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Global trade integration and outsourcing : How well is the EU coping with the new challenges?


  • Karel Havik
  • Kieran Mc Morrow


Even with the growing internationalisation of production and the emerging concerns regarding the outsourcing phenomenon, the present study suggests that Europe has handled the post-1990 upsurge in worldwide trade integration in a relatively successful way. The EU continues to retain its long-established title as the number 1 global trading power. In addition, the EU has been a net gainer in terms of the outsourcing part of the production relocation phenomenon, with an increase in its surplus on trade in intermediate goods and services over the period 1992 to 2003. However, despite this relatively reassuring assessment, the study also highlights a number of areas of concern, such as geographically with regard to the EU's growing trade deficits with Asia in general and technologically with the EU's exceptionally poor performance on the ICT front. Complacency must therefore be avoided and policy makers need to remain vigilant to a number of potential medium to long run challenges to the EU's present hegemony in world trade.

Suggested Citation

  • Karel Havik & Kieran Mc Morrow, 2006. "Global trade integration and outsourcing : How well is the EU coping with the new challenges?," European Economy - Economic Papers 2008 - 2015 259, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
  • Handle: RePEc:euf:ecopap:0259

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    References listed on IDEAS

    1. Amiti, Mary & Wei, Shang-Jin, 2006. "Service Offshoring, Productivity and Employment: Evidence from the US," CEPR Discussion Papers 5475, C.E.P.R. Discussion Papers.
    2. Mary Amiti & Shang-Jin Wei, 2005. "Fear of service outsourcing: is it justified?," Economic Policy, CEPR;CES;MSH, vol. 20(42), pages 308-347, April.
    3. Hartmut Egger & Peter Egger, 2006. "International Outsourcing and the Productivity of Low-Skilled Labor in the EU," Economic Inquiry, Western Economic Association International, vol. 44(1), pages 98-108, January.
    4. Jörg Mayer & Arunas Butkevicius & Ali Kadri & Juan Pizarro, 2004. "Dynamic products in world exports," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 140(3), pages 762-795, September.
    5. Françoise Lemoine & Deniz Ünal-Kesenci, 2002. "China in the International Segmentation of Production Processes," Working Papers 2002-02, CEPII research center.
    6. Paul A. Samuelson, 2004. "Where Ricardo and Mill Rebut and Confirm Arguments of Mainstream Economists Supporting Globalization," Journal of Economic Perspectives, American Economic Association, vol. 18(3), pages 135-146, Summer.
    7. Michaël Freudenberg & Françoise Lemoine, 1999. "Central and Eastern European Countries in the International Division of Labour in Europe," Working Papers 1999-05, CEPII research center.
    8. Nigel Pain & Desirée van Welsum, 2005. "International Production Relocation and Exports of Services," OECD Economic Studies, OECD Publishing, vol. 2004(1), pages 67-94.
    9. Barrell, Ray & Dées, Stéphane, 2005. "World trade and global integration in production processes: a re-assessment of import demand equations," Working Paper Series 503, European Central Bank.
    10. Giuseppe Nicoletti & Steve Golub & Dana Hajkova & Daniel Mirza & Kwang-Yeol Yoo, 2003. "Policies and International Integration: Influences on Trade and Foreign Direct Investment," OECD Economics Department Working Papers 359, OECD Publishing.
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    Cited by:

    1. Ghibutiu, Agnes & Poladian, Simona, 2009. "Global Sourcing Of Services: How Well Are The New Eu Member States Coping With The Challenges? (Part I)," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 6(1), pages 123-135, March.
    2. Anna M. Falzoni & Lucia Tajoli, 2011. "Offshoring and the Skill Composition of Employment in the Italian Manufacturing Industries," Rivista di Politica Economica, SIPI Spa, issue 1, pages 121-153, January-M.


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