https://www.geo.tv/latest/158202-eighth-china-pakistan-free-trade-agreement-conference-commences-in-beijing
China-Pakistan Free Trade Agreement
The main principle in chapter 1 and 2 of International trade is revolved around two countries trading with each other. The short article doesn’t give many details about the negotiation between China and Pakistan free trade agreement other than the fact that “the current volume of trade between Pakistan and China of $16 billion (U.S) is a testimony to the ever-growing economic co-operation”. What we can assume however is that with a free trade agreement between the two would mean that they will be exporting and importing more to each other. “Pakistan’s key exports to China where raw materials and intermediate products, such as cotton yarn, woven fabric, gray fabric etc” (Khan).
Both these countries will be better off considering there trading will improve expecting a growth in there already growing economies. On the other hand, we don’t know exactly what that will mean for the rest of the world in terms of the world trade. We know that China accounts for a large portion of the world's trade. What I can theorize is that this could make the market more competitive in terms of cost to produce the goods would be cheaper optimally make everyone competing to have the best price. This could be perceived good or bad depending on the country. What I can say for certain is that negation will improve for both China and Pakistan in terms of their trading power.
Khan, Mubarak Zeb. “Pakistan seeks changes in free trade agreement with China.” DAWN.COM, 9 Sept. 2017, www.dawn.com/news/1356432. Accessed 15 Sept. 2017.
I very interesting prospect you have mentioned in this blog. Pakistan and China are 2 of the main powers in south east Asia and to be more realistic they are more than true friends for a very long time now. trade agreement is a formality but in real both nations has been using each other help in many sectors which is for power balancing the region. Pakistan is a developing country and China is a next super power and with things going in very good direction, they both will be holding major hold at the region. India and Russia have also very good relations so to balance this China need to step up Pakistan and that is the reason China making such agreements.
ReplyDeleteWith free trade between China and Pakistan, it would make both raw and finished materials cheaper. This will create cheaper products for China and Pakistan and both will profit more from trading with each other. On the other hand if China and Pakistan experience export biased growth their TOT could fall, because their export prices would drop. So the free trade agreement will benefit both countries but could still have some kickback.
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