Growing economic cooperation between the Pakistani and Turkish
governments—manifested in the recently proposed preferential trade agreement
(PTA)—has served to strengthen the historically good relations between both
countries. This paper explores the trade relationship between Pakistan and Turkey
in an attempt to analyze the potential gains for Pakistan under the proposed PTA.
We evaluate potential trade opportunities using descriptive statistics and three
trade indices: a trade complementarity index, export similarity index, and intraindustry
index. Our findings suggest that Pakistan’s trade surplus with Turkey,
strong export similarities, and intra-industry trade would allow greater
opportunities for firm synergies between the two countries. This, in turn, would
help Pakistan achieve greater value addition and a broader market base for its
exports. The Government of Pakistan should, therefore, lobby strongly for the
proposed PTA (which might later evolve into a free trade agreement) and leverage
the agreement in such a way that Pakistan can maximize its potential benefits.