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Uruguay Round (UR) of trade Pakistan became member of the World Trade Organisation (WTO) as a result of the negotiations (1986-94) to elicit gains from implementation of the new regime of multilateral trade liberalisation like other countries, under the ambit of the WTO. However, as is the case for many other developing countries, the WTO implementation process also involves significant challenges for the socio-economic development of Pakistan, due to the overall lack of technical capacity and the prevalent lower level of economic development in such countries. Recent economic research1 provides compelling evidence that trade liberalisation is associated with increased growth and development, evidenced by the unprecedented global growth since the 1970s.
However, the evidence of positive relationship between trade liberalisation and economic growth is not as convincing in the case of a majority of developing countries as it is in the case of developed countries. Pakistan’s economic and trade liberalisation during the 1990s, though initiated largely under the IMF pressure, has not been fruitful in improving its social and economic development; almost all socio-economic indicators were reversed by the end of the 1990s. This particular aspect further exacerbates the WTO’s implementation-related challenges for Pakistan, as its obligations include not only a further reduction of trade barriers, but also to implement significant reforms both in trade procedures and in many regulatory areas. The implementation of these agreements involves significant financial costs, raising the question of the future productivity of these expenses and opportunity costs. In addition to the financial cost, the social cost of the implementation in the form of rising unemployment is there (although the impact cannot be calculated precisely in various sectors at this initial stage). This is especially so as the implementation of WTO agreements would not only affect trade-related sectors of the economy but would have indirect effects on non-trade sectors of the economy.
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