Special Edition-07.pdf - Lahore School of Economics

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172 Naheed Zia Khan WTO, 2001, “Market Access: Unfinished Business: Post-Uruguay Round Inventory and Issues”, Special Study No. 6, Geneva: World Trade Organization. WTO, 2003, International Trade Statistics 2003, Geneva: World Trade Organization.
The Lahore Journal of Economics Special Edition (September 2007) Economic Effects of the Recently Signed Pak-China Free Trade Agreement Samina Shabir * and Reema Kazmi ** 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 with the crucial questions of: Can the formation of an FTA with China benefit Pakistan? Will trade liberalization under an FTA with a neighboring country like China spur Pakistan’s trade and growth? Looking at trends and trade patterns of Pakistan, the potential of Pakistan’s existing economy 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. I. Introduction Free trade or globalization is a hotly debated phenomenon in the global village of today’s economic system. If the economic prosperity and growth of all the nations of the world could be brought at par with each other by the free flow of goods and services, regardless of borders, under the free trade banner, then it is a scenario for which every one of us should strive for. However, according to skeptics, this concept of Free Trade is nothing but a mirage. The observed reality is that the World Trade Organization (WTO) which is the international flag bearer of free trade has so far not been successful in bringing about trade liberalization around the globe. There is a perception that the WTO seems to be biased toward * Debt Office, Ministry of Finance Government of Pakistan, Islamabad. ** Debt Office, Ministry of Finance, Government of Pakistan, Islamabad.
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11. All references used in the text
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