What is it about?
In this study, the impact of the China–Pakistan Free Trade Agreement (CPFTA) on the trade of agricultural products is explored by using the gravity model. Two Panel data sets, one for agricultural exports of China and one for agricultural exports of Pakistan were used. This contains data for agricultural exports and other macro-economic factors of China and Pakistan with 110 partner countries from 2001 to 2014. The Poisson Pseudo Maximum-Likelihood (PPML) technique of the gravity model was employed to analyze this data.
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Why is it important?
This study contributes to the literature by determining the potential effects of the CPFTA on agricultural trade. Policy makers will find the results of this study useful because they point out the impact of a bilateral trade agreement on trade of agricultural products.
Perspectives
I believe this article fulfills a gap in the literature of trade while using a gravity model to measure the trade potential between different nations. As both, Pakistan and China signed a free trade agreement to enhance the trade potential and help them to reduce there cost in the field of there relevant expertise. Agriculture is a major field of discussion in this draft and we are able to find that, CPFTA had a strong trade creation effect on agricultural exports of Pakistan. It helped provide an exponential increase in the agricultural exports of Pakistan to China. However, CPFTA was not found very effective for Chinese agricultural exports to Pakistan. This study contributes to the literature by determining the potential effects of the CPFTA on agricultural trade.
Mr Muhammad Usman Riaz
Harbin University of Science and Technology
Read the Original
This page is a summary of: Exploring the Gravity of Agricultural Trade in China–Pakistan Free Trade Agreement, Chinese Economy, November 2018, Taylor & Francis,
DOI: 10.1080/10971475.2018.1481008.
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