TRADE QUESTIONS 2059/02
Compiled by: Mustafa Asif
Trade
a) Major exports and imports
Candidates should be able to:
• name the main exports and imports
• describe the changes in the types/amounts/value of goods exported and
imported in recent years
• know and understand the meaning of GNP and GDP and the difference
between them
• explain the effect of changing trends in exports and imports on
Pakistan’s balance of trade and
economy.
b) Pakistan’s trading partners
Candidates should be able to:
• name and locate Pakistan’s main trading partners, and name the goods
Pakistan exported to them or
imported from them
• understand the factors which may promote or hinder trade with other
countries, and explain why it
is difficult for Pakistan as a developing country to maintain or increase
its share of trade with other
countries
• understand the factors that may promote and limit trade, including
trading blocs, trade barriers and
currency exchange rates.
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TRADE QUESTIONS 2059/02
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O/N18/P2/Q3(B, C and D)
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TRADE QUESTIONS 2059/02
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O/N17/P2/Q2(B)
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TRADE QUESTIONS 2059/02
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TRADE QUESTIONS 2059/02
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M/J17/P2/Q3(A AND C)
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TRADE QUESTIONS 2059/02
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O/N16/P2/Q2(C)
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TRADE QUESTIONS 2059/02
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O/N15/P2/Q4
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TRADE QUESTIONS 2059/02
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TRADE QUESTIONS 2059/02
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TRADE QUESTIONS 2059/02
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TRADE QUESTIONS 2059/02
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M/J15/P2/Q4(c and d)
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TRADE QUESTIONS 2059/02
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O/N11/P2/Q3(D AND E)
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TRADE QUESTIONS 2059/02
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TRADE QUESTIONS 2059/02
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Answer Key-Mark Scheme
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O/N17/P2/Q2(B)
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TRADE QUESTIONS 2059/02
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M/J17/P2/Q3(A AND C)
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TRADE QUESTIONS 2059/02
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O/N16/P2/Q2(C)
(c) (i) Name two of Pakistan’s main exports. [2]
Linen / textiles / clothing / men’s suits / bed linen
Raw cotton / cotton yarn / cotton products
Carpets / tents /rugs
Rice
Refined petroleum / oil
Cement
Leather / leather products / named leather product e.g. shoes
Sports goods
Surgical instruments
Chemicals
(ii) Read the following article:
Pakistan produces many goods that could be exported in greater quantities. For a
variety of reasons the amount of exports remains low: in 2013 the value of exports was
only 13% of GDP.
Explain why it is difficult for Pakistan to sell more of its goods to other countries.
[4]
Challenging to compete with foreign / larger companies / producers (accept an example,
e.g. Egypt – textiles)
Quality of items (lack of access to / high cost of raw materials / machinery)
Child labour causes barriers to trade (e.g. EU)
Limited management expertise in the export industry
Other countries have trade barriers / tariffs / quotas / restrictions (to protect their own
industries / markets)
Relations with some other countries restricts trade
Pakistan government may have trade barriers with other countries (e.g. China – on
cheap imported goods)
Maximum of 2 + 2 (mark + development mark)
M/J16/P2/Q5(b)
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TRADE QUESTIONS 2059/02
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M/J16/P2/Q5(b)
(b) (i) What are Export Processing Zones (EPZs)? [1]
Areas which have government support/are joint ventures with foreign investors / attract
foreign capital for export-orientated manufacturing/assembling industries
(ii) Describe the features of an EPZ. [3]
Industrial estates
Named e.g. Port Qasim/ Sialkot/ Faisalabad/ Gujranwala/ Risalpur/ Saindak/ Duddar/
Gwadar / Karachi
Exemption of duties on imported raw materials/machinery
Tax holidays/exemptions/subsidies
Export quality control
Provision of named infrastructure e.g. telephone/electricity/water/gas/roads Max 1
Provided with security
Attracts hi-tech development
O/N15/P2/Q4
4 (a) Study Fig. 7, which gives information for the Gross Domestic Product (GDP) of
Pakistan in 1992 and 2012.
(i) What is meant by the term Gross Domestic Product (GDP)? [1]
Annual sum/total value of all output/goods and services produced within a country
Income generated by a country’s own workers and resources
(ii) A. What percentage of GDP came from services in 2012?
B. What might be included in the category ‘other industry’?
C. State whether the share of GDP from the following has increased, decreased,
or stayed the same in the period from 1992 to 2012: Agriculture Manufacturing
industry [3]
A. 53–54%1 mark
B. Mining/construction/power/fishing/forestry 1 mark Not list rule
C. Agriculture decreased: manufacturing increased Both to be correct for 1 mark
(b) Study Fig. 8, which shows the value of exports and imports in Pakistan in 2011.
