world trade organization; term paper

32
1. Introduction International body that promotes and enforces the provisions of trade laws and regulations. The WTO has the authority to administer and police new and exiting free trade agreements to oversee world trade practices, and to settle trade disputes among member states. The WTO was established in 1994 .The WTO began operation on January 1,1995. The WTO is based in Geneva, Switzerland. Critics charge that WTO trade rules do not sufficiently protect workers’ rights, the environment, or the human health. In the last fifty years, great progress has been made in integrating developing countries into the multilateral trading system and in their participation in the WTO. But the progress has been uneven, with some developing countries still only marginally integrated in the global economy. The pace and scope of liberalization has varied among developing countries, all have participated in the process. In goods sector all developing countries have conducted programmes of tariff reform and reduction. Many have also reduced export taxation and subsidies. In services, developing countries have made significant steps in 1

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Page 1: world trade organization; term paper

1. Introduction

International body that promotes and enforces the provisions of

trade laws and regulations. The WTO has the authority to administer

and police new and exiting free trade agreements to oversee world

trade practices, and to settle trade disputes among member states.

The WTO was established in 1994 .The WTO began operation on

January 1,1995. The WTO is based in Geneva, Switzerland.

Critics charge that WTO trade rules do not sufficiently protect

workers’ rights, the environment, or the human health.

In the last fifty years, great progress has been made in

integrating developing countries into the multilateral trading system

and in their participation in the WTO. But the progress has been

uneven, with some developing countries still only marginally integrated

in the global economy.

The pace and scope of liberalization has varied among

developing countries, all have participated in the process.

In goods sector all developing countries have conducted

programmes of tariff reform and reduction. Many have also reduced

export taxation and subsidies. In services, developing countries have

made significant steps in autonomous liberalization and bound many

sectors, modes of delivery and investment regimes.

These important developments in trade policies have been

complemented by liberalization of exchange controls and restrictions

on current account.

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This paper reviews how the development dimension has been

addressed for developing countries in the the WTO and to check if the

implementation of free trade is beneficial for developing countries or

not.

1.1 Statement of the Problem

“Developing countries vs WTO”

WTO members are distinctly divided into two categories:

Developing countries

Developed countries

Most of the articles and agreements of WTO are favoring

developed countries. The rule and law makers of WTO are developed

countries and they are the significant fund provider to WTO. They use

their authority to shape WTO’s laws and regulations according to their

own needs. But there is no one who listens to the problems of the

developing countries, economic interests of developing countries are

not secured by WTO. Therefore the gap between the developed and

under developed countries is widening.

1.2 Objectives of the Study

To check the benefits of free trade for developing

countries.

To determine the factors creating hurdles for developing

countries under WTO.

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The scale at which developing countries adopt free trade

liberalization.

These factors would be discussed with the following

variables:

GDP

External Debt

Trade balance

1.3 Methodology

To conduct this study we first gathered data from different

sources. Main sources of data are:

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Economic Survey of Pakistan

PDR

The Economist

International Statistical Review

1.4 Organization of Data

First provided introduction of WTO then statement of the

problem is provide then objectives of the study i.e., Developing

Countries vs. WTO. Then we reviewed the different research article by

different economies of the world and summarized these articles. Then

we sorted out different finds from the tables provided in this whole

literature considering different variables such as GDP, Trade Balance,

External Debt etc. In the end different suggestions are recommended

for developing countries to achieve economic progress.

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2. Review of literature

Greider (December 1999) says that WTO lack authority to control

the trading issues of world. The countries which sponsor the WTO to

run its issues are not allowing WTO to take such steps which are

against them and are in favor of developing countries. WTO must also

use its authority to remove child labor, improvement in working

conditions of laborers in member countries. If the governments of

countries will check these issues then this thing is against WTO

agreement.

Elizabeth Becker (August, 2002) in this article discusses about

the harmful effect on the developing countries of the farm subsidies

America is providing. The 2/3rd of the population of the developing

countries live on farms and America subsidies on farm production in

their sector are becoming very harmful for developing countries.

Tutwiler (June, 2005) explains that trade relates to growth and

that economic growth is essential to end poverty in developing

countries. He explains that agriculture growth, rural development, and

poverty alleviation can be done with free trade within fellow

developing countries.

Vogel (2005) says that WTO has the power to check new and

exiting free trade agreements and it has the authority to settle any

trade dispute among the member countries. WTO is formally

structuralized and has its own law. Some people criticize WTO because

its rule does not provide protection to the rights of workers. WTO is

also criticized because; the press is not allowed to know about WTO

decisions on the trade disputes.

