Trade In Pakistan Essay

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Introduction If we consider the face value only, Pakistan has come a long way from $2.2 billion worth of trade in 1970 to $57 billion in 2010-a 25 times increase. But if we compare it with its competitors and peers in the region like India and Bangladesh we find Pakistan to be seriously outperformed. Trade in these countries increased 175 and 45 times respectively during this time period. Most economies which have experienced export-led growth like Singapore and Taiwan have trade figures exceeding 100%. Pakistan’s trade performance remains dismal and unrelated to its economic growth due to several reasons such as large proportion of imports, limited diversification and low competitiveness and value addition. The country has also attempted to liberalize its trade regime over the years reducing the tariff barriers and replacing the NTB’s with tariff protection, in order to contain the anti-export bias. The following paper discusses the countries trade performance in the last four decades (1971-2010) focusing on the export and import growth trends and the trade policies implemented this period. Next, there is a discussion on the change in structure of the exports and imports over this time and global competitiveness of Pakistan’s exports. After the War-1970’s In 1971, the most populous province of Pakistan seceded from the country to become an independent country and this separation had a significant impact on the country’s economy. This is because prior to 1971 war the bulk of trade of Pakistan was carried out between East and West Pakistan. West Pakistan’s exports to East Pakistan consisted of 52% of manufactured and 48% of primary commodities whereas East Pakistan’s exports to West Pakistan consisted of 80% of manufactured good... ... middle of paper ... ... as ways to improve competitiveness. Improving trade links with India and entering into more comprehensive regional preferential trade agreements is one approach being taken by the present government to improve the trade performance. According to Dr. Ishrat Husain’s article in Dawn, studies have established that “present volume of $2.6 billion trade between Indian and Pakistan can be multiplied to $10bn by normalizing trade relations…….Most of the trade taking place through Dubai will also be diverted through official channels earning tax revenue”. The countries across South Asia-India, Bangladesh and Sri Lanka are moving towards greater economic cooperation as they make bilateral trade agreements and further open their economies. This might be a good chance for Pakistan to improve its global competitiveness by increasing its share of exports in the world market.

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