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Long Term Patterns of International Merchandise Trade

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  • Roman Stöllinger
  • Beate Muck

Abstract

This FIW Special International Economics takes a long term perspective on international merchandise trade and tracks specialisation patterns of 19 world regions over the period 1980 to 2009. The data reveals that the path of trade specialisation is not predetermined: globalisation may intensify initial specialisations or may induce technological upgrading leading to new specialisation patterns. The emergence of the highly successful East Asian electronics cluster is easily discernible from our analysis as is the catch-up process of Eastern Europe. The experience of these dynamic regions contrasts with that of the African regions, West Asia and to some extent South America, whose primary role in the world economy is still that of oil and raw material suppliers. We also show that international trade in technology intensive industries has broadened geographically. High income countries in Europe, Japan and the US which dominated trade in high tech manufactures until the 1980s have suffered a considerable loss of market shares to the benefit of emerging East Asian countries causing a lot of concern about the EU’s export performance in high technology industries among European policy makers. R&D policy has become a major component of Europe’s industrial policy which is intended to support the continuous process of technological upgrading high income countries need to remain competitive in world markets. European high income regions have been successful in this respect in the sense that their export structures continue to shift towards more technology intensive industries despite the losses of global market shares which must be seen as a consequence of a broader participation in world trade. We read the major shifts in global world trade over the past decades and in particular the ‘rise of Asia’ as evidence that active trade and industrial policies can ignite and support the industrialisation process and technological upgrading within the manufacturing sector. At the same time Eastern Europe showed that a technological catch-up process can also be achieved by relying on foreign direct investment and deep trade integration with more advanced trading partners in the region. In contrast, the policies pursued by South American countries after the debt-crisis of the 1980s did not seem to have fostered significant technological upgrading. Given the undetermacy of trade specialisation over time and the multiple paths to technological upgrading we believe that international trade rules should ensure – more than they do now – that all countries have the required policy space to implement policies that foster structural changes in their economies.

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Bibliographic Info

Paper provided by FIW in its series FIW Specials series with number 001.

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Length: 32
Date of creation: Nov 2011
Date of revision:
Handle: RePEc:wsr:fiwspe:y:2011:i:001

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Keywords: export specialisation; structural change; technological upgrading; industrial policy;

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  1. Charles I. Jones & Paul M. Romer, 2009. "The New Kaldor Facts: Ideas, Institutions, Population, and Human Capital," NBER Working Papers 15094, National Bureau of Economic Research, Inc.
  2. Margaret S. McMillan & Dani Rodrik, 2011. "Globalization, Structural Change and Productivity Growth," NBER Working Papers 17143, National Bureau of Economic Research, Inc.
  3. Stephen Thomsen, 1999. "Southeast Asia: The Role of Foreign Direct Investment Policies in Development," OECD Working Papers on International Investment 1999/1, OECD Publishing.
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  7. John Weiss, 2005. "Export Growth and Industrial Policy: Lessons from the East Asian Miracle Experience," IDB Publications 47618, Inter-American Development Bank.
  8. Philippe Aghion, 2009. "Some Thoughts on Industrial Policy and Growth," Documents de Travail de l'OFCE 2009-09, Observatoire Francais des Conjonctures Economiques (OFCE).
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