LAHORE: In times of global economic uncertainty, when headlines are dominated by large-scale layoffs and sluggish growth, policymakers face mounting pressure to ‘protect’ domestic industries. In the long run protectionism ruins the economy.
Trade should not be reduced to a political slogan or a simplistic jobs-versus-imports debate. Export-oriented firms are already proving they can deliver not just higher wages but also safer, fairer and more innovative workplaces. Countries that embrace openness, encourage compliance, and pair trade with social policies will not only create better jobs but also secure long-term economic resilience.
History teaches a sobering lesson: countries that retreated into protectionism — from the Great Depression of the 1930s to Argentina’s trade restrictions in the early 2000s — ended up with higher unemployment, declining competitiveness, and greater inequality.
Instead, the path to job creation and better livelihoods lies in expanding exports. Free trade, while not a magic wand, has repeatedly proven to improve productivity and create higher-quality jobs, especially in export-oriented industries.
Across the globe, exporters consistently outperform firms serving only domestic markets. Studies from the World Bank and OECD show exporters pay 30-40 per cent higher wages than non-exporters. In South Asia, this wage premium is even more pronounced, as exporters often invest in skills, technology, and workplace conditions to meet international standards.
Bangladesh’s apparel industry where wages remain modest by global standards, exporting factories that supply to brands like H&M or Nike provide cleaner facilities, enforce strict safety protocols, and offer regular skills training — changes driven largely by foreign buyers after disasters like the 2013 Rana Plaza collapse. Similarly, in Pakistan’s surgical goods sector in Sialkot, exporters have modernized production lines and adopted ISO certifications, making these firms both more competitive and more attractive to workers.
Exporters are often required by global buyers to follow stringent standards on labour rights, environmental sustainability, and workplace safety. Non-compliance can lead to immediate order cancellations. While these standards may seem like added costs, forward-looking exporters have turned them into advantages.
Factories investing in worker well-being — from protective gear to childcare facilities — report not only higher productivity but also lower turnover, reduced absenteeism, and stronger brand reputations. This explains why exporters who also sell domestically often outperform their purely local competitors, quickly gaining market share at home. In textile all leading exporters of Pakistan command a larger share in the domestic market as well.
Critics of globalisation sometimes argue that if exports create jobs, imports must destroy them. This view overlooks a crucial fact: imports bring in raw materials, advanced machinery, and technology that make exporters more competitive. For example, Vietnam’s electronics exports surged only after the country liberalized imports, allowing firms like Samsung to integrate local production into global supply chains.
Thus, both imports and exports are vital in strengthening a nation’s industrial base, raising productivity, and securing long-term employment.
While open markets are essential for growth, trade cannot by itself guarantee social justice. Countries like Denmark and South Korea demonstrate that the benefits of trade are maximized when complemented by robust safety nets for workers displaced by economic shifts; strong labor rights that protect bargaining power and continuous retraining programs to help workers adjust to evolving industries.For Pakistan, this means that investing in export competitiveness must go hand in hand with strengthening worker protections and education systems.
