SCHOOL OF ECONOMICS AND BUSINESS

UNIVERSITY OF PORTO
1EC305: INTERNATIONAL TRADE
1
International trade in the context of Economics
2
lnLernauonal Lconomlcs
!"#$%"&'("&) +,"&"-$.
focuses on Lhe moneLary
aspecLs of lnLernauonal
economlc relauons
!"#$%"&'("&) #%&/$.
analyzes Lhe Lrade of goods
and servlces beLween
resldenLs of dlerenL
counLrles
Subject that we will study
Main manufacturing producers (2007)
3
The global map of manufacturing production, 2007
Source: Dicken , Peter (2011, p.36), Global Shift (6 Ed.)
Main manufacturing producers(2007)
4
Source: Dicken , Peter (2011, p.36), Global Shift (6 Ed.)
The evolution of the world economy
over the last 60 years
5
! Plgh economlc growLh...
... buL even hlgher growLh of lnLernauonal
Lrade.
! Lxpanslon of lndusLrlallzauon lnLo new areas:
! newly lndusLrlallzed counLrles, especlally ln Asla,
! re-emergence of counLrles wlLh large lndusLrlal
Lradluons ln Laun Amerlca and LasLern Lurope.
! CrowLh of forelgn dlrecL lnvesLmenL (lul).
Globalization
6
! Cloballzauon (economlc):
! lnLerconnecuon of economlc acuvlues on a global
scale:
" 1hrough movemenLs of goods, caplLal and people,
0)(1&),2&'(" represenLs an expanslon of how lndlvlduals and
lnsuLuuons Lrade and exchange wlLh oLhers ln counLrles
oLher Lhan Lhelr own, or lnuence Lhem wlLh Lhelr economlc
and soclal behavlour"
!"#$ #&'()* +,+-. /&01 234435 +067
Growth in world trade, 1960-2008
7
Source: WTO, International Trade Statistics 2010, p.1.
Volume of world merchandise exports, 1990-2012
(index, 1990=100)
Source: WTO, World Trade Report 2013, p.23
The causes
9
! Llberallzauon of world Lrade:
! mululaLeral Lrade agreemenLs (CA11/W1C),
! reglonal lnLegrauon (Lu, nAl1A, Mercosul, ASLAn,
l1AA),
! 8educuon ln LransporLauon cosLs:
! conLalnerlsauon,
! alr Lravel and LransporL.
! 8educuon ln Lhe cosLs of communlcauon and
coordlnauon:
! maLurlLy of older lnformauon Lechnologles,
! new lnformauon Lechnologles.
The causes: liberalization of world trade
10
Source: Dicken , Peter (2011), Global Shift (6 Ed.), Cap. 17
A process that is not new
11
! 1he llnk beLween Lrade and wealLh, and beLween
Lrade and lnnovauon, ls a very old one:
! Caral (ln Loday's eru) ls 3 Lhousand years old, hoenlclans,
8omans,...
! over Lhe lasL 300 years: orLugal, Spaln, 1he neLherlands, uk
! 1he mosL developed economles are noL Loday more
open Lhan before World War l,
! Lven lnLernauonal caplLal ows are noL much hlgher
Loday Lhan 100 years ago:
! even Lhough Lhey span a wlder range of counLrles and
lndusLrles.
but with important differences!
12
! All pasL globallzauon processes were based on Lrade
llberallzauon.
! 1oday, Lhe globallzauon of producuon ls [usL as lmporLanL as Lhe
globallzauon of markeLs:
! expanslon of lndusLrlallsauon Lo new areas:
" lar LasL, CenLral and LasLern Lurope, Laun Amerlca.
! Lhe role of lul
" aer Lhe 1980s buL even more so ln Lhe second half of Lhe 90s,
! deepenlng Lhe processes of economlc lnLegrauon (Lu, nAl1A),
! SLrong growLh ln lnLra-lndusLrlal Lrade:
! value chalns lncreaslngly cross counLrles and conunenLs,
! Puge growLh of lnLernauonal Lrade ln servlces:
! Lhe concepL of non-Lradable secLors ls quesuoned.
Main world merchandise exporters and
importers, 2008
13
Source: Peter Dicken (2011, p.39), Global Shift, (6 Ed.)
