Pakistan-china free trade agreement: An initial assessment of expected Implications on major export items of Pakistan

In the recent past it has been observed that the economic ties in shape of trade agreements have been strengthened among various countries and regions in the world. According to Khor (2005)1 the "bilateral free trade agreements (FTAs) are made between two countries" and"throughout the world, many governments have signed, are negotiating, or contemplating new bilateral free trade and investment agreements". In the FTA the trading partners compromise for the rates even lower than the World Trade Organization (WTO) (ibid). In other words the FTAs are aimed to lower tariffs to zero level, sometime with few exceptions for certain products or sectors. Usually it is believed that the free trade agreements bring prosperity and welfare, but it may not be true in all cases and there may be some negative impacts of FTAs against the claimed benefits.