Trade Liberalization In Pakistan Case Study

3281 Words 14 Pages
Register to read the introduction… Pakistan’s international trading policy consisted of ensuring a highly protective trade regime until the late 1980s. Tariff rates were excessively high and non-tariff barriers kept competing imports away from the domestic markets. It was only in the 1990s that trade liberalization policies were initiated.

During the period of protection the manufacturing and tax revenues grew by less than 5% annually. Once the tariff reforms were adopted manufacturing, revenues and exports have all grown in double digits. This correlation shows that despite the perceived views that protectionism protected the domestic, once policies that promoted trade openness were in place, exports within Pakistan actually increased, due to the comparative advantages they would have held in certain industries.

Per Capita GDP Growth Rates, by Country Type, 1990s (%), based on GDP in purchasing power parity terms) Per Capita GDP Growth Rates, by Country Type, 1990s (%), based on GDP in purchasing power parity
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Arguments about comparative advantage and gains from trade are more plausible when real world conditions approximate those of the theoretical models used to justify them, namely, equilibrium at full employment. Yet, it was during the extremely turbulent and depression-like conditions of the mid-to-late 1980s and early 1990s that most of the Latin American countries and transition economies of Central and Eastern Europe initiated their trade liberalization …show more content…
However as established in this paper, there are various factors in which can affect the effectiveness of trade liberalisation policies, which policy makers must take into consideration.


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