WTO, Globalization &

Pakistan
Presented By
Abiha Jafar Zaidi
Fareeha Saquib

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INTRODUCTION
WTO(World Trade Organization)
Established: 1st January, 1995
Created By: Uruguay Round Negotiations
(1986-94) 18th GATT round.
Budget: 185 Million Swiss Francs for 2008
Membership: 153 countries, with Ukraine
as its newest member

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 ADVANTAGES OF WTO
Free trade cuts the cost of living
It gives consumers more choice and a broader range of
qualities to choose from
Trade raises income
Trade stimulates economic growth, which is good for
employment
The basic principles make the system economically
more efficient and cuts costs
The system allows disputes to be handles constructively
A system based on rules rather than power makes life
easier for all
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 Purpose of WTO

Liberalize Trade
Solve Trade Disputes
Organize Trade Negotiations
Maintain Trade Barriers
Assist with Trade Policy Issues

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 Objectives of WTO

To raise standard of living.

Ensuring full employment.
Developing the full sense of the resources
of the world and expanding the
production and exchange of goods.

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 4 Basic Principles

1. Protection to Domestic Industry through

Tariffs.
2. Binding of Tariffs
3. MFN Treatment
4. National Treatment Rule

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 Agreements
Tariffs
Agriculture
Standards and Safety
Textiles
Services
Anti-Dumping
IntellectualProperty
Non-tariff Barriers

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 Globalization
“the free movement of goods, services, labor
and capital across borders.”

Types Of Globalization
◦ Economic globalization
◦ Environmental globalization
◦ communicative globalization

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 Economic globalization is characterized by
◦ increased trade and investment,
◦ liberalization (free trade),
◦ privatization of public services and
◦ de-regulation of many government institutions.
 Environmental globalization recognizes that an
environmental incident or impact that happens in
one region or country. It has the potential to affect
the entire world's health and well being.
 communicative globalization refers to the rapid
growth of communication technologies such as
internet, telephone, cellular phone, satellite and so
on. This has great impact on culture.
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Impact Of Globalization

On The developing countries

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Impact on industrial sector
Textile and related products
Trade liberalization principle
The average tariff in Pakistan is around 17% however
there is a need to ensure that there are no adverse
affects of trade liberalization on the domestic
producers.
Completion of all textile and clothing products into
free trade environment under Agreement of Textile
and Clothing (ATC)

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Impact on Agriculture
Agreement of Agriculture (AOA)
Rules regarding export subsidies,
domestic support and market access
Agreement regarding food safety and
protection of human and animal life and
health from agricultural imports
Production and exports of meat, dairy
products, fruits, vegetables, etc.

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Agreement on Trade related aspects of
Intellectual Property Rights (TRIPS)
To fully utilize its competitive advantage
and to ensure that the industry is
encouraged to provide intellectual
property protection for its products, and
imported products.

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Genaral Agreement on Trade in Services
(GATS)
WTO agreements have an in-built
mechanism for trade remedial measures
for problems of increased imports and
unfair practices under the global trade
regime.
WTO agreement of Technical Barriers.

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Proper support and policies for industry,
along with intelligent balancing of
imports and exports is vital for growth of
Pakistan’s economy and is likely to lead
towards a bright future and trade
enhancement under the WTO regime.

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Pakistan’s experience
 Strategies After 1947:

a strategy of import substitution (IS) industrialization

was adopted.
 Pakistan’s exchange rate was relatively over-valued,
use of quantitative controls on imports .
 The objective of the end of EBS was to adopt more
uniform effective exchange rates for exports.
 export promotion (EP) emerged as a desirable
 strategy of development.

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During 1970’s:

 Increased in international oil prices

 This increased the import bill and thus worsened the
balance of payments problem.
 On the other hand, the emergence of Middle East
market and remittances contributed significantly to
improving the trade balance.
 Devaluation, elimination of EBS, and the end of
import licenses were the most notable measures
during 1970s that were taken to reduce anti-export
bias.

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1980’S ONWARD:

 Pakistan started liberalizing the economy with the

help of IMF and World Bank in 1982-83.
 Government has taken a number of measures
during 1990s that includes: privatization,
liberalization of trade and foreign exchange, and
opening up its capital markets to foreign investors.
 like many other developing countries, Pakistan has
made significant efforts to integrate its economy
with rest of the world through foreign trade,
investment and other macroeconomic policies.

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SUGGESTIONS
Rationalizing the Tariff Structure
Pakistan’s Agricultural potential has not been taken
advantage of due to inadequate research, structural problems,
barriers in assessing export markets and competitions from
other countries exporters
Very few institutions are in Pakistan where different stake
holders can interact on the WTO issues. They are based on
assumptions rather than research
The speed and sequencing of reforms must be carefully
orchestrated
There should not be excessive reliance on demand
management, as it can further slow down the pace of
economic growth

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There is need for a coordinated and collaborative effort among the South
Asian countries to expand trade in the region
Pakistan needs to diversify its exports base and shift from primary
agricultural products to more value added and industrial products
Pakistan should increase exports not only to earn more foreign exchange
but also to join the world community in globalization
Direct foreign investment is crucial for resource mobilization, therefore, it
is strongly recommended that the government of Pakistan must attract
foreign direct investment by giving them various incentives
Financial depth is also playing crucial role in the overall development of
the country. It is important that we should strengthen our financial sector
for capital flow
Political stability is crucial for economic development of the country
Pakistan should be provided enhanced access to the international market
Pakistan should try to attract FDI through the policies of liberalization,
deregulation, and privatization
All three sectors, first (government), second (business), and third (civil
society) must work together towards achieving national development
objectives and strengthen national institutions

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