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NWHO is Officially Accredited by the UN General Assembly
Economics of Free Trade Agreements, Trade Partnerships, and Economic Growth: A Case Study of Pakistan's International Trade and Resilience Strategies
Introduction
Pakistan’s international trade has a critical influence on its economic growth, yet it faces significant challenges in leveraging its trade agreements. The country's trade deficits, export reliance on a few primary goods, and limited diversification have hindered sustainable economic development. Despite engaging in numerous Free Trade Agreements (FTAs) with key partners like the U.S., the European Union (EU), and China, Pakistan has not fully capitalized on these opportunities. This research uses a gravity model to explore the impact of FTAs on trade volumes and uncovers the infrastructural and policy shortcomings that prevent Pakistan from reaching its export potential. By examining the country’s trading patterns, the study aims to provide insights for more effective trade strategies, emphasizing the need for diversification, strategic market entry, and improvement in trade infrastructure to promote sustainable economic growth.
Aim
This study aims to assess the effectiveness of Pakistan's FTAs and develop strategies to enhance its trade volume by addressing infrastructural weaknesses and improving market diversification.
This study aims to assess the effectiveness of Pakistan's FTAs and develop strategies to enhance its trade volume by addressing infrastructural weaknesses and improving market diversification.
Findings
The findings indicate that Pakistan has not fully utilized its FTAs to enhance trade volumes with its primary trading partners, despite having substantial trade potential. The gravity model results show that geographic distance and Free Trade Agreements (FTAs) positively influence trade volume, while disparities in land endowments negatively affect trade. The analysis reveals that although FTAs between Pakistan and its partners, such as the U.S., EU, and China, have contributed to increased trade volumes, the country’s weak infrastructure, limited product diversification, and lack of technological advancement impede further growth. Diversifying exports, improving infrastructure, and strategically implementing FTAs are essential for Pakistan to maximize its trade potential and achieve sustainable economic growth. These insights provide actionable recommendations for policymakers to refine their trade policies and foster stronger economic stability.
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