3/1/2019 International trade

AND CURRENT
ISSUES.
Pakistan’s trading
partners

Submitted to:
Miss muzzamil
hanif
Submitted by:
Habiba Kausar
2016-B.COM-004
BS-COMMERCE-
6TH
 Imports, exports of Pakistan and its trading
partners
Introduction:
There is no country in the world today which produces all the commodities it needs. Every
country, therefore, tries to produce those commodities in which it has comparative advantage. It
exchanges part of those commodities with the commodities produced by other countries
relatively more efficiently. The relative differences in factor endowments, technology, taste etc.,
among the nations of the world have greatly widened the basis of international trade. The
developed countries are generally exporting consumer and industrial goods to the developing
world and import primary goods from them. The developing countries, depending upon their
state of industrialization, are mostly exporting raw material and semi-finished goods and getting
finished goods and services from the advanced countries. The low income countries are thus at a
disadvantageous position. However, the main contributions of trade to economic development of
the low income countries including Pakistan.
Pakistan has bilateral and multilateral trade agreements with many nations and international
organizations. It is a member of the World Trade Organization, part of the South Asian Free
Trade Area agreement and the China–Pakistan Free Trade Agreement. Fluctuating world demand
for its exports, domestic political uncertainty, and the impact of occasional droughts on its
agricultural production have all contributed to variability in Pakistan's trade deficit. The trade
deficit for the fiscal year 2013/14 is $7.743 billion, exports are $10.367 billion in July–
November 2013 and imports are $18.110 billion.Pakistan's exports continue to be dominated by
cotton textiles and apparel. Imports include petroleum and petroleum products, chemicals,
fertilizer, capital goods, industrial raw materials, and consumer products.
Imports:
Good or service brought into one country from another or goods and services produced by the
foreign sector and purchased by the domestic economy. Along with exports, imports form the
backbone of international trade. The higher the value of imports entering a country, compared to
the value of exports, the more negative that country's balance of trade becomes.
 Major Imports of Pakistan:
Pakistan’s major imports include
1) Machinery 7)Petroleum
2) Chemicals 8)Vehicles and spare parts
3) Edible Oil 9) Wheat
4) Tea 10) Fertilizers
5) Plastic material 11) paper Board
6) Iron ore and steel 12) Pharmaceutical products
Pakistan’s imports are also highly concentrated in few items namely, machinery, petroleum and
petroleum products, chemicals, transport equipment, edible oil, iron and steel, fertilizer and tea.
These imports accounted for 73% of total imports. Among these categories machinery,
petroleum/petroleum products and chemicals accounted for 53.4% of total imports.
Pakistan’s imports are highly concentrated in few countries. Over 40 percent of them continue to
originate from just seven countries namely, the USA, Japan, Kuwait, Saudi Arabia, Germany,
UK and Malaysia, Saudi Arabia is emerging as major supplier to Pakistan followed by the USA
and Japan. The shares of USA and Japan, with some fluctuations, exhibited a declining trend
because of the shift in the import of machinery/capital goods and raw materials to other sources.
On the other hand, the share of Pakistan’s imports from Saudi Arabia has been rising due to
higher imports of POL products. Malaysia share has shown rising, as well as, falling trends over
the years mainly on account of fluctuations in palm oil prices.

Exports:
A function of international trade whereby goods produced in one country are shipped to another
country for future sale or trade. The sale of such goods adds to the producing nation's gross
output. If used for trade, exports are exchanged for other products or services. Exports are one of
the oldest forms of economic transfer, and occur on a large scale between nations that have fewer
restrictions on trade, such as tariffs or subsidies.
Major exports of Pakistan:
Pakistan Export lots of different items to a dozen of countries. Following is the list of Export
items.
1) Rice 7) Raw Cotton, textile product and cotton yarn
2) Synthetic textile 8) Sport goods
3) Electrical Appliances 9) Surgical instruments
4) Sports goods 10) Cook wares
5) Carpets and rug 11) Leather and leather products
6) Chemical and cement 12) Vegetables fruits and fish
Exports were targeted at $18.6 billion or 12.9 percent higher than last year. Export of food group
declined by 3.5 percent. This declined is caused by a 2.6 percent and 14.3 percent decline in
exports of rice and fruits. Export of rice declined due to lesser production caused by adverse
weather condition which kept the domestic price higher.
It was more profitable to sell within the country than to export. Exports of textile manufactures
grew by 0.2 percent. Prominent among these are export of knitwear 13.9 percent, readymade
garments 6.8 percent, made up articles 8.9 percent, cotton yarn 4.6 percent and towels 2.6
percent. Exports of other textile materials registered a high double digit growth of 17.2 percent.
Export of raw cotton, cotton cloth and bed wear on the other hand registered a decline.

Although Pakistan trade with a large number of countries its exports are however highly
concentrated in few countries including USA, Germany, Japan, UK, Hong Kong, Dubai and
Saudi Arabia which account for one- half of its exports The United States is largest export
market for Pakistan, accounting for 28.4 percent of its exports followed by UK and Germany.
Japan is fast vanishing as export market for Pakistan as its share in total exports has been on
decline for one decade, reaching less than one percent from 5.7 percent a decade ago.

Pakistan exports impact on economy:

Exports were targeted at $18.6 billion or 12.9% Export of food group declined by 3.5% Caused
by decline in exports of rice 2.6% and fruits14.3%. Export of rice declined. Exports of textile
grew by 0.2%. Knitwear 13.9%. Readymade garments 6.8%. Made up articles 8.9%. Cotton
yarn 4.6%. Towels 2.6%. Other textile materials growth 17.2%. Export of raw cotton, cotton
cloth and bed wear on the other hand registered a decline.
Trading partners of Pakistan:
The following is a list of Pakistan's main trading partners as of JULY 2017.

Percentage of Percentage of Percentage of

Country
imports exports total trade

 China 31 11 16.9

 Saudi Arabia 12.2 8.5 9.0

 United Arab
12.1 8.5 10.9
Emirates

 EU 10.4 18.2 13.0

 Malaysia 9 0.9 2.9

 Kuwait 6.3 0.07 4.4

 Singapore 4.1 0.3 2.8

 India 4.07 1.67 3

 Percentage of Percentage of Percentage of
Country
imports exports total trade

 United States 3.7 13.6 6.7

 Japan 3.6 1.6 2.9

 Iran 3.4 1.8 2.9

 Afghanistan 0.3 7.6 2.8

Conclusion
Pakistan international trade is suffering from huge amount of deficit due to low demand for its
exports. Domestic political instability also accounts for trade deficit. By 2016 exports forecast
that Pakistan oil imports will raise. Pakistan basically is an agrarian society supported to some
extent by the industrial one. Pakistan has a good business deals with its partner, but unlocking it
imports more than the exports. Exports, moreover, are mostly composed of raw materials instead
of manufactured or finished goods.