Asymmetries in International Trade

The discussion of competition from the domestic extends to international markets and the formation of international prices. We raise the old discussion on unequal exchange and transfer of values. In our analysis, we use input-output data available from the WIOD base for the German, Greek, US and Chinese economies, and we attempt to estimate the transfer of value between three pairs of countries, Greece-Germany, China-USA and Germany-USA. We do not find significant transfers in the trade between the USA and Germany, apparently because of their similar technologies and productivities which do not present wide differences. However, when we compare the German with the Greek economy in terms of unit labour values, we find large differences in favour of Germany, and, when the exchange takes place, it follows that there are significant transfers from Greece to Germany. Similarly, in the USA-China bilateral trade, we find that productivity in the USA is several times higher than that of China and the wage rate in China much lower than that of the USA; however, both productivity and wage differentials in the last years of the analysis tend to get narrower. Hence, if we rely only on these, the USA appears to have an absolute advantage; however, on further examination, we find that, once we take the purchasing power parity into account, China appears to possess and maintain an absolute cost advantage.