China Pakistan Free Trade Agreement: Economic Impact on Pakistan
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Date
2018
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UMT.lahore
Abstract
China and Pakistan had established diplomatic relations since 1950. Pakistan was one of the very few countries who recognized People‟s Republic of China. The most important aspect of establishing relations was the economic aspect. Both the countries were looking market for their products as well as sources to import raw material for industries. The very first bilateral trade agreement was signed in March 1963 and they accorded „Most Favoured Nation” (MFN) status to each other. The diplomatic, defense, strategic and political relations expanded but they were unable to change it into strong economic relations. The bilateral trade figures show that the volume of this trade remained near to $ 500 million till the year 2000. The most significant change in relations was visible in 21st century. China and Pakistan signed several bilateral trade agreements to enhance trade including PTA, EHP and FTA. This thesis focused on the China Pakistan Free Trade Agreement and its impact on Pakistan. The methodology adopted for this thesis is qualitative and documentary analysis used to analyze the primary and secondary sources. Neoliberal Institutionalism gives this thesis the much-needed theoretical lens to view the major bilateral events and economic cooperation between China and Pakistan. The trade figures clearly showed that there is enormous growth in the volume of trade after the implementation of FTA. However, it is also clear that the imports from China enhanced at a rapid pace but exports to China were unable to capitalize the world‟s largest market. It is also important to note that first phase of FTA did not proved beneficial for Pakistan so the government of Pakistan is demanding preferential treatment from China on certain items. The negotiations for second phase are still in progress despite of lapse of almost four years now.