WTO, Economic Reforms and Export Competitiveness

Muhammad Naveed Iftikhar and Muhammad Aslam Chaudhary1

Abstract

The paper analyzes the impacts of trade liberalization in response to WTO and other economic reforms. In this respect, major economics reforms, terms of trade, commodity concentration (CCI) and geographic concentration (GCI) have been estimated. Besides competitiveness is also analyzed by utilizing Revealed Comparative advantage. Revealed comparative Advantage (RCA) has been estimated for 74 commodity groups for the year 2005 and it is compared with Chaudhary (2000) estimates of RCA for the same commodity groups. Empirical results indicate that, over time, Pakistan has lost its competitiveness, which was improving up to 2000. RCA shows that Pakistan has lost RCA for 7 commodity groups (out of 29) as compared with the year 2000 within five years. Thus, trade liberalization has not been fruitful so far. There is also hardly any improvement in CCI, rather GCI has been deteriorated. Trade deficit has been enhanced overtime and it has emerged as one of the main economic problems for Pakistan. The very reason that Pakistan has again contacted IMF for its survival. In the light of above, there is a need that policy maker must be careful before further liberalization and privatization.