Who Trades the Most? - “Emerging Markets” in general are catching up to, or surpassing, the developed countries
- In GDP, trade, and more
- See Economics Focus from The Economist, “Why the Tail Wags the Dog”
Who Trades with Whom? ($ b., 2013, Intra- and inter-regional merchandise trade)
Source: WTO, International Trade Statistics, 2014, Table I.4
| |
Destination:
| | | | | | |
Origin:
| |
North Amer.
|
Latin Amer.
|
Eur.
|
Asia
|
Africa
|
Other
|
North Amer.
| |
1189
|
216
|
368
|
501
|
40
|
97
|
Latin Amer.
| |
178
|
195
|
121
|
178
|
20
|
27
|
Europe
| |
506
|
129
|
4560
|
667
|
222
|
473
|
Asia
| |
1012
|
191
|
855
|
3076
|
188
|
399
|
Africa
| |
54
|
30
|
216
|
160
|
97
|
20
|
Other
| |
143
|
20
|
549
|
841
|
51
|
310
|
World
| |
3082
|
782
|
6669
|
5423
|
618
|
1326
| North America, Europe, and Asia trade mostly within their group - North America, Europe, and Asia trade mostly within their group
- Poorer regions – Latin America, Africa – trade mostly with the richer regions
- This reflects what is not so clear in the table:
What Does the World Trade? ($ b. 2013 & annual % growth rates, merchandise exports)
Source: WTO, International Trade Statistics, 2014, Table II.1
| |
Value
|
00-05
|
05-13
|
2009
|
2010
|
2011
|
2012
|
2013
|
All Products
|
17,590
| | | | | | | |
Agriculture
|
1,745
|
9
|
9
|
–12
|
15
|
22
|
0
|
6
|
Fuel&Mining
|
3,997
|
16
|
10
|
–36
|
33
|
35
|
2
|
–3
|
Manuf.
|
11,848
|
9
|
6
|
–20
|
19
|
15
|
0
|
3
| What Does the World Trade? - Biggest traded category: manufactures
- Fastest growing, then shrinking, then growing: “fuels & mining”
Why? - Because this is the value of trade, and prices of oil and other raw materials were rising, and then falling.
- But within Manufactures, Iron & Steel is even more volatile:
What Does the World Trade? ($ b. 2013 & annual % growth rates, merchandise exports)
Source: WTO, International Trade Statistics, 2014, Table II.1
Reason: Very sensitive to investment, thus to expansion and contraction.
| |
Value
|
00-05
|
05-13
|
2009
|
2010
|
2011
|
2012
|
2013
|
All Products
|
17,590
| | | | | | | |
Agriculture
|
1,745
|
9
|
9
|
–12
|
15
|
22
|
0
|
6
|
Fuel&Mining
|
3,997
|
16
|
10
|
–36
|
33
|
35
|
2
|
–3
|
Manuf.
|
11,848
|
9
|
6
|
–20
|
19
|
15
|
0
|
3
|
Iron & Steel
|
454
|
17
|
6
|
–45
|
30
|
25
|
–8
|
–6
| What Does the World Trade? ($ b. 2013 & annual % growth rates, merchandise exports)
Source: WTO, International Trade Statistics, 2014, Table II.1
| |
Value
|
00-05
|
05-13
|
2009
|
2010
|
2011
|
2012
|
2013
|
All Products
|
17,590
| | | | | | | |
Agriculture
|
1,745
|
9
|
9
|
–12
|
15
|
22
|
0
|
6
|
Fuel&Mining
|
3,997
|
16
|
10
|
–36
|
33
|
35
|
2
|
–3
|
Manuf.
|
11,848
|
9
|
6
|
–20
|
19
|
15
|
0
|
3
|
Iron & Steel
|
454
|
17
|
6
|
–45
|
30
|
25
|
–8
|
–6
|
Automotive
|
1,348
|
10
|
5
|
–31
|
29
|
18
|
1
|
4
|
Note too: Trade in cars is more than 10% of trade in manufactures, and also volatile.
What Does the US Trade? ($ b. 2011) | |
Exports
|
Imports
|
Total
|
1,497.4
|
2,235.8
|
Agriculture
|
140.0
| |
Petroleum
| |
462.3
|
Industrial supplies
|
496.4
|
319.8
|
Capital goods, exc. auto
|
493.2
|
513.4
|
Automotive
|
133.1
|
255.2
|
Other non-ag
|
234.6
| |
Other non-petrol
| |
685.1
|
Source: Economic Report of the President, Feb 2013, Table B-104.
What Does the US Trade? - US imports are much larger than US exports
- (We’ll see what that means later in the course.)
