International Trade

& it ’ s impact on the

economy of Pakistan
Presented by:
Farrukh Kiani

Reg# 14426
International
Trade
International
trade is
exchange of
capital,
goods, and
services
across
international
borders or
territories

Investopedia Says!!!
 Net exports is
the amount by
which foreign
spending on a
home country's
goods and
services
exceeds the
home country's
spending on
foreign goods
and services
Economists theories &
models
 Ricardian model

 New Trade Theory

 Gravity model

 Neo-Ricardian trade theory

 Heckscher-Ohlin model

C o u n trie s E xp o rts+ Im p o Date
rts I

United States $3 , 173 , 000 , 000 , 000 2010 est .

People's Republic of $2 , 813 , 000 , 000 , 000 2010 est .

China
Germany $2 , 457 , 000 , 000 , 000 2010 est .
Japan $1 , 402 , 000 , 000 , 000 2010 est .
France $1 , 086 , 400 , 000 , 000 2010 est .
United Kingdom $952 , 100 , 000 , 000 2010 est .
Italy $918 , 100 , 000 , 000 2010 est .
South Korea $884 , 200 , 000 , 000 2010 est .
Netherlands $859 , 700 , 000 , 000 2010 est .
Canada $813 , 200 , 000 , 000 2010 est .
Hong Kong $795 , 600 , 000 , 000 2010 est .
Trade Organizations
General Agreement on Tariffs and
Trade (GATT)

World Trade Organization
(WTO)
Pakistan Trade
Major Exports:


Textiles
Rice
Leather goods
Sports goods
Chemicals
Carpets and rugs
Pakistan Trade
Major Imports:

Petroleum & Petroleum products

Machinery
Plastics
Transportation equipment
Edible oils
Paper and paperboard
Iron and steel
Important Terms
 Trade Surplus:

The positive difference between net
exports and net imports
 Trade Deficit:

The negative difference between net
exports and net imports
Pakistan International
Trade
Pakistan over the years is caught
up in the Trade Deficit cycle. Its
trade deficit has been increasing
over a number of years specially
in the last 5 years it has crossed
almost $20 Billion. Lets have a
look at the Exports and Imports
of Pakistan, and see trade deficit
over the last 25 years.
Export Partners of
Pakistan
Import partners of
Pakistan
Foreign trade statistics of
Pakistan
International trade
organizations
Pakistan is a member of international
trade organization included:
ASEAN
ECO
SAFTA
WTO
Factors effecting
International Trade
Energy crisis
Oil prices
Devaluation of money
Surging Imports
High Level of Consumption
Flaws in Agriculture Productivity
Political instability

How to increase Exports????

Decrease in Cost of production and

interest rate

Reduction of custom duties

Cost of transport should be minimized

Adoption of new production
techniques

How to increase
Exports????
Production and export of value
added goods

Encouragement of new industries

Enhancement of labor productivity

Production and development of new
products and goods

How to decrease
Imports???
New industries should be setting
up
For production of edible oils,
seeds should be grown locally
Tea consumption should be
discouraged
Import of luxurious items should
be banned or heavily taxed


Searching for New
Markets
Trade agreement with new countries
should be made
Participation in trade fairs arranged by
foreign countries
Seminars and trade exhibitions should
be arranged within country
Research for marketing should be
conducted
Continue…
Quality and Packaging of International
Standard


Joint collaborations
Conclusion
The impact of higher Trade Deficit is
very negative on the economy as it
results in problematic Balance of
Payments report, as Trade Deficit
impacts the current account of that
report. The result is that the
government has to inject more just
to balance this deficit. As a result we
see hyper inflation from time to time
or government looks for outside