Trade Agreements: Negotiating a win-win!

Published in: April 2021

In their pursuit for enhancing trade, countries often negotiate trade agreements with partnering nations to reduce or eliminate restrictions such as tariffs, quotas, and taxes. Pakistan has entered into several trade agreements with different countries including Free Trade Agreements (FTAs) with China, Malaysia, and Sri Lanka, Preferential Trade Agreements (PTAs) with Iran, Indonesia, Mauritius, as well as a Transit Trade Agreement with Afghanistan. However, even though bilateral trade with China and Malaysia increased after the implementation of respective FTAs, Pakistan’s imports grew more rapidly in absolute terms than exports to these partners, resulting in a rapid widening of the trade deficit.