- US is a big…
- Exporter of agricultural products
- Importer of oil
- Exporter and importer of capital goods (i.e., machines for making things)
Importance of Trade for Countries? (GDP in US$ b., Exports % of GDP, Selected countries, 2012) | |
GDP
|
Exports/GDP
|
United States
|
16720
|
9%
|
Japan
|
5007
|
14%
|
Germany
|
3593
|
42%
|
Canada
|
1825
|
25%
|
India
|
1670
|
19%
|
Mexico
|
1327
|
28%
|
Netherlands
|
722
|
80%
|
Singapore
|
296
|
139%
|
Philippines
|
272
|
17%
|
Nepal
|
19
|
5%
|
Source: CIA World Fact Book
Importance of Trade for Countries? - Even though we trade more than most, US trade is a smaller part of US GDP than for many other countries
- Others that are low: Japan, Nepal (even lower than US)
- Note Singapore: Exports can be more than GDP.
- Reason: Exports are made using imported inputs, so value of exports includes imports.
Importance of Trade for Countries? A Few More of Interest | |
GDP
|
Exports/GDP
|
China
|
9330
|
24%
|
Hong Kong
|
272
|
168%
|
Korea, South
|
1198
|
47%
|
Korea, North (2009)
|
28
|
7%
|
Burma
|
59
|
15%
|
Syria
|
65
|
6%
|
Israel
|
273
|
22%
|
Source: CIA World Fact Book
Lecture 4 - “Globalization”
- Elements of the World Economy
- Ways that Countries Interact
- Trade
- Capital Flows
- Migration
- Policies that Affect Others
The World Economy - Ways that countries interact economically
- Capital Flows
- Financial (holdings of financial assets abroad)
- Real (international ownership of real assets)
The World Economy - Ways that countries interact economically
- Capital Flows
- Financial (holdings of financial assets abroad)
- Currency
- Bank deposits
- Bonds – private and government
- Stocks
- Bank loans
- Real (international ownership of real assets)
The World Economy - Ways that countries interact economically
- Capital Flows
- Financial (holdings of financial assets abroad)
- Real (international ownership of real assets)
- Real estate
- Capital assets (plant and equipment)
- Stocks (equities) if ownership share is large
- Other
Data, below, are stocks (i.e, amounts at a point in time)
Source: Economic Report of the President, Feb 2013, Table B-107
| |
We “Own”
US Assets Abroad
|
We “Owe”
Foreign Assets in US
|
Total
|
16.43
|
20.58
|
US Gov’t
|
0.71
|
4.28
|
Private financial
|
11.03
|
13.40
|
Private real
|
4.68
|
2.91
|
Compare: US GDP in 2012 = $16.02 trillion
US Investment Position - (Qualification: “Owe” isn’t quite right. This includes all assets in the US owned by foreigners, including land, buildings, etc. Not just what we’ve borrowed.)
- Lessons:
- US is a large net “debtor” (result of our spending more than we earn)
- Most of this today is government, but some is private
Lecture 4 Overview of the World Economy - “Globalization”
- Elements of the World Economy
- Ways that Countries Interact
- Trade
- Capital Flows
- Migration
- Policies that Affect Others
The World Economy - Other ways that countries interact economically
- Migration
- Temporary
- Guest workers
- Day workers
- Permanent
- In practice, most (all?) countries limit migration severely
Lecture 4 Overview of the World Economy - “Globalization”
- Elements of the World Economy
- Ways that Countries Interact
- Trade
- Capital Flows
- Migration
- Policies that Affect Others
The World Economy - Other ways that countries interact economically
The World Economy - Other ways that countries interact economically
- Policies that affect other countries
- Direct
- Trade policies (tariffs, quotas)
- Foreign aid
- Capital controls
- Exchange rate management
- Immigration restrictions
- Indirect
The World Economy - Aside on Tariffs
- We will be dealing a lot with these
- See reading by Hufbauer and Grieco:
- US tariffs are much lower than they used to be (average 4% now, vs. 40% in 1946)
- US has gained a great deal from lowering tariffs
- US still has much to gain from further lowering
- But there are also severe costs for some people and firms who compete with imports
The World Economy - Aside on Tariffs
- Tariffs could go up:
- WTO enforces only upper limits on tariffs
- Actual tariffs in many countries are below these limits, and could legally rise
- There was danger that the recent world recession would push countries to do that.
- They didn’t – at least not much.
The World Economy - Aside on Tariffs
- 45% of US exports go to developing countries
- US tariffs are much higher against developing countries than against developed countries
The World Economy - Other ways that countries interact economically
- Policies that affect other countries
- Indirect
- Subsidies (esp. agriculture)
- US farm subsidies > foreign aid (see CGD reading)
- Macro policies (monetary, fiscal)
- Environmental policies
- Standards
- Labor
- Health & safety
- Norms
Next Time - Institutions of the International Economy
- What are they?
- The WTO
- The IMF
- The World Bank
- The OECD
- What’s happening (or not happening) now?
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