(i) Name a textile product exported by Pakistan. [1]
Garments/bed linen/cotton cloth/cotton yarn/carpets/rugs/suits/towels/fabrics Use list rule
(ii) How much greater is the total value of all imports than the total value of all
exports? [1]
8290 US$
(iii) Use Fig. 8 to describe three differences between goods Pakistan exports and
imports. [3]
Animal products/leather exported but not imported
Edible fats and oils/vehicles and transport imported but not exported
Vegetable products/textiles and textile products (much) more exported than imported
Metals more imported than exported
Mineral products/ chemicals /machinery and instruments much more imported than
exported
Value of imported goods more balanced/evenly spread than exported goods
Mainly exports primary goods but mainly imports manufactured goods
High value/low value goods = 0
Only accept complete comparisons of exports with imports (and like with like)
(iv) Explain two problems for Pakistan’s economy caused by the differences you have
described in your answer to part (iii). [4]
Narrow export base/overdependence on a few export items (so if low production e.g.
poor harvests, no surplus/profit)
Main export/import items subject to world price fluctuations/vagaries of commodity
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TRADE QUESTIONS 2059/02
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market (e.g. oil, cotton, rice) (so some years there may not be a profit/economy goes into
debt/has not surplus)
Exports are largely low value-added products which do not earn a great deal/great deal
of foreign exchange [from small and cottage industries] (so other countries benefit more
when add value)
Exports are items subject to high competition in the world market (so may not find a
market)
Lack of quality control of export items (so may lose orders)
Production of main agricultural export items is subject to variations in weather and
effects of pests (e.g. poor cotton crop due to unfavourable weather/virus/lack of
rainfall/frost etc.)
Imports are mainly high value-added products and therefore expensive (such as
manufactured goods/capital goods/luxury goods)
Food (e.g. wheat) has to be imported that could be grown in Pakistan
Importing consumer good which harms Pakistan industry (named consumer
goods/industry)
Value of imports are greater than the value of exports (causing negative balance of
payments).
Award second mark per line for explanation (parentheses show examples)
Two problems explained @ 2 marks each
(c) (i) State one main trading partner with Pakistan for each of exports and imports. [2]
Exports: USA/UAE/Afghanistan/China/UK/Germany/EU
Imports: China/Saudi Arabia/UAE/Kuwait/USA/Japan/EU
2 × 1 mark
(ii) Describe a method of transport that could be used for trade with one of the
countries stated in your answer to part (i). Suggest the benefits of using this
method of transport. [4]
• Ship/by sea (1), shorter link to European markets, freight costs low/cheap, modern
port facilities especially for containers/bulk cargo/oil, Middle East readily accessible,
ports are warm water and open all year
• Aeroplane/by air (1), effective for low volume/lightweight goods, very quick,
useful for perishable/high value goods, e.g. fruits and vegetables Fragile/delicate
goods = 0
• Truck/lorry/by road (1), link to China/Iran/Afghanistan/India, useful for smaller
consignments, e.g. electronics/medicinal herbs/Chinese fabrics/decorative
items/toys/cotton textiles/dried fruits/hosiery, useful for perishable/high value goods
• Train/by rail (1), link to Iran, cheaper for long distance, useful for bulky/heavy goods,
e.g. food grains/cotton/oil/fertiliser/heavy machinery, effective for low value goods
1 mark for method of transport
3 marks for any three benefits listed
Marks are for transporting/handling goods
Easy/easier, references to safety = 0
(d) ‘There are more factors that hinder trade between Pakistan and other countries
than
factors that help trade.’
To what extent do you agree with this view? Give reasons and use examples you have
studied to support your answer. [6]
Indicative content (development of points/place-specific detail/examples in parentheses)
Hinder
Lack of security/internal civil and tribal unrest/terrorism
Political instability/inconsistent government policies
Debt/imbalance of trade (leads to need for loans/foreign economic assistance and possible
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trade embargo if default)
International tension (e.g. with India, historically since partition 1947 and periodically over
Kashmir so no significant trade with India has developed).
Mountainous terrain to NW. (Passes to Afghanistan e.g. Khyber, Kurram, and Khojak subject
to border tensions, landslides, and avalanches.)
Trade barriers/embargoes from industrialised countries (which express concerns about child
labour/health and safety/hygiene/environmental standards such as excessive use of
pesticides on cotton).
