Trade of Pakistan

8/8/2019 Trade of Pakistan

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Characteristics ofCharacteristics of Foreign TradeForeign Trade

Of PakistanOf PakistanExport of raw material and semi finished goodsExport of raw material and semi finished goodsDependence of few commoditiesDependence of few commodities

Import of machinery, industrial raw material, electrical goodsImport of machinery, industrial raw material, electrical goods

Imports of agriculture products and other food itemsImports of agriculture products and other food items

Increased used of petroleum productsIncreased used of petroleum productsImport of services and other invisible expendituresImport of services and other invisible expenditures

Limited trade relationsLimited trade relations

International trade by private sectorInternational trade by private sector

Unfavorable balance of paymentsUnfavorable balance of paymentsUnfavorable balance of tradeUnfavorable balance of trade

Unfavorable terms of tradeUnfavorable terms of trade


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Major exports and Imports of PakistanMajor exports and Imports of Pakistan

ExportsExports ImportsImportsRaw cottonRaw cotton Machinery Machinery

Textile products and cottonTextile products and cottonyarnyarn

PetroleumPetroleum

RiceRice ChemicalsChemicals

Leather and leather productsLeather and leather products Vehicles and spare partsVehicles and spare parts

Carpets and rugsCarpets and rugs Edible oilEdible oil

Synthetic textileSynthetic textile WheatWheatSurgical instrumentsSurgical instruments TeaTea

Sports goodsSports goods FertilizersFertilizers


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Exports ImportsExports Imports

Readymade garmentsReadymade garments Plastic materialPlastic material

Vegetable ,fruit and fishVegetable ,fruit and fish Paper boardPaper board

TentsTents Iron ore and steelIron ore and steel

Engineering goodsEngineering goods CoalCoal

Chemical and PharmaceuticalChemical and Pharmaceutical

productsproducts

Pharmaceutical productsPharmaceutical products


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Trends in ImportsTrends in Imports

Imports are targeted to increase by 4.8% to $12.8 billion in fiscalImports are targeted to increase by 4.8% to $12.8 billion in fiscalyear 2003year 2003--0404

Net increase of $580 million over last yearsNet increase of $580 million over last years

During JulyDuring July--April,2003April,2003--04 this figure grew by 19.0% and stood04 this figure grew by 19.0% and stoodat $12012.4 million as against $10097.8 millionat $12012.4 million as against $10097.8 million

Food group components, which accounts for 7.2% totalFood group components, which accounts for 7.2% total

imports ,grew by 4.5%imports ,grew by 4.5%

Combined increases of $78.8 million in palm oil and tea forCombined increases of $78.8 million in palm oil and tea fordomestic consumptiondomestic consumption


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Direction of ImportsDirection of Imports

Pakistan's major imports come from select few countries USA, Japan,Pakistan's major imports come from select few countries USA, Japan,Kuwait, Saudi Arabia, Germany ,UK and MalaysiaKuwait, Saudi Arabia, Germany ,UK and Malaysia

Causes of Adverse Balance of PaymentsCauses of Adverse Balance of Payments

1.1. Decrease in exportsDecrease in exports

2.2. Increase in importsIncrease in imports

3.3. Lack of modernization of export oriented industriesLack of modernization of export oriented industries

4.4. Import restrictions by developed countriesImport restrictions by developed countries

5.5. Invisible expenditures (foreign exchange liability)Invisible expenditures (foreign exchange liability)

6.6. Unfavorable terms of tradeUnfavorable terms of trade7.7. Devaluation of currencyDevaluation of currency

8.8. Fall in workers remittances/ foreign remittancesFall in workers remittances/ foreign remittances


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Increase in importsIncrease in imports

Pakistans imports on account of machinery, industrialPakistans imports on account of machinery, industrialraw material pharmaceuticals, vehicles, electronicraw material pharmaceuticals, vehicles, electronicgoods, spare parts are persistently increasinggoods, spare parts are persistently increasing

Due to rapid increase in the population the demandDue to rapid increase in the population the demandfor food grains is also increasing and due to the hardfor food grains is also increasing and due to the hardluck of ours we have to import, wheat ,edible oil, tealuck of ours we have to import, wheat ,edible oil, teaspices, and even sugar.spices, and even sugar.

