A Strategic Framework of Liberalising Trade in Services for Pakistan.

Ahmed Gulzar


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. JEL classifications: C52, C63, C87, F1, F13, F14, L8, F15,
O24 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),

Full Text:


DOI: https://doi.org/10.30541/v50i4IIpp.733-770


  • There are currently no refbacks.