After the introduction of the trade liberalisation policies in the developing countries across the globe issues of international trade and economic growth have gained much importance. The act of buying and selling goods and services is called trade. Trade exists between countries. Industrialisation, globalisation, increase in growth of multinational companies etc., all lead to need of trade between countries. This is referred to as International trade.
This liberalization process has affected various sectors of the economy, in which exports, imports and trade balance are the most important sectors. Similarly, pure effect of trade liberalization is to raise import growth more than export growth. Thus, trade liberalization has worsened trade balance in Pakistan. This result is consistent with the results of previous studies that in developing countries trade liberalization deteriorates trade balance in the short run. It means that the balance of payments consequences of trade liberalization matter in Pakistan.
The role of trade liberalisation with food security is an urgent issue and has been investigated for a long time. Generally, it is widely accepted that trade liberalisation is crucial determinant to guarantee food availability through import and export activities. It also provides more diversified choice with lower price. Furthermore, free trade promotes economic growth through specialisation, technology transfer, knowledge spillover and export revenue (Wacziarg and Welch, 2008). However, economic growth does not guarantee that people will have enough necessary food because of the dependence on income distribution and other factors.
Economic growth is enhanced via trade liberalization as it involves the removal of protectionist barriers, increases market, labour and raw material access. China has flourished since market reform in 1978, "GDP growth averaging about 10 percent a year has lifted more than 500 million people out of poverty" (World Bank 2015). These structural changes resulted in "increased openness to other market economies" (Wu 2009 p10). The reform included an increase in the various enterprises allowed to trade, the development of trade policies such as tariffs, quotas and duty exemptions, removal of their two-tiered foreign exchange system and price reformation. Duty exemptions liberalized imports for the production of goods, quotas on the export of textiles and clothing was removed and the expansion of labour-intensive industries provided increased wages for locals.
and Thugge K; 2001). In the article ‘International Trade and Poverty Alleviation” by G. Bannister and K. Thugge; they state that ‘Trade liberalization’; by lowering prices, will create a better playing filed for the poorer communities to access the resources. Furthermore, they go on to say that trade testrictions could possibly be friendlier to the poverty stricken areas. This
The liberal free trade boosts economic growth, welfare and reduces poverty the main outcome are growth, productivity, investment and price stability it also increase the employment opportunities and advancement of domestic markets (Ben-David 1996). Importance of trade liberalization in economic development it is essential to understand transmission channels through analyzed which free trade effect industrial production, domestic private industrial investment, exports imports, and hence economic growth of Pakistan ( Alia Khan (1995), Iqbal and Zahid (1998), Din (2003) Pakistan also emphasized in inward outward trade policies from nearly four decades. High tariff rates, non-tariff barriers, exchange control and other administrative control are the main feature of this policy. Objectives of these policies are to support import substitution industrialization and to protect infant and domestic industries from external competition. This policy has generated anti-export bias, inefficiencies and promoted rent-seeking attitudes (Qayyum Khan
Due to liberalization of trade and deregulation of financial markets the governments have a little control over the flow of capital which facilitated the movement of businesses across the borders. It showed an impact on several organizations and forced them to take innovative steps in order to improve the operational efficiency through introducing quality management system. Thus many organizations have begun strengthening their businesses through mergers and acquisitions to expand their free markets around the world. This increase in the international economic interdependence showed lot of impact on the concept of traditional industrial relations in several broad ways especially in India. Globalization thus showed its impact both directly and indirectly on the industrial relations systems and its actors by disturbing the relation between "capital" and "labour" in each country.
Economic Activity The transfer of resources between industries is often accompanied by trade liberalization and has a significant impact on employment and income. Thus, households are affected by the profits generated. That is, if income is flexible, there is full employment, and then variations in the price level will affect wages while employment remains unchanged. Alternatively, if there are a lot of movements by labors in and out of the economy then trade liberalization will change the level of employment. 3.
Trade liberalisation causes the expansion of global and regional trade and also causes changes in trade patterns of global trade. Multilateral trade and bilateral trade liberalization makes the global output three times more than the level of global trade in1950s there is growth in non-commodity exports, such as computers and electronics. Change in export composition of world trade shows the strong emergence of EMEs. Last five-six decades seems tremendous changes in international trade and there is change in the mode of production too. There is a shift from horizontal specialization to vertical specialization, that is, the increased importance of imported input in the production of goods that are exported.