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Vogle says (2006) that the constitution of WTO protects the

property rights but does not protect the rights of workers and

environmental concerns are becoming the cause of criticism. If reforms

are not made in WTO, then WTO will collapse. Human rights and

environmental concerns are not protected by WTO, so there will be

many challenges because the companies to get success use child

labor, prison labor etc. These issues are the direct challenges for the

authority of WTO.

Dr. Abdul Sapoor (November 2006) says that countries which

want to get the benefit of free trade and want to transfer these

benefits to the poor people of that country should take some

complementary steps in education, transportation, and health facilities.

China and Indonesia have invested in roads and agriculture facilities

which have helped them to reduce poverty. Bangladesh has improved

the female employment rate by giving them loans and producing their

products at home and then exporting their products.

Zaidi (2006) says that one of the main objectives of WTO is to

safe guard the share of developing countries especially of least

developing countries in global trade so that their needs for economic

development can be fulfilled. Some of the developing countries like

China, India, Malaysia, Brazil, Korea has got benefits from liberalization

of trade. Due to factors such as high technology and large scale

economies.

Greider, in this article discusses that the developing countries

don’t fully trade with each other. Exporters of developing countries are

still having trade with developed countries. The markets of developed

countries provide low profits and there are many restrictions to enter

to these markets. But many developing countries provide different

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attracting investment opportunities for other developing countries.

These developing countries can get benefit by trading with each other.

Paul says that the main responsibility of WTO is to promote free

trade. Agriculture is the main source of economic growth in developing

countries. Developed countries insists developing countries to open up

their agriculture markets and stop providing subsidies on agriculture

products. In textile sector the same attitude is adopted by the

developed countries towards developing countries. Agriculture and

textile are the main sources of foreign trade for developing countries.

Although the developing countries says that they have opened their

markets for free trade but the true picture is that the developed

countries resists to import products from developing countries.

Blusteim explains that the developing countries are not happy

with the pro-industrialized countries policies of free trade. Developing

countries are asked by developed countries to cut down bigger

percentage of tariffs on agriculture products, so that the developed

countries can sell more of their products to the developing countries.

Steven says that WTO has two main purposes to make rules for

world trade and to settle trade disputes between the nations. The

members of WTO consist of industrialized nations as well as developing

countries. The economist who supports WTO says that the WTO is

beneficial for the expansion of trade in the world and it will help to turn

low inflation and it will increase product quality.

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WTO is an organization which drafts trade rules for global trade

and tries to end the disputes among the member countries.

Industrialized/developed countries are not letting the WTO “PRO

POOR”. Some of the WTO policies are against worker rights and

environmental concerns. Some of the developed countries have

received some benefits due to liberalization of trade but most of the

developing countries are not reaping the benefits of economic

progress.

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3. Findings and Analysis of data

Although some policies of WTO (Liberalization of Markets-Free

Trade ) has helped some of the developing countries like China, India,

Korea, Taiwan, Malaysia to boost-up there economies but the most

developed countries like African countries, Pakistan etc. have not

reaped the benefits by the adoption of WTO policies. It is because

when we compare the scale of economy of Pakistan with China we

come to know that the market size, land and the population strength of

China is far greater than of Pakistan. But when we compare Pakistan

with Korea we come to know that the Koreans have much less land and

population than Pakistan but they have developed themselves in high

tech industry.

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TABLE 3.1 GLOBAL TRADE AND DVELOPINF COUNTRIES TRADE

Country

Global Trade Developing Countries Trade

1990 2004 1990 2004

Exports Imports Exports Imports Exports Imports Exports Imports

China 1.77 1.47 6.5 5.9 7.31 6.56 19.75 19.95

Hong Kong 2.35 2.28 2.9 2.9 9.69 10.15 8.84 9.70

Singapore 1.50 1.68 2.0 1.7 6.22 7.48 5.97 5.82

S. Korea 1.86 1.93 2.8 2.4 7.66 8.60 8.45 7.97

Mexico 1.16 1.20 2.1 2.2 4.80 5.36 6.27 7.33

Taiwan 1.91 1.51 2.0 1.8 7.91 6.75 6.03 5.96

Malaysia 0.84 0.81 1.4 1.1 3.47 3.60 4.21 3.74

India 0.51 0.65 0.81 1.0 2.11 2.90 2.41 3.38

Brazil 0.89 0.62 1.1 0.7 3.70 2.77 3.21 2.34

Thailand 0.65 0.91 1.1 1.0 2.71 4.06 3.25 3.39

In 1990, the share of 10 leading developing countries—China,

Hong Kong, South Korea, Taiwan, Singapore, Mexico, Malaysia, India,

Thailand, and Brazil – in global exports and imports was 13.44 and

13.06 % respectively. In 2004, the share of the same 10 countries in

global exports and imports had reached 23% and 20% each.

