Abstract
Using a newly constructed data set, this chapter analyses world trade during 1995–2015, with the world divided into seven major regions. Manufacturing represents about two-third of imports for all regions, but for exports, Asia (on the rise), Western Europe and North America are the factories of the world. The remaining four regions, and more than half the world’s nations, rely on commodity exports, and this book aims to include these in the analysis of trade policy. Commodity trade is more “globalised” than manufacturing trade. About three-fourth of world trade is within or between the three manufacturing regions, and much of this is two-way trade in manufacturing. Influenced by rising commodity prices, the share of two-way manufacturing trade in world trade declined considerably during 1998–2012.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Notes
- 1.
Data were downloaded on 18 August 2017, using the WITS software/search engine.
- 2.
A technical issue is that import data are reported “cif” (with cost, insurance and freight included) whereas exports are reported “fob” (free-on-board and without these costs). The import value should therefore be somewhat higher than the export value of the same bilateral trade flow. When constructing mirror data, we use the rule of thumb often applied by the IMF (International Monetary Fund) in their balance of payments data; the import value is 10% larger than the export value.
- 3.
In the charts and tables, we often use abbreviations such as West Europe, East Europe, North Am, etc., in order to save space.
- 4.
Brülhart used the SITC1 vintage of this classification. The latest version (SITC4) has 263 and 2970 categories at the three- and five-digit levels, respectively.
- 5.
Brülhart finds that global IIT in 2006 was 27% at the five-digit level and 44% at the three-digit level. With our measure, we obtain global IIT at 43%.The reason why this is lower than Brülhart’s three-digit result is likely that we do not include two-way trade for non-manufacturing products.
- 6.
For the EU-27 and Japan, Domit and Shakir (2010, p. 185) show that the share of intermediate components in goods imports increased during the period 1999–2009, reaching a share above 50% for Japan and above 60% for the EU.
- 7.
IMF Primary Commodity Prices, all commodities and energy, 2005=100. Available at http://www.imf.org/external/np/res/commod/index.aspx.
- 8.
See, for example, “Brexit: UK should make a ‘clean break’ from the EU , says James Dyson”; The Independent, 14 September 2017.
References
Balassa, B. (1966). Tariff Reductions and Trade in Manufactures among Industrial Countries. American Economic Review, 56, 466–473.
Brülhart, M. (2009). An Account of Global Intra-industry Trade, 1962–2006. The World Economy, 32(10), 401–459.
Domit, S., & Shakir, T. (2010). Interpreting the World Trade Collapse. Bank of England Quarterly Bulletin, 50, 183–189.
Grubel, H., & Lloyd, P. J. (1975). Intra-industry Trade. London: Macmillan.
Harvey, D. I., Kellard, N. M., Madsen, J. B., & Wohar, M. E. (2010). The Prebisch-Singer Hypothesis: Four Centuries of Evidence. Review of Economics and Statistics, 92(2), 367–377.
Krugman, P. (1980). Scale Economies, Product Differentiation, and the Pattern of Trade. American Economic Review, 70(5), 950–959.
Loungani, P., Mishra, S., Papageorgiou, C., & Wang, K. (2017). World Trade in Services: Evidence from A New Dataset (IMF Research Department Working Paper WP/17/77). Washington, DC: International Monetary Fund.
Melchior, A. (2012). World Trade 1970–2010: Globalization, Reallocation and Regionalization (Working Paper No. 805). Oslo: Norwegian Institute of International Affairs. https://brage.bibsys.no/xmlui/handle/11250/277242.
Timmer, M. P., Erumban, A. A., Los, B., Stehrer, R., & de Vries, G. J. (2014). Slicing Up Global Value Chains. Journal of Economic Perspectives, 28(2), 99–118.
WTO. (2011). World Trade Report 2011. The WTO and Preferential Trade Agreements: From Co-existence to Coherence. Geneva: World Trade Organization.
WTO. (2017). World Trade Statistical Review 2017. Geneva: World Trade Organization.
Author information
Authors and Affiliations
Rights and permissions
Copyright information
© 2018 The Author(s)
About this chapter
Cite this chapter
Melchior, A. (2018). A Portrait of World Trade. In: Free Trade Agreements and Globalisation. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-92834-0_2
Download citation
DOI: https://doi.org/10.1007/978-3-319-92834-0_2
Published:
Publisher Name: Palgrave Macmillan, Cham
Print ISBN: 978-3-319-92833-3
Online ISBN: 978-3-319-92834-0
eBook Packages: Economics and FinanceEconomics and Finance (R0)