Trade regime is a system of tariff and non-tariff barriers aimed to strengthen local

producer’s competitiveness. Trade regimes are most important functions that affect
industrialization process.
The import substituting industrialization of the 1950’s and 1960’s, the non-
devaluation decision in 1948, the high tariffs and protection given to domestic industries in
1960, the devaluation decision of Bhutto government in 1972, the decision by Zia regime to
delink rupee from the dollar and all other issues related to trade and exchange rate,
historically had numerous consequences for the economy especially for the industrialization
process. The trade regime in Pakistan was held responsible for gross inefficiencies in
industrial structure towards ends of the 1960 which helped to develop trade policy.
In our presentation we are going to discuss basic facts of Pakistan foreign trade, trade
regimes.
Pakistan’s Foreign Trade: Basic Facts
The pattern and nature of foreign trade gives a good indication of the pattern and
nature of the economies that enter into trade relationships. In 1948, 99 per cent of Pakistan
export earnings were made by of just five primary commodities which are raw jute, raw
cotton, raw wool, hides and rice. These commodities mainly dependent on adequate climatic
condition.
A change began to occur in pattern of exports as Pakistan economic policies shifted
towards industrialization. By 1951, these five commodities contributed 93 per cent of export
earnings which by 1958 had fallen to 75 per cent.
Pakistan main imports in first decade were consumer goods, cotton textiles and cotton
yarn. The main trading patterns of Pakistan in early years were UK, the USA, Germany,
Belgium, Italy and Japan.
In the decade of development under Ayub Khan, the nature of production changed
due to industrialization more and more countries began to developed and industrialize, their
demands and needs for foreign goods also changed. For Pakistan this meant the
diversification in both export and import markets and the pattern of trade changed after 1971
when Bangladesh was created.
Pakistan exports and imports from 1950 to the most recent statistics Pakistan’s trade
has expanded from US $759 million in 1950 to $68 billion in 2012 and increase about 90
times. One of most interesting statistics that the balance of trade has been negative means that
Pakistan always imports more than exports.
The current account deficit has shown some huge fluctuations over last forty years,
more than doubling form previous year in 1983, 1987 and 1993.
Composition of exports and imports have changed. Primary commodities which were
99 per cent of exports in 1948 fell to 45 per cent in 1971 and were 11 per cent in 1995.
Similarly manufactured goods now contributed 70 per cent of exports in 2005.
After 9/11, Afghanistan has now emerged as one of Pakistan’s main export market.
The rise of Middle East as a major importer of Pakistani products after 1975 and as a source
for Pakistan’s importers mainly of Petroleum. Malaysia provides Pakistan Palm oil for
manufacture of eatable oil and ghee. After 2010 now China is Pakistan main non-oil
producing trading partner.