Membership of regional organisations (e.g. ECO/SAARC/WTO in 2004) (involves removing
import tariffs causing inflow of cheap imports)
Devaluing Pakistan rupee (makes imports, which are more than exports, more expensive)
Help
Improvements to transport infrastructure, (e.g. Karakoram Highway/new road Quetta to
Chaman, Afghanistan/upgrade to RCD Highway to open a route to Iran and Turkey)
Development of ports (particularly Karachi/Bin Qasim port for containers and bulk cargo/
Gwadar port/Makran Coast)
Membership of regional organisations (e.g. ECO/SAARC/WTO in 2004) (in which member
countries benefit from access to major world markets)
Tax incentives for exporters
Export Promotion Bureau/Trade Development Authority of Pakistan/Export Processing
Zones
Devaluing Pakistan rupee (makes exports cheaper)
[Total: 25]
M/J15/P2/Q4(c and d)
(c) (i) Name or describe a border crossing by road between Pakistan and a
neighbouring
country. Which country is linked to Pakistan by this road? [2]
border crossing country
Koh-i-Taftan/RCDHighway Iran
Chaman/Quetta to Kandahar Afghanistan
Khyber pass/Grand Trunk Road Afghanistan
Khunjerab Pass/Karakoram Highway China
Lahore to Amritsar/Grand Trunk Road India
ii) How useful is the border crossing you have named or described in (i) for trade?
Give reasons for your answer. [4]
* Very useful/great importance
Encourages/improves/increases – trade/
import/export/foreign exchange
E.g. example named export/import
Cheaper transport/shorter distance to
travel/saves time
Improved relations/better relations
*Of very little or limited use/little
importance
Routes into Iran/Afghanistan are
mountainous/deserts
Security issues/tensions in FATA areas
E.g. Khyber Pass closed
Karakoram Highway blocked/closed in
winter
Due to snow/avalanches/landslides
Poor trading relations with India
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TRADE QUESTIONS 2059/02
Compiled by: Mustafa Asif
(d) There are advantages and disadvantages to Pakistan of trading with different
countries or groups of countries. Read the following two views:
1. Pakistan would benefit from stronger trade links with China.
2. There are more advantages to Pakistan in maintaining trade with EU (European
Union) countries.
Which view do you agree with more? Give reasons and refer to places or examples
you have studied to support your answer. [6]
China
EU has trade barriers (custom duties and import quotas/tariffs/embargoes) with countries
outside the EU
EU may restrict trade (due to poor law and order situation/terrorism/environmental issues/
child labour/political instability)
Cottage and small scale industry products may lack international quality standard acceptable
to EU
Can avoid reliance/dependence on Western powers
Chinese imports are low-priced (and meet local demand)
China faster growing economy so Pakistan can earn more foreign exchange
Land link with China (Karakoram Highway/Khunjerab Pass)
EU
EU countries politically/economically stable (so fewer changes in market trends)
History of stable trade relations with European countries since independence
China likely to manufacture products that Pakistan exports (in greater quantities/at lower
prices)
Cheap Chinese imports may threaten
Accept converse arguments
O/N11/P2/Q3(D AND E)
(d) Study Fig 6, which shows imports of goods to Pakistan in 2007.
(i) State the percentage of: [2]
Machinery – 65
Electrical goods – 10
(ii) Name two machines that may be used in a craft industry. [2]
Allow any tool as long as it is likely to be mechanical
E.g. sewing machine, drill, lathe, sawing (machine), generator
(iii) Explain the importance of mechanisation to the craft industry and other
smallscale
industries of Pakistan. [4]
Faster
Larger production
Lower labour costs / cheaper
Less work / easy / less tiring
Standardised product / better quality
Can replace child labour
New skills learned
Allow development, e.g.
Faster so that more income can be made because more production
Standardised product so that it is more attractive to buyers
Allow problems, e.g.
Unemployment, loss of traditional skills
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TRADE QUESTIONS 2059/02
Compiled by: Mustafa Asif
(e) The countries of the European Union have a large demand for goods such as
clothes
and sports goods. Pakistan can produce these goods cheaply.
Explain the advantages and disadvantages of developing a trade agreement with
partners in the EU. [4]
Advantages (2 marks)
More exports / can pay off debt / improved trade balance / more foreign exchange (max 1
boosts economy)
Cheaper imports
Better availability
Boosts industrialisation / more factories built / more investment in these industries
Fewer trade barriers / lower taxes
Stable market
Disadvantages (2 marks)
Can be stopped / sanctions
Conditions imposed / ban on child labour
Pakistan goods may not be up to standard
Pakistan production may not be reliable
Imports may compete with local production
May affect other agreements, e.g. Iran, China
Fluctuating currency rates
[Total: 25]
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