Pakistan’s foreign trade balance has always been negative throughout its economic history except during few years. In the first year after independence the country faced huge economic problems and as a result no attention could be paid to industrial sector development. In 1972-73, Pakistan had a surplus balance of trade after 21 successive yearly deficits . The success achieved in 1972-73 was the result of deliberate policy actions including and promotion measures. This surplus partly as a result of a sharp increase in the volume and value of exports and partly due to slower increase in imports. Besides the said financial years, Pakistan has never achieved positive trade balance.Before discussing advantage of trade for Pakistan I would like discuss two types of Gains which Pakistan could enjoy1- Static Gains: Static gains arise from optimum use of the country’s resources in men , money and material , so that the national output is maximized resulting in increase in social welfare. International specialization and geographical division of labor leads to the optimum allocation of world’s resources, making it possible to make the most efficient use of them. optimum allocation is designed to provide the most precision for the least cost.2-Dynamic Gains: On the other hand, refer to those benefits which promote economic growth of participating countries. They relate to economic growth and development which results from the introduction of international trade. There is no doubt that international trade has accelerated economic growth in the participating countries like Pakistan.International trade increases national income and facilities opens out new channels of investment. Increase in saving and investment is bound to promote economic growth. Export earn foreign exchange which can be utilized in buying capital and equipment for example, Pakistan exports rice, cotton and cotton textile, leather and leather goods, and sports goods and in exchange she imports heavy engineering machines and tools, trucks and other capital equipment. When there is imports and exports of goods and services, the government of Pakistan can earn the revenue in form of tariffs, custom duty, import license fees etc. So we can say that foreign trade can a good source of public revenue for Pakistan. It is essential for the development of the country. There is a shortage of all kinds of professionals like engineers, architects, doctors, managers, accountants, economists and other technical personnel in an under developed country. So an under developed country like Pakistan can allow the inflow of technical brains from developed countries like UK. The external sector of Pakistan has also opened the employment opportunities for the countrymen in the foreign countries. We know that hundreds of Pakistanis are working abroad and because of them Pakistan is earning billions of dollars through foreign exchange remittances. Such remittances are proved to be a major source of foreign exchange earnings. Through this Pakistan can invest for the development of various internal sectors for example industries, agriculture etc. The domestic market of Pakistan is limited, the foreign trade sector can open new marketing channels and new markets which can help to extend the scope of the business to the international market because when the markets are extended, the economies of scale are reaped, and productivity will increase. So the forces of development in Pakistan will set themselves in motion.Normally the foreign investors are attracted towards active trading countries and like to invest in the form of capital goods and technical expertise. So we can say that the foreign trade is also helpful for Pakistan in attracting foreign investment. That is why our investment agreements with China, USA, UK, South Korea, Sweden, Hong Kong, Saudi Arabia and UAE will be helpful in promoting trade in the country. Pakistan is in emergent need to promote her exports. During the past fifty years Pakistan has shown poor performance in her exports growth. Although Pakistan has shown a considerable achievements during the past five years but still we need more than hundred percent increase in our exports. For this we can simply suggest that Pakistan has to improve international trade to catch-up with other Asian countries like South Korea, India, Malaysia etc. For this purpose, the first step it need to take is the promotion of private sector. Private sector must improve its competitiveness by employing state of the art machinery, through better management and also by improving their working environment. They can easily take the steps because it have a comparative advantage in terms of relatively cheap labor, relatively low cost of capital, a strong macro-economic environment, relatively low inflation and strong growth.For promoting foreign trade government of Pakistan can take few steps. The first and the important step is that the government should provide a strong microeconomic environment- an environment where exchange rate is stable ; a comfortable foreign exchange reserves; low cost of capital; and low transparent macroeconomic policies. The second step is to provide strong infrastructure , transport and communication, roads and highways, power , well functioning ports etc. Another important step for development of trade by the govt. is that it should enter into active trade diplomacy. We have to explore the possibilities by joining various Preferential Trading Agreements, and have to enter into bilateral negotiations at all levels for free trade agreements. The Government of Pakistan should take steps to energize the women entrepreneurship in support of developing and realizing Pakistan’s export capabilities and potential and enhance overall economic value addition. Women’s participation is very essential for the progress of a developing country because Pakistan’s half of the population consists of women. The other step that should be taken by government is that it should improve the Pakistan’s business image. All countries have their strength and weaknesses and success depends upon efficient, capitalization of strengths and management of weaknesses to provide an honest and positive business image. For this purpose, the skills, training/technical facilities be enhanced amongst all stake holders specially the exporters and financial institutions etc.Pakistan should work for the development of small and medium enterprises because the success of Pakistan’s exports must heavily rely on the strength of her small and medium size exporters, efforts of SMEDA, must help to enhance the exporting and marketing capacity of the SME’s inclusive of adequate finance through the relevant financial institution i.e. state bank of Pakistan. Another step that can improve the foreign trade of Pakistan is the transparent access to finance for the desired significant increase in export. Sufficient accesses at internationally competitive markups would need to be insured.Although Pakistan has many weaknesses in trade, yet Pakistan’s foreign trade is improving day by day. Pakistan has bilateral and multilateral trade agreements with many national and international