Grade IX Geography: Trade

Raw materials generally have low international value

Capital goods rate higher than raw materials

Processed goods (value added) have the highest value

Lower value of foreign exchange

Increase our negative BOP

Forced to take international loans for ramping up economy

Increase in taxes at home to make up the difference

BOT is the difference between payment and total receipt of a country's transactions

BOP is the difference between import and exports of an economy.

BOPincludes capital transfers, shows overall strength of an economy and entails all visible and invisible transactions including services.

Countries have to take loans to induce foreign currency that depreciates the national currency resulting in debt and loss of national assets

Rise in inflation and unemployment

Importing more than we export shows our lack of infrastructure for producing world class value added products

East - Challenging because of our hostile relationship with India

North-West through Afghanistan is challenging due to rugged terrain and lack of road and railway infrastructure; dependence on historical passes - climate and earthquake area

North - CPEC and the construction of the Karakoram Highway

South West - Turkey and Iran - new highway in development stages

Pakistan has world class ports - warm water, year round, deep - Karachi, Port Qasim and Gwader

Cheaper and more efficient to transport by sea and through the Suez Canal to Asia and Europe

Moder ports, docks and container facilities make sea transportation viable

More competition within the marketplace

Higher value goods exported

Receive duties for high end imports

Capital investment and capital goods purchase indicates growth in manufaturing sector

Higher employment - skilled and unskilled

Modernization of industries

100% ownership rights

No minimum or maximum investment limit

Duty free on capital goods import

No taxation on input goods and services

Exemption from import duties and freedom from national import restrictions

EPZ's should be established near sea ports

Consistent government policies to create stability and investor confidence

Adequate transportation network for logistics of raw materials to factories and finished goods to makets

Foreign investor would only invest if the location (seaport) gave them a competitive advantage

Gwadar and Ormara have many strategic advantages

What are these?

What are the pros of international trade?

What are the cons of international trade?

Place your answers on Padlet for homework after we have discussed it in class.

In what situation are trade barriers beneficial?

In what situation are these harmful?

What are the different types of tariffs?

What are the differences between quotas, subsidies and embargoes?

Improves supply chains; logistics, customs, handling, container storage, refrigeration

Reduces transportation costs and eliminating backup at sea ports

Reduction in road congestion

Employment oportunities in remote areas

WTO membership will provide advantages for Pakistani producers in international markets and greatly improve the prospects of improving the industry's competitiveness and quality of products and services in the long run.

Textiles

Agriculture

Service Sector

Public Administration

Import Duties

Small and Medium Scale Industries