Leading exporters merchandise trade, 2012
(billion USD/%)
8ank LxporLers value
1 Chlna 2049 11,2
2 unlLed SLaLes 1347 8,4
3 Cermany 1407 7,7
4 !apan 799 4,4
3 neLherlands 636 3,6
6 lrance 369 3,1
7 korea, 8ep. of 348 3,0
8 8usslan lederauon 329 2,9
9 lLaly 300 2,7
10 Pong kong, Chlna 493 2,7
8ank LxporLers value
1 LxLra-Lu(27) exporLs 2166 14,7
2 Chlna 2049 13,9
3 unlLed SLaLes 1347 10,3
4 !apan 799 3,4
3 korea, 8ep. of 348 3,7
6 8usslan lederauon 329 3,6
7 Pong kong, Chlna 493 3,4
8 Canada 433 3,1
9 Slngapore 408 2,8
10 Saudl Arabla, klngdom of 386 2,6
Excluding intra-EU27 trade
Source: WTO, World Trade Report 2013
Leading importers merchandise trade, 2012
(billion USD/%)
8ank lmporLers value
1 unlLed SLaLes 2333 12,6
2 Chlna 1818 9,8
3 Cermany 1167 6,3
4 !apan 886 4,8
3 unlLed klngdom 680 3,7
6 lrance 674 3,6
7 neLherlands 391 3,2
8 Pong kong, Chlna 334 3,0
9 korea, 8ep. of 320 2,8
10 lndla 489 2,6
Excluding intra-EU27 trade
8ank lmporLers value
1 unlLed SLaLes 2333 13,6
2 LxLra-Lu(27) exporLs 2301 13,4
3 Chlna 1818 12,2
4 !apan 886 3,9
3 Pong kong, Chlna 334 3,7
6 korea, 8ep. of 320 3,3
7 lndla 489 3,3
8 Canada 473 3,2
9 Mexlco 380 2,3
10 Slngapore 380 2,3
Source: WTO, World Trade Report 2013
The pattern of merchandise trade surpluses and
deficits, 2008
16
Source: Peter Dicken (2011, p.23), Global Shift, (6 Ed.)
Merchandise exports by region, 2012
(% of total world merchandise exports)
Source: WTO, World Trade Report 2013
Merchandise imports by region, 2012
(% of total world merchandise imports)
Source: WTO, World Trade Report 2013
The geography of world trade: large share of
intra-regional trade
19
Source: WTO, International Trade Statstics 2007
The geography of world trade: large share of
intra-regional trade (cont.)
20
Source: Peter Dicken
(2011, p.39), Global
Shift, (6 Ed.)
The geography of international trade: intra and inter-
regional trade (2011) (%)
North
America
South/Central
America Europe CIS Africa
Middle
East Asia
North America
48,3 8,8 16,7 0,7 1,6 2,8 20,9
South/Central
America 24,2 26,7 18,3 1,1 2,8 2,4 22,5
Europe
7,3 1,8 70,6 3,5 3,0 2,9 9,7
CIS
5,5 1,4 51,8
19,
5 1,6 3,0 14,8
Africa
17,1 3,3 34,5 0,3 13,0 3,6 24,5
Middle East
8,6 0,8 12,6 0,5 3,0 8,8 52,8
Asia
16,4 3,4 16,7 2,0 2,8 4,4 52,8
World
16,4 4,2 38,6 3,0 3,0 3,8 28,8
Source: WTO, International Trade Statistics 2012.
Shares of North-North, North-South and South-South
trade in world merchandise exports, 1990-2011 (%)
Source: WTO, World Trade Report 2013, p.65
Product shares in world merchandise exports
since 1900 (%)
Source: WTO, World Trade Report 2013, p.54
Sectoral distribution of world exports, 2011
Source: WTO International Trade
Statistics 2012
Global trade in services - exports and
imports
25
Source: Peter Dicken (2011, p.40), Global Shift
The pattern of services trade surpluses
and deficits, 2008
26
Source: Peter Dicken (2011, p.23), Global Shift, (6 Ed.)