Minus these 10 economies, the percentage share of developing

countries in global exports and imports in 1990 was 10.77% and 9.49%

respectively. In 2004, that share was 10.75% for exports and 10.43%

for imports. The share of the 10 leading economies in total exports and

imports of developing countries in 1990 was 55% and 58%

respectively. The share has increased to 68% for exports and 69% for

imports in 2004.

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On the other hand, LDC (Least Developed Countries) – the

countries most in need of benefits—accounted for less than 1% of

global exports and imports in 1990 and continued to have that low

share in 2004. In terms of their in developing countries’ trade, the

situation is disappointing as well.

In 1990, LDCs accounted for 2.32% of exports and 3.14% of total

imports. In 2004, their share in exports and imports had fallen to

1.92% and 2.29% respectively.

The top ten exporters in south- south trade in 2003 were: China

(19.7%), Hong Kong (14.2%), South Korea (11.1%), Singapore (9.4%),

Taiwan (9.3%), Malaysia (6%), Thailand (4.1%), India (3.4%), Brazil

(3.3%) and Indonesia (3.1%). These countries together account for

83.5% of exports in south-south trade.

This makes it clear that the capacity to drive benefit from

opportunity thrown up by trade liberalization is dependent on the

supply side and strength of developing countries.

Two types of countries are beneficiaries of trade liberalization.

On the one hand, there are bigger countries like China and India

where firms can realize the economies of scale and thus price-out their

competitors in foreign countries by offering cheaper products.

On the other hand, there are smaller but relatively advanced

developing countries like South Korea and Singapore whose exports

depends on high tech value added products. These countries compete

not only on the basis of price but on the basis of product

differentiation.

It is also marked that while the developed countries insist on

continuation of their past practices, developing countries are being

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forced to open up there markets and also withdraw the subsidies

provided to agriculture. Developed countries provide subsidies to many

sectors, agriculture in particular, which comprises of a small

percentage of population. These groups may be small but enjoy

enormous political clout and are capable of pressuring there

governments to continue subsidy on farm products.

As against this a country like Pakistan has to protect the interest

of millions of people, more than 50% of total population, dependent on

agriculture. Therefore if we apply the policies of WTO at the right

moment it will cost very heavily to the agriculture sector of Pakistan.

The general consensus is that WTO members are distinctly

divided into two categories, developed and developing countries. Most

of the articles and agreements are tilted towards developed countries.

To bring a change or amendment in these articles developing countries

will have to join their hands to reap the real benefits of globalization.

As regards textile quota phase out and its integration in free

trade regime, the experience of developing countries may be

expressed as 'completely disappointing'. Some of the textile products

have been termed 'sensitive' by the developed countries and their

integration is being done at a very slow pace. These products are the

main foreign exchange earners for the developing countries. Despite

the claim by the developed countries that their markets are open, they

resist import of various commodities from the developing countries by

imposing non-tariff barrier Considering the imports and exports of

developing countries, after attempting some polices, 2000 we came to

know that the balance of import and export is mostly negative. So if

these countries implements WTO right now, they will be at a great loss.

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TABLE 3.2 Developing Countries Total External Trade( US MILLION )

Countries 2000 2001 2002 2003 2004

Afghanistan

Import 550 551 950 2101 3401

Export 186 113 101 144 541.8

Balance -368 -438 -849 -1957 -2859.6

Azerbaijan

Import 1172.1 1431.1 1665.5 2626.2 3515.9

Export 1745.2 2314.2 2167.4 2590.4 3615.4

Balance 573.1 883.1 501.9 -35.8 99.5

Iran

Import 15086 18129 22036 28795 31300

Export 28461 23904 28237 33788 38790

Balance 13375 5775 6201 4993 7490

Kazakhstan

Import 5040 6445.6 6584 8408.7 13070

Export 8812.2 8631.5 9670.3 12926.7 18470

Balance 3772.2 2185.9 3086.3 4518 5400

Kyrgyzstan

Import 554.1 467.2 586.7 717.0 941.0

Export 504.5 476.1 485.5 581.7 718.8

Balance -49.6 8.9 -101.2 -136.3 -222.2

Pakistan

Import 10309 10729 10340 12220 15592

Export 8569 9202 9135 11160 12313

Balance -1740 -1527 -1205 -1060 -3279

Tajikistan

Import 675 687.5 720.5 880.8 1375.2

Export 784.3 651.5 736.9 797.2 914.9

Balance 109.3 -36 16.4 -83.6 -460.3

Turkey

Import 54502.8 41339 51533.7 69339.6 97361.5

Export 27774.9 31334.2 36059 47252.8 63074.8

Balance -26727.9 -10064.8 -15474.7 -22086.8 -34286.7

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Countries 2000 2001 2002 2003 2004

