Strengthening Pakistan’s Trade Linkages: A Case Study of Regional Comprehensive Economic Partnership (RCEP)

Adnan Akram, Ejaz Ghani, Musleh Ud Din


This paper explores Pakistan’s trade potential because of
Pakistan’s possible inclusion in the proposed Regional Comprehensive
Economic Partnership (RCEP). Using a variety of analytical tools
including the trade-cost augmented gravity model, indices of trade
complementarity and revealed comparative advantage, the paper
demonstrates that FTA between Pakistan and the proposed RCEP will
increase bilateral trade, on average, by a factor of 1.84. Trade
complementarity indices reveal that Pakistan’s import pattern tends to
match over time with the export pattern of RCEP countries indicating
that Pakistan can benefit from sourcing its imports from the RCEP
countries. Moreover, there exists significant potential for Pakistan’s
trade expansion with ASEAN members as well as other potential trading
partners in RCEP. Whereas Pakistan can export cotton, made-up textiles
and clothing, fish, cereals, leather products, pharmaceutical products,
sugar and sugar confectionary, and light engineering manufactures, the
proposed RCEP countries can export basic raw materials, machinery and
equipment, steel products, and miscellaneous manufactured goods, to
Pakistan. The study recommends that Pakistan should pursue its FTA
arrangements actively with the ASEAN, as it is a prerequisite to get
membership in the proposed RCEP. Greater integration with the proposed
RCEP region will help Pakistan boost trade and investment and promote
sustainable growth.

Full Text:




  • There are currently no refbacks.