Analyzing the China-Pakistan Free Trade Agreement: Implications and Lessons for Pakistan's Future Free Trade Agreements

Abstract

One notable development in the two nation's bilateral trade relations is the formation of the China-Pakistan Free Trade Agreement (CPFTA) in 2007. However, CPFTA has run into several flaws and difficulties, giving Pakistan invaluable experience negotiating new FTAs with other nations. This study aims to provide a critical analysis of CPFTA by highlighting some damaging facts concerning Pakistan's economy. The study found that Pakistan has always been on the losing side since 2007, signing the CPFTA. The trade deficit is one most important and key reasons that increased due to unsuitable tariff concessions and massive imports from China. This disparity draws attention to the need for more equitable trade agreements and raises questions about the unequal distribution of benefits. Pakistan's low export capacity and lack of competitiveness in several industries have made it difficult for the country to fully reap the benefits of the CPFTA. In light of these shortcomings, it is suggested that thorough impact analyses are necessary to foresee and reduce any potential negative effects on local businesses and the economy. To guarantee a more equitable distribution of gains and shield vulnerable sectors from unjust harm, safety mechanisms and the involvement of local stakeholders must be included.