Cambridge O Level Pakistan Studies: Trade — Revision Notes

These notes cover Section 6 Trade of Cambridge O Level Pakistan Studies 2059 Paper 2 in a form you can recall quickly. The section is short, but it is heavy on definitions and on reading graphs, so learn the terms exactly and practise describing trends with figures. The full explanation is in the Trade study guide.

Syllabus checklist (2059, 2026)

• ☐ 6(a) Name the main exports and imports
• ☐ 6(a) Describe recent changes in the types, amounts and value of exports and imports
• ☐ 6(a) Meaning of GNP and GDP and the difference between them
• ☐ 6(a) Effect of changing trends on the balance of trade and the economy
• ☐ 6(b) Name and locate main partners and the goods traded with each
• ☐ 6(b) Factors promoting or hindering trade; why a developing country struggles to raise its share
• ☐ 6(b) Trading blocs, trade barriers, currency exchange rates

Key terms

Term	Definition
Export	A good or service sold to another country
Import	A good or service bought from another country
GDP	Value of all goods and services produced within a country in a year
GNP	GDP plus income earned abroad by residents, minus income paid to foreigners
Balance of trade	Value of goods exported minus value of goods imported
Trade deficit	When imports cost more than exports earn
Trading bloc	A group of countries that cut barriers to trade among themselves
Tariff	A tax on imported goods
Quota	A limit on the quantity of a good that may be imported
Exchange rate	The price of one currency in terms of another (rupees per US dollar)
Remittances	Money sent home by people working abroad
Value-added	Extra value gained by processing a raw material into a finished product

Numbers to quote (rounded, fiscal year 2023–24)

• Goods exports: about US$31 billion; the textile group a little over half.
• Goods imports: about US$55 billion; fuel the largest single group.
• Trade deficit: roughly US$24 billion.
• Workers’ remittances: about US$30 billion, nearly matching goods exports.
• Rice exports: a record near US$4 billion.
• Exchange rate: about Rs 160 per US$ in mid-2021, about Rs 280 by 2024.

Always write “approximately” and the year; they will change.

Partners in one table

Partner	Exports to it	Imports from it
USA	Home textiles, knitwear	Cotton, soybeans, machinery
China	Yarn, copper, rice, seafood	Machinery, electronics, chemicals, solar panels
UAE	Rice, meat, textiles	Petroleum products
UK and EU	Garments, bed linen, leather, sports goods	Machinery, vehicles, chemicals
Saudi Arabia, Kuwait, Qatar	Food, textiles	Crude oil, products, LNG
Indonesia, Malaysia	Rice	Palm oil
Afghanistan	Food, cement, medicines	Coal, fruit, vegetables

Promote versus hinder

Promotes trade	Hinders trade
GSP+ tariff-free access to the EU (since 2014)	Narrow export base (textiles, rice)
China–Pakistan FTA; SAFTA; ECO	Competition from Bangladesh, Vietnam, India
Ports on the Arabian Sea near Gulf markets	Tariffs, quotas and quality standards abroad
Land links to China and Afghanistan	Costly, unreliable power and gas
Cheaper rupee helps exporters	Dearer rupee-priced imports raise costs
Overseas Pakistani networks	Tension with India limits regional trade

How to describe a trade graph (worked example)

Fig. (illustrative): exports rise from US$25 billion to US$32 billion over five years, while imports rise from US$45 billion to US$80 billion, then fall to US$55 billion.

Trend: both exports and imports rose overall, but imports rose much faster, peaking at US$80 billion before falling to US$55 billion. Figures: exports grew by US$7 billion; the deficit widened from US$20 billion to a peak of about US$50 billion, then narrowed to about US$23 billion. Anomaly: the fall in imports after the peak.

Three moves: overall trend, figures with units, an anomaly or change in direction.

Exam traps

• Mixing up GDP and GNP. GDP is “inside the country”; GNP is “the country’s people and firms, wherever they are”.
• Writing that remittances are exports. They are transfers, not sales of goods; they help the balance of payments, not the balance of trade.
• Saying a weak rupee is simply good. It helps exporters but raises import costs and inflation.
• Two separate lists in a “compare” question. Use “whereas” and match the points.
• Describing a graph without numbers. Quote at least two values with units.

Self-test

1. Define the balance of trade.
2. Give two of Pakistan’s main imports.
3. Which country is Pakistan’s largest single export market?
4. What does GSP+ give Pakistan?
5. Give two reasons Pakistan struggles to raise its share of world trade.
6. Give one benefit and one cost of a falling rupee.

Answers: 1. Value of goods exported minus value of goods imported. 2. Any two of petroleum, machinery, palm oil, chemicals, iron and steel, LNG. 3. The United States. 4. Tariff-free access to the EU for most exports. 5. Any two of narrow export base, competition, trade barriers, high production costs, small firms with little technology. 6. Exports become cheaper abroad; imports and inflation rise.

Frequently asked questions

Is GNP always bigger than GDP in Pakistan? Not necessarily. It depends on whether income earned abroad by Pakistanis is larger or smaller than income paid out to foreign investors, so learn the definition rather than a rule.

Why does the import bill rise when world oil prices rise? Pakistan imports most of the oil and much of the gas it uses, so the same volume costs more foreign currency when prices go up.

What is the difference between a tariff and a quota? A tariff is a tax on imports; a quota is a limit on the quantity that may be imported.

Related resources

• Trade study guide
• Trade practice questions
• Transport and Telecommunications revision notes

Source: Cambridge International, Cambridge O Level Pakistan Studies 2059 syllabus for examination in 2026, Paper 2 Section 6 Trade. Figures are rounded and dated.