Turkmenistan

Import 1785 2349 2119.4 2512 2850

Export 2505.5 2620.2 2855.6 3632 4000

Balance 720.5 271.2 736.2 1120 1150

Uzbekistan

Import 2947.4 3136.9 2712 2964.2 3816

Export 3264.7 3170.4 2988.4 3725 4853

Balance 501.9 -35.8 99.5 760.8 980

World Total

Import 6697000 6452000 6693000 7778000 8619401

Export 6445000 6191000 6455000 7503000 8281385

Balance -252000 -261000 -238000 15281000 16900786

3.1 GDP Growth Rate

After 2000, the GDP growth rate of developing countries is

showing the positive results, the reason for this is completely not due

to WTO implication/liberalization but there are some other factors also

such as external aid etc.

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TABLE 3.3 GDP Growth Rate (%)

Countries 2000 2001 2002 2003 2004

Afghanistan n.a. n.a. n.a. 15.7 8.0

Azerbaijan 11.1 9.9 10.6 11.2 10.2

Iran 5.93 5.38 7.83 8.03 5.6

Kazakhstan 9.8 13.5 9.8 9.2 9.4

Kyrgyzstan 5.4 5.3 0.0 6.7 7.1

Pakistan 3.9 1.8 3.1 6.4 8.4

Tajikistan 8.3 10.2 9.5 10.2 10.6

Turkey 7.4 -7.5 7.9 5.8 8.9

Turkmenistan 18.6 20.4 19.8 17.0 7.0

Uzbekistan 3.8 4.2 4.2 4.2 7.7

World 5.1 2.3 2.8 3.5 5.0

It seems that if the trade is liberalized and there is free trade, the

amount of debt on LDCs will increase.

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TABLE 3.4 Dimensions of the LDC Debt Burden, 1970-2000

(billions of dollars)

Year 1970 1975 1980 1985 1990 1995 2000

Total

External debt

Of which

Africa

68.4

-----

180.0

14.9

635.8

55.6

949.0

64.7

1182.3

283.3

1808.9

304.1

2140.6

285.1

So the liberalization of trade in this field doesn’t favour LCDs

3.2 Current Overview of LDC Economies

According to UN data profile, the current economic condition of

least developed countries is given below:

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TABLE 3.5 Least Developed Countries Economy

Economy 2000 2004 2005

GDP (current US $) 182.1 billion 261.0 billion 298.4 billion

GDP growth (annual %) 4.3 6.2 6.1

Inflation 5.3 5.8 6.5

Agriculture, value added(% of

GDP)33.2 28.4 27.8

Industry, value added (% of

GDP)23.8 26.1 27.3

Services, etc. ,value added(%

of GDP)43.0 45.5 44.6

Exports of goods &

services(% GDP)22.3 22.9 22.1

Imports of goods &

services(% GDP)29.5 31.8 31.5

Gross capital formation (% of

GDP)20.0 21.4 21.6

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TABLE 3.6 Percentage share of developing countries in global trade

Indicators 1990 2000 2003 2004

Exports 24.21 31.97 32.38 33.46

Imports 22.53 28.99 29.27 30.43

The share of developing countries in global exports has gone up

from 24.21% in 1990 to 33.46% in 2004 and their share in imports

increased from 22.52% to 30.43% during this period thus the

developing countries taken as a group have done well in terms of their

share in global trade. But this performance can easily be attributed to

relatively advanced developing countries (Korea, China, Hong Kong,

Singapore, etc).

The evolution of developing countries' share of world trade in

total merchandise and in manufactures and gives a snapshot of their

current position in services trade.

The increase in the share of developing country merchandise

exports accounted for by manufactures, from 7 per cent in 1963 to 65

per cent in 1995 and 1997, reflects a shift in the export structure of

developing countries away from primary products and raw materials.

