Munich Personal RePEc Archive

Lessons Drawn From Pakistan-Sri Lanka FTA

Ahmed, Saira and Ahmed, Zafar and Sohail, Safder and Sarfraz, Irfan and Shafqat, Mohammad and Mamoon, Dawood and Saadia, Hissam (2012): Lessons Drawn From Pakistan-Sri Lanka FTA.

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Abstract

There has been an increase in bilateral trade between Sri Lanka and Pakistan in the post – FTA milieu. Today Pakistan is the second largest trading partner of Sri Lanka amongst South Asian economies. There have been some concerns about the negative trade balance for Sri Lanka however the lower prices have resulted in an increase in welfare for both countries. The negative trade balance for Sri Lanka can also be justified on the account that a significant proportion of Sri Lankan imports from Pakistan constitute raw material and related intermediate inputs that in turn lead to efficiency gains. Most noticeable are the over 30 percent imports from Pakistan, currently being used as raw material in Sri Lankan apparel sector. This industry making use of cheaper imports from Pakistan, in turn exports apparel to destinations that include US and EU.

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