Free Trade needs to go Digital |
Free Trade Agreements (FTAs) are considered important instruments for any economy to enhance exports through bilateral market access and tariff reduction. Pakistan has executed a number of FTAs with countries like Indonesia, China, Turkiye, Malaysia, Sri Lanka etc. However, holistically, they have not had an overall positive impact on our economy as we face trade deficits in nearly all of our existing FTAs.
On the contrary, Vietnam demonstrates how a developing economy can employ free trade agreements as part of a coherent export-led industrial policy. Vietnam has concluded 17 bilateral and plurilateral FTAs, including the CPTPP, RCEP, EU-Vietnam FTA and UK-Vietnam FTA. According to the OECD, these agreements connect Vietnam with 53 countries representing approximately 87% of global GDP, cover nearly 70% of its exports and have helped reduce its average applied tariff on manufactured goods from 16.6% to 1.1%.
The EU-Vietnam FTA, which entered into force on 1st August 2020, provides for the eventual elimination of 99% of tariffs. By 2025, Vietnam had become the EU’s largest goods-trading partner in ASEAN, with bilateral trade reaching approximately €76 billion. Vietnam’s merchandise exports also increased by 17% in 2025 to approximately US$475 billion.
Pakistan, meanwhile, remains dependent upon a relatively narrow collection of bilateral FTAs and preferential arrangements, while its exports stood at only slightly above 10% of GDP in 2024. Vietnam’s experience shows that carefully selected FTAs – when supported by industrial capacity,........