Again, regional differences are very marked: the share of merchandise

exports from China accounted for by manufactures rose from 25 per

cent to 88 per cent between 1963 and 1995, while the share of

manufactures in African merchandise exports rose from 2 per cent to

28 per cent over the same period

During the period 1970-1997, the openness of all regions to

trade (as measured by the share or merchandise trade in GDP at

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constant prices) has increased considerably. For the world as a whole,

the trade-to-GDP ratio has risen from 13.8 to 26.5 per cent in this

period, with the most rapid increase between 1984-87 (when the ratio

stood at approximately 18 per cent) and 1997. In the same period, the

trade-to-GDP ratio for developing countries rose from 23 to 35 per

cent; most of this increase again took place since the mid-1980s.

Some of developing countries like Brazil, China, India etc. the

percentage growth rate of their capital is very high but for the most of

developing countries it is low.

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TABLE 3.7 Cumulative Percentage Annual Growth Rate (1995-2005)

Population CapitalTotal Factor

Productivity

North America 1.05 3.33 Low

Western

Europe0.10 0.83 High

Australia/New

Zealand0.97 1.84 Low

Japan 0.20 0.37 Low

China 0.83 9.08 Very High

Taiwan 0.73 4.52 Very High

Indonesia 1.31 1.82 Low

India 1.59 8.01 Medium

Other South

Asia2.10 3.39 Medium

Brazil 1.26 -0.69 High

Rest of World 1.65 4.15 Medium

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3.3 Developing Countries' Participation in Trade

and Services

Based on balance-of-payments data, the total value of world

exports of commercial services was estimated at USD 1,310 billion in

1997. The United States and Canada were estimated to account for

approximately one-fifth of this total; Western Europe for 45 per cent;

Latin America for some 4 per cent; Africa for 2.1 per cent and Asia,

other than Japan and Australia, for some 16 per cent. Roughly,

therefore, developing countries accounted for about 21 per cent of

world exports of commercial services.

3.4 Developments since the Establishment of

The WTO

The trend towards fuller participation of the developing countries

in the multilateral trading system has continued since the

establishment of the WTO. Negotiations under the GATS which were

carried forward from the Uruguay Round have resulted in substantial

commitments from these countries. Another noteworthy area of their

participation has been the Information Technology Agreement. The

WTO Members have also taken further initiatives for the benefit of the

least-developing countries in the following fields:

1. Telecommunications

2. Financial services

3. Movement of natural persons

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3.5 The Implementation of the WTO

Agreements: Developing Countries' Concerns

In reviewing the implementation of the WTO Agreements,

developing country Members have identified a variety of issues

reflecting their diverse interests and priorities. These relate mainly to

the following areas: (i) trade opportunities for products of interest to

developing countries; (ii) provisions that require WTO Members to

safeguard the interests of developing countries; (iii) transitional

periods; and (iv) technical assistance to developing countries.

1. Increased trade opportunities

The persistence of impediments to market access in areas of

export interest to developing countries has been identified as a major

policy concern. Developing country Members have cited the adverse

effects of tariff escalation and tariff peaks both in relation to

agricultural products and industrial goods.

There are also concerns that burdensome administrative and

customs procedures, changes to rules of origin and frequent use of

safeguard measures are adversely affecting exports of textiles and

clothing products from developing countries.

2. Recognition and safeguard of interests

As noted, most of the WTO Agreements contain provisions for

the recognition and safeguard of developing countries' interests.

Developing countries have claimed that these provisions have been

largely ineffectual. Concerns have been also raised that initiatives are

lacking to facilitate the active participation of developing countries in

the relevant standard setting organizations.

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3. Transitional periods

Transitional periods are intended to facilitate the implementation

of WTO Agreements by developing countries. It has been claimed,

however, that the transitional periods do not always give sufficient

time to deal with specific shortfalls in capacity that are faced by

individual Members, or with their precise development needs. Specific

areas in which a need for extension has been referred to by some

include those related to export subsidies for industrial products, TRIMS

and TRIPS.

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4. Technical assistance

Many Members have stressed the critical and continuing need for

assistance to strengthen the technical capacity of developing countries

in order to permit them to meet their WTO obligations. In addition,

Members have emphasized the importance of matching assistance

more closely to the specific technical or legal needs of individual

developing countries. For this purpose, while recognizing the efforts

made by the international community, especially in the context of the

LDCs, there have been calls not only for an increase in technical

assistance, but also for more effectively co-ordinate technical

assistance from all sources.

