Page 48 - CMA Journal (Sep-Oct 2025)

Focus Section

Overcoming Trade Barriers and

Leveraging Regional Opportunities

Trade policy is an essential element for the economic backbone of Pakistan's
development of a country by defining the terms under export economy, acc-
which it interrelates with the global market. Domestic ounts for approxi-
industries’ competitiveness can be influenced by it; mately 60% of total
moreover, it regulates market access for exports and exports, yet its deve-
fosters the creation of conducive environments for lopment has been
businesses to flourish in international markets. Growth sluggish. According to
can be promoted by a sound trade policy, which attracts the Pakistan Bureau of
foreign investment and helps to balance trade deficits by Statistics (PBS), textile
growing export volumes. exports grew by only
3.6% in 2020,
Pakistan faces significant challenges in its current
compared to 15% in
economic structure, and fostering sustainable economic
neighbouring
growth through trade policy is a critical step. Despite
countries. Sumaira Mukhtar Butt
Pakistan's strategic location and considerable potential in
sectors like textiles, agriculture, and manufacturing, its Barriers to PhD Scholar and Lecturer at
participation in global trade remains relatively low. Export Growth International Islamic
According to the World Bank, Pakistan’s exports in 2021 University, Islamabad
accounted for only 0.14% of global exports, far below its
Pakistan is facing a
economic potential.
multifaceted set of barriers in export growth, encompassing
Pakistan’s current trade policies are explored in this challenges in infrastructure, market access, innovation,
article, along with the barriers to export growth, and it and policy execution. The country's ability is affected by
outlines key areas for reform. It also highlights the these barriers, preventing it from fully capitalizing on its
benefits of aligning trade policies with international potential as a competitive player in the global market.
standards for export expansion, which are supported by
research studies from other developing economies. a) Outdated Trade Infrastructure- Pakistan’s trade
infrastructure, including ports, logistics, and
Current State of Pakistan’s Trade Policy customs procedures, is inefficient. The cost of doing
business has gradually increased. The World Bank’s
For many years, Pakistan's trade policies have evolved,
2020 Logistics Performance Index (LPI) ranks
transitioning from protectionism in the 1950s to a more
liberalized approach in the 1980s and 1990s. However, the Pakistan 122nd out of 160 countries in terms of
trade logistics, far behind competitors such as India
country’s trade policy has often remained fragmented,
ignoring its potential benefits. Tariff and non-tariff barriers (44th) and China (27th). Inefficiencies and delays in
in Pakistan’s trade policy still hinder the potential of its customs clearance, along with inadequate port
exports, which are critical to the national economy. facilities, raise the costs of exporting goods and
adversely affect Pakistan's competitiveness in the
Currently, Pakistan faces significant difficulties in increas- international market.
ing its exports. The textiles sector, which is considered the

46 ICMA’s Chartered Management Accountant, Sep-Oct 2025