More over increased domestic demand and price rise ofMore over increased domestic demand and price rise ofpetroleum is a great headache and pressure on foreignpetroleum is a great headache and pressure on foreignexchange resources of Pakistanexchange resources of Pakistan


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Increase in invisible expenditureIncrease in invisible expenditure

Expenditures such as expenses on embassies, foreignExpenditures such as expenses on embassies, foreigneducation,education,

Increasing number of pilgrims for Haj/ Umra andIncreasing number of pilgrims for Haj/ Umra and

other holy placesother holy places

Interest and service charges of foreign banks, insuranceInterest and service charges of foreign banks, insurancecompaniescompanies

Increase freight charges of shipping companies etc. areIncrease freight charges of shipping companies etc. areincreasing the foreign exchange liability of Pakistan.increasing the foreign exchange liability of Pakistan.


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Unfavorable terms of tradeUnfavorable terms of trade

PricePrice ofof exportexport goodsgoods ofof PakistanPakistan areare decreasingdecreasing wherewhereasas pricesprices ofof importimport goodsgoods areare increasingincreasing continuouslycontinuously inin

thethe internationalinternational market,market, whichwhich meansmeans thatthat termsterms ofoftradetrade areare goinggoing againstagainst PakistanPakistan

PakistanPakistan hashas toto exportexport moremore goodsgoods forfor thethe importimport ofofthethe samesame quantityquantity ofof goodsgoods


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Devaluation of currencyDevaluation of currency

Pakistan has devaluated its currency many times,Pakistan has devaluated its currency many times,

which resulted in the increase in of import billwhich resulted in the increase in of import bill(expense of foreign exchange) whereas our(expense of foreign exchange) whereas ourexport bill ( earnings of foreign exchange) couldexport bill ( earnings of foreign exchange) could

not increase. Thus devaluation has badlynot increase. Thus devaluation has badly

affected the balance of payments of the countryaffected the balance of payments of the country


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Fall in workers remittancesFall in workers remittances

Last many years workers remittances fromLast many years workers remittances fromforeign countries are decreasingforeign countries are decreasing

Due to the fact that construction programsDue to the fact that construction programshave reduced in Middle East countrieshave reduced in Middle East countries

These countries are experiencing slump in oilThese countries are experiencing slump in oilpricesprices

Comparatively very cheap labor is available toComparatively very cheap labor is available toMiddle East countries from India, Bangladesh,Middle East countries from India, Bangladesh,SriSri--Lanka and PhilippinesLanka and Philippines


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Measures for improvement in BOPMeasures for improvement in BOP

Increase in exports by providing different incentivesIncrease in exports by providing different incentives

Decrease in imports by setting up key industriesDecrease in imports by setting up key industries

Increase in invisible earningsIncrease in invisible earnings

Search of a new marketsSearch of a new markets

Quality and packaging of international standardQuality and packaging of international standard

Revival and restoration of sick industriesRevival and restoration of sick industries

Foreign in joint venturesForeign in joint ventures

Promotion of labor intensive industriesPromotion of labor intensive industries


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Increase in ExportsIncrease in Exports

1.1. DecreaseDecrease thethe costcost ofof production,production, forfor whichwhich raterate ofofinterestinterest forfor settingsetting upup industriesindustries shouldshould bebe reducedreduced

2.2. CostCost ofof transporttransport particularlyparticularly railwayrailway freightfreight shouldshould

bebe minimizedminimized

3.3. CustomsCustoms dutiesduties onon thethe exportexport-- orientedoriented industriesindustriesshouldshould bebe reducedreduced

4.4. ModernModern techniquestechniques ofof productionproduction shouldshould bebe appliedapplied5.5. InsteadInstead ofof exportingexporting rawraw material,material, valuevalue addedadded goodsgoods

shouldshould bebe producedproduced andand exportedexported


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66 ThoseThose industriesindustries shouldshould bebe encouragedencouraged andand setset upupwhichwhich useuse locallylocally producedproduced rawraw materialmaterial ..

