Cotton price policy effects on domestic cotton and textile industries, trade, and sectoral economic growth in Pakistan



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Texas Tech University


Government policy affects market outcomes for agricultural commodities. Many countries have long used commodity and trade policy in agriculture to reach national goals. The gains and losses from these policies are evaluated and value judgments are made as to the necessity of the policy (Helmberger, 1991). Attempts have been made to explain this process frdm a positive theory perspective (for example, Krueger, 1974; Swinnen, 1994).

The global economy (led by developed or industrialized countries) has tended toward an increased degree of trade liberalization over the past two decades, e.g.. The World Trade Organization (WTO) and the North American Free Trade Agreement (NAFTA). Trade restrictions, however, are still a pervasive fact of life. Governments of both developed and developing countries have implemented non-tariff trade barriers (NTBs) or have otherwise manipulated market regulations to give advantage to domestic industries (Salvatore, 1993).