Free trade is a great idea until it starts affecting your livelihood- then maybe it's not such a great idea. The problem is not school of thought. Economics sometimes makes too many assumptions (or too many wrong assumptions) and often overlooks ground realities which can then only be analyzed retrospectively. That's where the Pakistan China FTA failed. Traders and the business community have reported instances of dramatic losses, cut-backs in production and massive layoffs as a direct result of the FTA that was implemented in 2007 and ended its first liberalization phase in 2012.

Are those assertions exaggerated or is there some truth in it? The government probably realizes that an answer to that is necessary since the FTA will soon enter a second phase.

The question though is whether the existing framework is good enough to be built on or it needs a complete overhaul. That is also- though no one would say it in so many words- the primary bone of contention between the business community and the government.

In an event co-organized by the Pakistan Business Council (PBC), the Ministry of Commerce discussed the findings of a study they conducted with the help of World Bank on the impact of the FTA where the study finds, much to the chagrin of the business community, that the impact of overall FTA was 'modest'; that it was 'well-targeted' as tariff concessions to China were higher on inputs than on value-added products as a result of which imports from Chinese inputs and raw material may have contributed to Pakistan's value-added exports.