77 TheThe laborlabor productivityproductivity shouldshould bebe enhancedenhanced bybyimpartingimparting educationeducation ,, trainingtraining andand providingproviding differentdifferenttypestypes ofof facilitiesfacilities ofof lifelife

88 GoodsGoods ofof differentdifferent varietiesvarieties keepingkeeping inin viewview thethe

demanddemand andand requirementrequirement ofof foreignersforeigners shouldshould bebedeveloped,developed, producedproduced andand exportedexported


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Decrease in ImportsDecrease in Imports Import substitution industries should be set upImport substitution industries should be set up For the production of edible oils, seeds should beFor the production of edible oils, seeds should be

grown locallygrown locally

Tea consumption should be discouragedTea consumption should be discouraged Production of food grains such as wheat should beProduction of food grains such as wheat should be

increasedincreased

Import of luxurious items should be banned or heavyImport of luxurious items should be banned or heavy

taxedtaxed Basic and key industries should be developed which canBasic and key industries should be developed which can

produce machinery and spare parts for manufacturingproduce machinery and spare parts for manufacturingindustries.industries.


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Foreign countries visits by the general publicForeign countries visits by the general publicshould be discouraged in order to save theshould be discouraged in order to save the

precious foreign exchange of the country .precious foreign exchange of the country .

The efficiency of trade attaches of PakistanThe efficiency of trade attaches of Pakistan

Embassies should be improved . It is their dutyEmbassies should be improved . It is their dutyto do their best for developing markets ofto do their best for developing markets of

Pakistani products in the countries they arePakistani products in the countries they areposted .posted .


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Search of NewMarketsSearch of NewMarkets

Governments officials and business community shouldGovernments officials and business community shouldparticipate in trade fairs arranged by foreign countriesparticipate in trade fairs arranged by foreign countries

Trade agreements with different countries should be made.Trade agreements with different countries should be made.

Seminars and trade Exhibitions should be arranged with in theSeminars and trade Exhibitions should be arranged with in thecountry in which foreign delegates should be invited tocountry in which foreign delegates should be invited toparticipate .participate .

Booklets, brochures , pamphlets about the Pakistani productsBooklets, brochures , pamphlets about the Pakistani productsand economy of Pakistan should be distributed to foreignand economy of Pakistan should be distributed to foreign

business community.business community.

Research for Marketing should be conducted.Research for Marketing should be conducted.


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Quality and Packaging of International standardQuality and Packaging of International standard

Revival and restoration of sick industriesRevival and restoration of sick industries

Foreign joint venturesForeign joint ventures

Promotion of labor intensive industriesPromotion of labor intensive industries


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World Trade OrganizationWorld Trade Organization

It was established on January 1,1995It was established on January 1,1995

Represents the most powerful of all theRepresents the most powerful of all themultilateral institutions that are responsible formultilateral institutions that are responsible for

the global economic managementthe global economic management

145 countries are its members145 countries are its members


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The preamble ofWTOThe preamble ofWTO

Raising standards of living, ensuring full employmentRaising standards of living, ensuring full employmentand steadily growing volume of real income andand steadily growing volume of real income andeffective demand and expending the productions ofeffective demand and expending the productions of

and trade in goods and services .and trade in goods and services .

There is need for positive efforts designed to ensureThere is need for positive efforts designed to ensurethat developing countries secure a share in the growththat developing countries secure a share in the growth

in international trade commensurate with the needs ofin international trade commensurate with the needs oftheir economic developmenttheir economic development


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Basic PrinciplesBasic Principles

NonNon-- discrimination between countiesdiscrimination between counties Free trade , gradually through negotiationsFree trade , gradually through negotiations

Predictability through bindsPredictability through binds

Promoting competition .Promoting competition .


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WTO Does Not RequireWTO Does Not Require

Does not prevent member states fromDoes not prevent member states fromestablishing their own trade and nonestablishing their own trade and non--tradetradepolicy objective spolicy objective s

Does not require them to eliminate all barriersDoes not require them to eliminate all barriersto import of goods and servicesto import of goods and services

Does not direct national administrative andDoes not direct national administrative and

procedural systemprocedural system Does not require member states to have aDoes not require member states to have a

uniform set of trade regulationsuniform set of trade regulations

Documents

Trade of Pakistan