Welfare Effects in Regional Block Trade: A Case Study of Exporting Dried Dates from Khairpur Mirs

Abdul Latif, Muhammad Suhail Nazar, Najma Noor Phulpoto, Faiz Muhammad Shaikh
2011 International Journal of Business and Management  
This research investigates the welfare effect of economic costs and benefits of Pak-India trade with exporting dried dates. The first scenario is when normal trading relation with India will be restored. It means that both countries will give the MFN status to each other. in the second scenario, the SAFA will be operative and there will be free trade between India and Pakistan and both countries will remora all tariffs and custom duties from each other's imports. After employing the simplified
more » ... ing the simplified static analysis framework, the analysis based on simulations reveals that current demand for Khairpur dates will expand after the FTA and consumer surplus will increase. The drop in the domestic prices of dates will increase the production of many down stream industries, which will have pleasant multiplier effects on the economy. Overview of dates industry and results of economic analysis indicate that Pakistan will get benefit from the FTA by getting the cheaper labor for which will increase their competitiveness, and to reduce the costs of trade diversion in some commodities, the government should reduce MFN tariffs on industrial dates before implementing the FTA a key rule of multilateral trade system is the reduction in trade barriers should be applied, on a most-favored nation basis (MFN), to all WTO members. The only exception to the MFN principle built into the GATT legal framework is the provision for reciprocal free trade within customs unions and free trade areas (GATT article XXIV) objectives of the present study is to analyze qualitatively and quantify the potential economic cost and benefits of prospective trade between India and Pakistan to consumers, producers and government of the two countries for export of dried date under the following two scenarios, i.e, when normal trading relations between Pakistan and India will be restored and when there will be a free trade between Pakistan and India in the presence of South Asian Free Trade Agreement (SAFTA). Following the analytical framework discussed by PO managerial (20001) , we employ the simplified static analysis for individual industries to instigate the welfare gains or losses. Packing: Graded dates are packed in clean, new fiber board cases lined with perforated polyethylene bags. Cross dividers are optional. All packaging material meets the standards of for grade packaging. Each carton is passed through metal detectors before and after being finally sealed. Higher Standards: Date factories in Therhi are maintaining international standards of cleanliness, hygiene and quality control. One of these factories has even achieved ISO9000 certificate of quality control. The factory is totally neat and clean. The entire processing area is fly-free zone. The company has installed Glue Board fly-killers in the factory. The device attracts catches and kills insects, including flies, wasps, mosquitoes and www.ccsenet.org/ijbm
doi:10.5539/ijbm.v6n5p171 fatcat:5isk5vzr4bcxzkn4tmgdomlg4y