effective the FTA was in improving bilateral trade between the two countries. Given the sobering trends of Pakistan’s global economic performance, we aim to investigate whether the FTA helped change the dynamics of Pakistan’s trade at all and if it could, what areas Pakistan ought to focus on in the future to utilize the FTA maximally and which areas could be protected.