assignment of global business management

7/30/2019 Assignment of Global Business Management

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Assignment of Global Business Management

Submitted to:

Mr. Farhan Ahmad

Submitted by:

M Furqan Ali

BBA-FA09-089-12C

Date: 31-05-2012

COMSATS institute of information & technology

Lahore


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Government influence in international trade in Pakistan

Every country government focuses on making such trade policies that enhancethe political, social and economic environment. The survival and performance of

companies depend upon the governmental trade policies. In order to promote

some industry; Pakistan government tries to stop the entry of imports and

focuses more on exports.

Governmental intervention in Pakistan of trade is to promote exports are because

of following reasons:

To reduce poverty level

To reduce unemployment level

To focus on development

To increase exports in textile sector, this ultimately leads to modernization

of technology and investment.

To execute good relations with countries where they signed free trade

agreements like china, Malaysia and Srilanka.

Export policy give new platform of development domestic companies of

Pakistan

Pakistan government intervenes in the following sectors for the formation of

trade policies:

Automobile sectors:

Car imports in Pakistan can only be carried out through one of the following ways:

Transfer of Residence: Overseas Pakistanis coming back can bring a car with

them only if they have stayed there for at least 2 years.

Gift Scheme: Overseas Pakistanis (living abroad for at least 2 years) can gift a

car to their blood relative.

There are no tax exemptions for either of those and only 5 year old cars can be

imported. Pakistan has more liberal import policy for the used cars in the region as

compared with India and Thailand that impose high tariff plus non-tariff barriers,


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resulting in insignificant imports in comparison with Pakistan where used cars import is

high.

For many previous years government of Pakistan give support to the car industry by

imposing import restriction on cars. But due to formation of monopoly of local car

manufacturers and imperfection of market, government take steps to allow free importsof reconditioned cars, motorcycles, trucks, and tractors. According trade policy 2011-

2012 prime minister of Pakistan ask to remove restriction of transfer of residence,

personnel baggage and gift because of the following reasons:

The prices of local car increases day by day and it is not in the reach of citizens

of Pakistan.

Another reason for import; is there is no proper network of public transportation.

Thats why Pakistan removes trade barriers on import of vehicles in order to fulfill

transportation need of citizens who can purchase the cars at low prices than the

prices of local manufacturers. Other reasons are local manufacturer failed to introduce any high tech production

in the country for 25 years, local manufacturers also fail in making the parts itself

and also in making network of taking raw materials from local markets.

Textile sector:

Textile sector in Pakistan is most important sector because its counts for 70% of

export. Government has more focus on protectionist policies and exports of

textile products. According to five year textile policy of government focus on

giving subsidy of Rs 87 billion cash to the textile and clothing, which ultimately

boost up the exports and also promote the textile industry in Pakistan. Five year

textile policy focuses on to enhance the domestic capabilities and capacities for

efficient use of resources with the help of proper infrastructure, up gradation of

technology and skills development. Basically government wants to discourage the

import of textile products, for that purpose government charge import quotas

and tariffs and remove export tariff for promotion of exports.


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Agriculture industry:

Agriculture is one of the most important Pakistan industries. Government intervenes in

this industry because of these reasons:

support agriculture sector

ensure food security

maintain balance of trade

In order to support the agri sector, Pakistan government increases the import tariff and

uses quantities restriction, so that local production increases and local consumer will

trust on domestic companies.

Pharmaceutical industry:

Government of Pakistan influences the pharmaceutical industry regarding the trade

policies. Trade policies focus on expansion of exports.

Following are the objective of trade policy:

Increasing Pakistan share in the international markets

Meeting obligation of WTO

Diversifying the exports

Government in order protects the pharmaceutical industry, focus on followingprocedures;

Impose regulatory duty on imports

Anti-dumping to protect local industry of medicine

Chemical industry:

The ratio of chemical goods exported is between 7-8% and its import ratio is 40%

of total imports. Its mean government focus little on protection of high tech

industry that is mostly dominated by foreigner players. Pakistan governmentinfluence on supporting the chemical industry is less.

From the very start of cement industry in Pakistan, government doesnt much focuses

on this high tech sector and allows the import of cement thats why it depend largely on

imports.

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