Why does a country trade with another?
- Countries trade because they gain in the process. International trade allows countries to widen their marketplace for both products and services, which may not have been accessible to them if not for trade; trading worldwide between countries enables consumers and nations to be introduced to products and services unavailable in their own country.
- International trade not only gives an outcome in the form of an increased efficiency but also enables nations to engage in a global economy, uplifting the scope of foreign direct investment (the investment by individuals into foreign companies and their assets/stocks)
Significance of Trade Relations between countries
- Long term trading is beneficial in the longer run; it strengthens the bond between the trading countries. The healthier the relations are between two particular nations trading, the more beneficial it will be to the people of those countries (besides the economy).
Examples
- For instance, Pakistan has had trading links to a number of countries – China, by far, is the largest supplier of goods and services in Pakistan, followed by UAE, KSA, USA and Indonesia.
The relations between Pakistan and China dates back to 1950 and while the Pak-China trade has had its highs and lows, it turned out to be more beneficial than anything else as in 2019, imports from China stood at US $12.7 billion and exports from Pakistan to China stood at US $1.85 – the bilateral trade between both nations succeeded because of primarily having a strengthened bond between them and the willingness to keep good relations.
- Another example being the relations of Pakistan-Canada; Canada is one of the few leading countries safety-wise, education-wise and known for having a good standard of life with a perfectly stable economy, being multi-cultural and with negligible racism and more care between the people. In 2017, Pakistan was Canada’s 29th largest exporter destination for merchandise, with Canada-Pakistan bilateral trade reaching $1.04 billion. Focal point here are the good relations between Canada and Pakistan, where Prime Minister Imran Khan and Canadian Prime Minister Justin Trudeau would exchange greetings and praises.
Obtaining the Canadian Study Permit through a passport such as Pakistan’s was almost impossible, given the Pakistani Passport’s world-ranking which isn’t much impressive at all. In June 2019, a total of 58 out of 60 study permits were denied by the Canadian Visa Officers for students willing to study in Canada from Pakistan. Later on in 2019, the good relations through trade between Pakistan and Canada convinced the Canadian Government to include Pakistan as a fast-track study permit receiving country, making it easier than ever for students from Pakistan willing to study in Canada.
- A unique project by Pakistan to make efforts for the betterment of trading is as followed:
PABOCCI: Pak-Benelux Overseas Chamber of Commerce and Industry
- Pak-Benelux (Belgium, Netherlands, Luxembourg) is an endeavor to strive for diversification of trade relations between Pakistan and Benelux countries; it is aimed to advance business and trade relations between this group of countries by facilitation and provision of up-to-date and relevant data as well as background knowledge.
- PABOCCI shall also include technology and culture changes.
- It will allow the differences in the standard of living in Pakistan to be improved through technology which can be majorly advantageous to Pakistan e.g. latest technology machinery, car imports, electrical appliances etc.
- It will also allow resource endowment – referring to the skills and abilities of Pakistan’s workforce to Benelux countries (which can be majorly beneficial to them) and export of natural resources of Pakistan to Benelux countries
- PABOCCI scheme exchange has the potential to overcome environmental and agricultural challenges in Pakistan as well with European expertise.
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