Now considering PAKISTAN

Pakistan today meets most of the essential requirements that

the foreign businesses and investors are looking for. Macroeconomic

stability, deep-rooted structural reforms, high standards of economic

governance, outward looking orientation, liberalized trade and

investment regime, easy access to policy makers, low production

costs, sophisticated financial sector and its location as a regional hub

make it a highly attractive country for business and investment.

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TABLE 3.8 Overview of the Economy After Military COUP

October 1999 October 2004Change in the

Indicator

GDP Growth

Rate4.2% 6.4% Positive

Inflation 5.7% 4.6% Positive

External

Debt/GDP52% 37% Positive

Exports US$ 7.8 billion US$ 13 billion Positive

Foreign Direct

InvestmentUS$ 472 million US$ 950 million Positive

Unemployment 6% 8% Negative

At the time of army coup, October 1999 in Pakistan the economic

condition was not very good. Soon after the military takeover Pakistan

was forced to become the part of alliance against the terrorism in the

world. Pakistan had a dramatic economic changes after military

takeover. It is not because of good economic policies but it is because

of external aid which Pakistan received after becoming the part of

global alliance against terrorism.

At the time of army coup the GDP growth rate of Pakistan was

4.2% which exceeded to 6.4% in 2004. Similarly, the exports has risen

from US $ 7.8 billion to US $ 13 billion. But the unemployment level

has risen from 6% to 8%. So if Pakistan adopts more policies for trade

liberalization there is a risk of more unemployment.

Considering the case of Pakistan especially, we come to know

that the imports of Pakistan were always greater than its imports, but

the ratio of trade balance shows that it is going towards negative side,

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just before the liberalization of trade Pakistan had very high trade

balance.

TABLE 3.9 EXPROTS, IMPORTS, & TRADE BALANCE AT CONSTANT

PRICES OF 1960-70 ( $ US Million )

Years Exports Imports Trade Balance

1949-50 176 595 -419

1959-60 176 479 -303

1969-70 338 690 -352

1979-80 855 1714 -859

1989-90 1167 1634 -467

1995-96 2509 3402 -893

If there is liberalization of trade, there will more deficit in foreign

trade because before liberalization Pakistan local industry was unable

to cover the import/export deficit and if there is free trade there will be

more losses.

3.6 New trade liberalization polices

adopted by Pakistan (Current Issues)

Now considering Pakistan’s current agreements on free trade we

come to know that the Pakistan has just signed (November 2006) free

trade agreement with China. China being a friendly neighbor is always

very supportive to Pakistan especially in economic field. China is also

going to open its first ever economic zone (Outside China) in Pakistan

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which is an example of corporation in trade between developing

countries.

On the other hand India is asking Pakistani government to award

it as a most favored nation status for trade. Pakistani government has

liberalized trade to some extent and has removed duties and lifted ban

on some of daily household (almost 150 products) use products (2005-

06). So Pakistani government is not allowing complete free trade with

India because if Pakistani government does so then their will be

bombardment of Indian made products which are low in price as

compared to products which are manufactured in Pakistan. This will

cause the local producers to suffer a lot. Pakistani government has to

decide at what level, when and how much liberalized trade with India.

4. Conclusion and Recommendations

Free trade no doubt, increases the size of the pie but the

distribution of enlarged pie is uneven with bigger and relatively more

advanced countries getting the lion’s share. Hence no surprisingly in

the wake of liberalization bigger or relatively more advanced

developing countries have performed far better than smaller or less

advanced developing countries.

Developed countries have moved towards service based

economy and their growth have showed, the demand for primary

commodities has fallen.

So developing countries have moved towards the production of

value-added exports and these exports have increased.

Even in case of South-South trade beneficiary are again bigger

and relatively advanced economies.

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Two types of developing countries are beneficiaries of trade

liberalization:

China and India competitiveness is based on price.

Enjoying economies of large scale.

Korea and Singapore are beneficiaries because their

exports are high tech value added products.

Complementary measures must be taken, such as

Improvement in the quality of education.

Investment in rural roads and other infrastructure.

Support for agricultural research and extension.

Creation of effective social safety nets for poor.

Developing country like Pakistan must liberalize to make WTO

regime PRO POOR.

Press must be allowed to overview the hearing of different disputes

among the member countries. Make WTO more democratic. More

authority must be given to developing countries to participate in

different functioning of WTO.

It needs the policy space of Pakistan (developing countries) to

decide What, When and How much to liberalize.

In order to make WTO regime more PRO POOR Pakistan need to

explore non-traditional market like that of Latin America and South

Africa.

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