This note discusses the role that import duties have in Pakistan’s economy, and their links with export competitiveness. Import duties play two key roles. First, they are a source of tax revenues for governments. Second, when imposed on a product, they create a wedge between its world price,...

Global value chain participation affects the exchange rate pass-through to export prices and export volumes. The paper develops a partial equilibrium model of international trade with cross-border production and shows that higher participation in global value chains reduces the elasticities....