Global Logistics &

Transportation
By
Muhammad Moazzam
History of International Trade
Ancient Period

• Started as early as 2,500 BC by Sumerians of Northern Mesopotamia

(Archeologists)

• By 2,000 BC Greeks used to exchange olive and wine for grains and
metals

• By 340 BC developed trade instruments such as banking and credit,

insurance, trade treaties, and special diplomatic privileges.
Ancient Period

• By 1st century AD Greek Empire declined and Roman Empire became

powerful

• 1st century AD, Romans started trading with Chinese along the Silk
Road and by Sea

• By 5th century AD, Roman Empire declined

• By 11th century AD, international trade revived as a result of church’s

support to crusaders
Ancient Period

• New products from the East such as carpets, furniture, sugar and
spices were well accepted by Western markets

• Italian cities of Venus and Genoa replaced Constantinople as center of

international commerce

• Letter of credit, bill of exchange and insurance of goods in transit

were used by merchants
Ancient Period

• By the end of 15th century the European cities of Spain, Portugal and
Holland became center of international trade
Colonial Period (1500 - 1900)
• Discovery of America in 1492 and sea routes to India 1498

• Colonization: rationale (Mercantile economic policies)

• Economic power through reducing trade dependency on rivals

• Augment national treasure through exports, re-exports and extracting

precious metals

• Utilize resource base of the colony

Colonial Period (1500 - 1900)
Industrial Revolution in England (1750): Mass Production
• Phase 1 – Colonization
• East India Company, 1600

• Dutch West India Company, 1621

• Hudson’s Bay Company, 1670

• Phase 2 – Overseas expansion (1765-1900)

1900 to the present
Trade development, free trade and world economy
• WW1 – migration of people and capital from Europe to US, Canada, Australia,
Argentina and Brazil

• Recovery from WW1 lead to trade protectionism particularly on food imports

• 1920’s and 30’s witnessed great depression

• To avoid repetition after WW2, development of IMF and IBRD in 1944

World Merchandize Trade
World Trade and RTAs
 Comparative Advantage

If countries specialize and export the commodities whose opportunity

cost is relatively low, trade can be mutually beneficial to both trading
countries, even when one country has absolute advantage in all goods.”

Muhammad Moazzam 12
WTO Agreements Related to International Trade
 WTO is GAT plus a lot more

• GATT: (1947-1994)

• Established: 1 January 1995

• Location: Geneva

• Created by: Uruguay Round negotiations (1986-94)

• Membership: 144 countries (2002) and 164 (2016)

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 WTO Principles: Free and Fair Trade Through

• Non-discrimination
─ Two components: most favored nation (MFN) rule, and national treatment policy

• Reciprocity
─ To limit the scope of free-riding that may arise because of the MFN rule

• Binding and enforceable commitments.

• Transparency

• Safety valves

Muhammad Moazzam 15
 WTO Agreements

• Agreement on Agriculture (AoA):

─ Domestic support
─ Market access
─ Export subsidies

• Agreement on Sanitary and Phyto-Sanitary (SPS) Measures

─ Human health
─ Plant health
─ Animal Health
Muhammad Moazzam 16
 WTO Agreements

• Trade Barriers
─ Tariff barriers such as specific tariff (by weight or volume), Ad Valorem (by %
of value) or discriminatory tariff (different for products from different
countries)

─ Non-tariff barriers such as import quotas, import licenses, embargoes etc.

─ Administrative delays in the form of regulatory controls or bureaucratic rules

Muhammad Moazzam 17
 WTO Agreements

• Agreement on Trade Related Intellectual Property Rights (TRIPS)

1. Copy rights i.e. computer programs (50 years)

2. Trademarks i.e. pizza hut, windows xp

3. Geographical Indications i.e. Bastmati Rice

4. Industrial Designs i.e. printed fabric (10 years)

5. Patents i.e. plant variety (20 years)

6. Integrated Circuit Layout Designs i.e. electronic chip boards (10 years)
 WTO Agreements

• Agreement on Anti-Dumping

• WTO Dispute Settlement Body (DSB) to deal with dumping and export
subsidies
─ Safeguard measures: emergency protection from imports

─ Countervailing duties
Pakistan’s Regional Trade Agreements
 Pakistan’s Top Ten Exports
Serial Export Item Value (US$) % of Exports
1 Miscellaneous textiles, worn clothing 3.8 billion 20.1%
2 Clothing, accessories (not knit or crochet) 3 billion 16.1%
3 Knit or crochet clothing, accessories 2.6 billion 13.8%
4 Raw Cotton 2.5 billion 13.2%
5 Cereals 916.6 million 4.9%
6 Leather/animal gut articles 700.6 million 3.7%
7 Mineral fuels including oil 415.9million 2.2%
8 Fruits, nuts 388.2 million 2.1%
9 Manmade staple fibers 367.3 million 2%
10 Optical, technical, medical apparatus 334.6 million 1.8%
 Pakistan’s Top Ten Export Destinations in 2015
Serial Importing Country Value (US$) % of Exports
1 US 3.7 billion 16.6%
2 China 1.9 billion 8.8%
3 Afghanistan 1.7 billion 7.8%
4 UK 1.6 billion 7.1%
5 Germany 1.1 billion 5.2%
6 UAE 899 million 4.1%
7 Spain 782.3 million 3.5%
8 Bangladesh 700.6 million 3.2%
9 Netherlands 666.9 million 3%
10 Italy 618.2 million 2.8%
Source: CIA 2016
 Pakistan’s Trade Agreements with Other Countries

• Free Trade Agreements (FTA)

─ with Sri Lanka, China, and Malaysia.

• Preferential Trade Agreements (PTA)

─ With SAARC countries

─ With Iran and Mauritius

 Pakistan’s Trade Agreements with Other Countries

• Double Taxation Agreements (DTA)

─ with Austria, Canada, Germany, Indonesia, Italy, Lebanon, Mauritius, Poland,
Switzerland, Turkmenistan, Kazakhstan, the United Arab Emirates, Belgium,
China, France, Greece, Iran, Japan, Libya, Saudi Arabia, Romania, Sweden,
Belarus, Hungary, Jordan, Kenya, Kuwait, Malaysia, Netherlands, Nigeria,
Norway, Oman, Philippines, Qatar, South Africa, Syria, Tunisia, Uzbekistan, the
United Kingdom, Bangladesh, Denmark, Finland, India, Ireland, South Korea,
Malta, Singapore, Sri Lanka, Thailand, Azerbaijan, and Turkey.
 Pakistan’s Bilateral Trade Agreements
• Afghanistan Pakistan Transit Trade Agreement, (APTTA)

• Agreement between Pakistan and Iran on bilateral Road Transportation of Goods,

• Agreement between Pakistan and China on International Road Transport (Goods &

Passenger)

• Agreement for Traffic in Transit among China, Kyrgyzstan, Kazakhstan and Pakistan

• Agreement between Pakistan and Iran on International Transport of Passengers and

Goods by Road

• ECO Transit Transport Framework Agreement (TTFA) (Road, Rail and Ports)

• Agreement between Pakistan and Turkey on Road Transport (Passenger and Goods)
 International Arbitrations Bodies

• UN Commission on International Trade Law

• World Bank’s International Center for Settlement of Investment

Disputes
─ Pakistan is a member of the Multilateral Investment Guarantee Agency
(MIGA), an arm of the World Bank

• Court of Arbitration of the International Chamber of Commerce

• WTO Dispute Settlement Body