organizations for example it’s a member of the WTO ( World Trade Organization) and the China-Pakistan free trade agreement. Fluctuating world demand for its exports domestic political uncertainty, and the impact of occasional droughts on its agricultural production have all contributed to variability in Pakistan’s trade deficit. Pakistan’s exports dominated by cotton and textile, imports, petroleum and petroleum products, chemicals, capital goods, fertilizers and edible oil.So we can say that although Pakistan’s foreign trade is improving day by day yet it is in emergent need to promote a foster her exports because during the past fifty years, Pakistan has shown poor performance in her export growth especially if we compare it to other Asian countries. It took ten years during 1980s to add an amount of just $2 Billion towards her export and it is an alarming situation for the country. Now I will take foreign trade of united kingdom as an example of developed country. As we know that UK,s economy is totally depended on foreign trade. And the UK government is playing a vital role in supporting free and unrestricted trade in their country, that’s why they have championed International trade organization. Because in order to attract foreign investment, the British government has adopted a variety of program. for example, the Parliament allows local and regional government to establish enterprises zones, companies receive exemptions from property taxes and reimbursement for costs involved in the development of new businesses. There are 7 free zones established in the United Kingdom. These stores allow goods to be stored for shipment without tariffs or import duties.For several decades , the United Kingdom has had a trade deficit, as it has imported more goods and services than it has exported. The strength of the British pound and the state of the economy has made the united kingdom an attractive investment area for foreign investors. The kingdom is the world’s second largest destination for investment, because of the attractiveness of the kingdom to foreign investors, new investment capital continues to allow the Britain to fund this deficit because the new investment money exceeds the money that the kingdom loses through its trade deficit. In the 1960s economic growth translated into rising living standards of British and households which were able to purchase a great range of white goods and cars. There was also a revolution in transport. At the start of the 1960’s, a majority of households did not have a private car but by the end of 1960’s car ownership rates had risen.British trade have a very long and impressive history. Have a look how British trade flourished. As we know that the United Kingdom is the ninth largest export economy in the world. Eighteenth century was the period in which Britain rose to a dominant western empire position among European trading and became the first nation to industrialize. In 1698, the British became the largest and most efficient carriers of labours to the new world. Trade and empire went hand in hand, with a symbiotic relationship with each other. An integrated Atlantic economy came into being after the mid 18th century, in which the British, American, west indian and Iberian port merchants established firm commercial ties and a modern, enterprising outlook with regard to making money through imperial trade.Revenue from slavery and the slave trade filtered back into the British economy in indirect ways, with bankers, insurance specialists and country gentlemen all participating as active investors. The ability of the British government to raise taxes and loans to support aggressive military policies by government, and the superiority of the royal navy over other European navies, both played a decisive roles in creating the conditions through which trade and empire could flourish.Pakistan and UK have good trade relations, although Pakistan is a developing market with a young and growing population of around 186 Million, yet over 100 British comapnies are currently doing business in Pakistan, including well known companies such as Standard Chartered, GlaxoSmithKline, Shell, and Unilever. There are several benefits for UK companies exporting to Pakistan• Growing middle class • Similar legal practices• Common business language because Pakistan is the ninth largest English speaking nation• Familiarity with UK companies and brands• Pakistan is the sixth most populous country with over 60% population under the age of 25• Strong business and consumer base • Pakistan is investor friendly country that’s why home to over 600 foreign companies • Educated work force• Low production and labor cost• Links with Pakistani migrant communities in the UK and this strengthens Pakistan market and are providing friendly atmosphere for UK businessmen Now we can easily compare Pakistan’s foreign trade from UK foreign trade. Pakistan is a developing market while UK is a developed country and have an impressive long trade history . It is estimated that Pakistan’s cities generated up to 78% of National GDP while on the other hand only London is the world’s leading financial centre for international business, London generates approximately 22 per cent of the UK,s GDP.More than 50% of Pakistan’s economy is services based, with trade related and communication services among the largest. Industry accounts for nearly a quarter of GDP and includes an export-oriented textile sector, chemicals, food processing, pharmaceutical, medical products, metal ores and scrap metal.While on the other hand, United Kingdom exports machines, engines, pumps, gems, precious metals, vehicles (led by cars and work trucks), pharmaceuticals, oil, electronic equipments, air craft, space crafts, medical and technical equipments, organic chemicals and plastics.Pakistan currently has seven bilateral trade agreements with countries like Afghanistan, China, Iran, Malaysia, Sri Lanka, Indonesia and Mauritius. Pakistan is also a member of the South Asian Free Trade Area (SAFTA), an agreement that aims to establish free trading between its members. On the other hand UK is a large market, so that there is a clear incentive for other countries to negotiate a deal. UK has trade agreements with almost every country. It has bilateral free trade agreements with common wealth countries, US, Australia. Canada, Asian and pacific agreement, China , India ,Japan, New Zealand, Australia.So we can say that UK trade system is more secure and safe as compared to Pakistan trade system. Both countries have good relation and the two sides renewed their commitment to increase their bilateral trade up to three billion pounds within a year. The two sides also discussed the current level of bilateral ties in various areas including trade and economy. UK is providing support and advice on trade . Both countries agreed to work together to improve Pakistan’s trade competitiveness. They agreed to exchange expertise and business dialogue on energy and other fields.So we can say that trade is important for both the developed and developing countries for the progress of their economy and the development of the country.