Exports of services, by category (%)
Source: WTO International Trade Statistics 2012
Leading exporters - services, 2012
(billion USD/%)
Excluding intra-EU27 trade
Source: WTO, World Trade Report 2013
8ank LxporLers value
1 unlLed SLaLes 614 14,1
2 unlLed klngdom 278 6,4
3 Cermany 233 3,9
4 lrance 208 4,8
3 Chlna 190 4,4
6 lndla 148 3,4
7 !apan 140 3,2
8 Spaln 140 3,2
9 Slngapore 133 3,1
10 neLherlands 126 2,9
8ank LxporLers value
1 LxLra-Lu(27) exporLs 823 24,6
2 unlLed SLaLes 614 18,3
3 Chlna 190 3,7
4 lndla 148 4,4
3 !apan 140 4,2
6 Slngapore 133 4,0
7 Pong kong, Chlna 126 3,8
8 korea, 8epubllc of 109 3,3
9 SwlLzerland 88 2,6
10 Canada 78 2,3
Leading importers - services, 2012
(billion USD/%)
Excluding intra-EU27 trade
Fonte: WTO, World Trade Report 2013
8ank lmporLers value
1 unlLed SLaLes 406 9,9
2 Cermany 283 6,9
3 Chlna 281 6,8
4 unlLed klngdom 176 4,3
3 !apan 174 4,2
6 lrance 171 4,2
7 lndla 123 3,0
8 Slngapore 117 2,8
9 neLherlands 113 2,8
10 lreland 110 2,7
8ank lmporLers value
1 LxLra-Lu (27) lmporLs 639 20
2 unlLed SLaLes 406 12,7
3 Chlna 281 8,8
4 !apan 174 3,4
3 lndla 123 3,9
6 Slngapore 117 3,7
7 Canada 103 3,3
8 korea, 8epubllc of 103 3,3
9 8usslan lederauon 102 3,2
10 8razll 78 2,4
Exports of services by region, 2012
(% of total world exports of services)
Source: WTO, World Trade Report 2013
Imports of services by region , 2012
(% of total world imports of services)
Source: WTO, World Trade Report 2013
The global map of FDI
32
Source: Peter
Dicken (2011, p.
42) Global Shift
33
FDI flows: global and by country group
1995-2012 (billion USD)
Source: UNCTAD, World Investment Report 2012: p.3
Source: UNCTAD, World Investment Report 2013: p.3
34
Multinational firms: some figures
! ln 2012, forelgn subsldlarles accounL for (unC1Au, Wl8
2013, p.24):
! LmploymenL: abouL 34 5,)),(" people (ln 1990: 21 mllllon),
! Cu: abouL ("$ #$"#6 (7 8(%)/ 09:,
! 1rade: abouL ("$ #6,%/ (7 8(%)/ $;<(%#=,
>??@ 4@>@ A1=B
Mulunauonal rms 37 000 103 000
70 based ln
developed counLrles
Subsldlarles 170 000 883 000
38 locaLed ln
developlng counLrles
Source: unC1Au, 8&.'9 :/;-<=>-/= $-+&.= 3466
35
The largest multinationals
! 1he 100 largesL mulunauonals accounL for:
! 9,3 of lorelgn asseLs owned by MnLs,
! 21 of lorelgn amllaLes' sales,
! 14,4 of LmploymenL ln forelgn amllaLes
Source: UNCTAD, World Investment Report 2013, p.23.
36
The worlds largest non-financial
MNCs, by foreign assets, 2012
C&"D,"E F(%<(%&'(" G(5$ $-("(5H !"/I=#%H
1
Ceneral LlecLrlc Co unlLed SLaLes LlecLrlcal & elecLronlc equlp.
2
8oyal uuLch Shell plc uk eLroleum expl./ref./dlsLr.
3
8 plc uk eLroleum expl./ref./dlsLr.
4
1oyoLa MoLor Corporauon !apan MoLor vehlcles
3
1oLal SA lrance eLroleum expl./ref./dlsLr.
6
Lxxon Mobll Corporauon unlLed SLaLes eLroleum expl./ref./dlsLr.
7
vodafone Croup lc uk 1elecommunlcauons
8
Cul Suez lrance uullues (LlecLrlclLy, gas and waLer)
9
Chevron Corporauon unlLed SLaLes eLroleum expl./ref./dlsLr.
10
volkswagen Croup Cermany MoLor vehlcles
11
Lnl SpA lLaly eLroleum expl./ref./dlsLr.
12
nesLle SA SwlLzerland lood, beverages and Lobacco
13
Lnel SpA lLaly LlecLrlclLy, gas and waLer
14
L.Cn AC Cermany uullues (LlecLrlclLy, gas and waLer)
13
Anheuser-8usch ln8ev nv 8elglum lood, beverages and Lobacco
16
ArcelorMlual Luxembourg MeLal and meLal producLs
17
Slemens AC Cermany LlecLrlcal & elecLronlc equlp.
18
Ponda MoLor Co LLd !apan MoLor vehlcles
19
MlLsublshl Corporauon !apan Wholesale Lrade
20
Lul SA lrance uullues (LlecLrlclLy, gas and waLer)
Source: World Investment Report, 2013
37
The largest economic entities
Source: Global Trends - Corporate Clout: The Influence of the
Worlds Largest 100 Economic Entities
Of the top 100 economic entities, 44 are companies
38
Number of parent companies
Developing countries
Source: UNCTAD (2006), World Investment Report 2006, p. 122.
Changes in the global economic map:
production, trade and FDI
39
Source: Peter Dicken (2011, p.25) Global Shift
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#6$,% <(=,'(" 6&= -6&"E$/ =I1=#&"'&))HB