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A Strategic Framework of Liberalising Trade in Services for Pakistan

Author

Listed:
  • Ahmed Gulzar

    (National Transport Research Centre (NTRC), Ministry of Communications, Islamabad)

Abstract

For a long time, services were considered non-tradable in the literature of international economics. However, the sector has emerged with profound importance on the basis of strong underpinnings. Technological advancement, financial constraints and limited options, and regulatory changes have greatly expanded the range and scope of trade in services especially in the context of increasing share of knowledge intensive products at the world market. Services now account for a substantial and rising share of output and employment in the economy of Pakistan and its trading partners. However, it is argued that the growing share of services in the economy of Pakistan and its trading partners has not translated into a significant increased share in their over-all trade. Pakistan is heading towards liberalisation of trade in services through unilateral, bilateral, multi-lateral agreements under the broad framework of WTO. Recently, in the wake of trade liberalisation in EBOPS services among Pakistan‘s trading partners; Pakistan has received request lists from its trading partners in the context of national treatment and market access under four modes of cross-border supply of WTO framework. In this regard, the opportunities as well as risks associated with trade liberalisation depend primarily on the relative competitiveness among the trading partners. It is, therefore, essential for the policy makers to design such a trade policy which not only helps in promoting domestic services industries but also open up new opportunities of employment generation and economic growth and development with a guarantee of peace and stability within and across its neighbouring countries. In this connection, this research paper develops a strategic framework of liberalising trade in services in 12 categories of services with 26 partner countries of Pakistan using various economics tools (RCAI, TII, TCI, TBI) and econometric models and techniques (OLS, PLS, 2SLS) by using panel data on annual and quarterly frequencies.

Suggested Citation

  • Ahmed Gulzar, 2011. "A Strategic Framework of Liberalising Trade in Services for Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 50(4), pages 733-770.
    • Handle: RePEc:pid:journl:v:50:y:2011:i:4:p:733-770
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    More about this item

    Keywords

    Trade in Services; Growth and Development; Trade Potential through Two Stage Least Square with Cross-section Fixed Effect Model by Using Panel Data; Trade Intensity Indices (TII); Trade Complementarity Indices (TCI); Trade Biased Indices (TBI); Revealed Comparative Advantage Indices (RCAI); Determinants of RCAI Using Pooled Least Square Method (PLS); Price and Income Elasticities Using Ordinary Least Square Method (OLS);
    All these keywords.

    JEL classification:

    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • C87 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Econometric Software
    • F1 - International Economics - - Trade
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • L8 - Industrial Organization - - Industry Studies: Services
    • F15 - International Economics - - Trade - - - Economic Integration
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy

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