Essays on Exploring Trade Costs, Facilitation and Export Potential in Pakistan

Abstract

International trade is crucial for global economic growth as it provides countries with access to new markets and opportunities for efficiency improvements. Despite efforts to liberalize trade, trade costs continue to act as barriers to competitive trade. This dissertation comprises three essays that analyze bilateral trade costs, investigate their causes, and assess trade facilitation measures within Pakistan. The first essay uncovers persistent trade challenges in Pakistan, including non tariff barriers, infrastructure issues, exchange rate vulnerability, transportation obstacles, and uncertainty regarding time delays, all of which hinder export growth. The second essay reveals high sectoral-level trade costs in agriculture and manufacturing compared to trading partners. Empirical findings indicate that implementing measures from the World Trade Organization's Trade Facilitation Agreement can reduce these costs at the sectoral level. The third essay identifies regularity barriers contributing to rising trade costs in the service sector. It emphasizes the necessity of implementing measures like liberalization and trade facilitation to reduce these costs and stimulate growth in services exports. This research offers valuable insights into reducing the costs of trade barriers and enhancing export competitiveness in Pakistan.