Anti-Export Bias – The Case of Pakistan
DOI:
https://doi.org/10.59926/jodprp.vol10/08%20%20%20%20%20Keywords:
Trade Policy, Economic Impacts of Globalization, Macroeconomic Reforms, Tariff reforms, Anti-export biasAbstract
To investigate the cause of low export growth in Pakistan, this study estimates the anti-export bias for Pakistan’s economy through a bias index (i.e. export exchange rate (1+tariff rate)/ import exchange rate (1+subsidy rate)) from FY98 to FY21. We find an average anti-export bias of around 7 – 10 percent from FY08 to FY21. Our findings reinforce that tariffs, rather than export subsidies, warrant attention. Pakistan’s trade policy framework also suggests that both the rate and structure of tariffs are the root cause of the anti-export bias in Pakistan. Literature suggests that low, uniform or minimally dispersed import tariffs could be a solution to this problem. However, tariff reforms are not successful in isolation and must be complemented with enabling structural reforms in other sectors of the economy. Recent policy steps to ameliorate this bias is a welcome step but require further action in crafting a unified macroeconomic framework, along with meaningful analysis on a suitable tariff structure in Pakistan.
JEL Classification Codes: F13, F62, O24
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