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THE NUMBERS: U.S. share of world imports (goods & services) –
2010 12.3%
2005 15.3%
2000 18.0%
WHAT THEY MEAN:
… but for how long?
The WTO’s annual report on trade statistics, released last Friday, shows trade rising fast in the new millennium’s first decade. As the (nominal-dollar) world economy grew from $32 trillion in 2000 to $63 trillion in 2010, exports of goods and services rose from $7.8 trillion to $18.9 trillion. In percentage terms this jump – from 25 percent to 30 percent of world output – leaves the share of trade at a modern high point, eclipsing the earlier peak in pre-crisis 2008.*
The world’s four biggest economies account for $5.9 trillion of the exports, or about a third of the total. The same four, in the same order – U.S., China, Germany, Japan – buy a slightly larger fraction of imports, $6.1 trillion. Over the decade, their statistics (combining goods and services trade, and arranged by growth totals) look like this:
IMPORTS 2000 2010 Change
WORLD: $8.10 trillion $18.90 trillion 135% / $10.8 trillion
China: $0.26 $1.58 510% / $1.32 trillion
U.S.: $1.44 $2.33 62% / $0.89 trillion
Germany: $0.63 $1.32 110% / $0.69 trillion
Japan $0.50 $0.75 50% / $0.25 trillion
EXPORTS 2000 2010 Change
WORLD $7.78 trillion $18.90 trillion 135% / $11.1 trillion
China $0.28 $1.76 525% / $1.48 trillion
Germany $0.63 $1.50 138% / $0.87 trillion
U.S. $1.05 $1.80 70% / $0.75 trillion
Japan $0.55 $0.81 47% / $0.26 trillion
The U.S. remains the leading exporter by a shade, and (despite China’s import surge and a sharply diminished share of world imports) the leading importer by a wide margin. Based on current trends (but see below the “Further Reading” line for two alternative hypotheses) China would surpass the U.S. as top exporter in 2012, and as top importer somewhere after mid-decade.
* Trade has grown, fairly steadily, as a share of the world economy since 1946 after collapsing in the late 1920s and 1930s. The late-Victorian peak was around 17 percent, though meaningful comparisons are difficult since there were fewer countries then.
** No, the import and export numbers for 2000 don’t quite match. Usually export numbers are a bit harder to count than imports, and yield slightly smaller totals.
FURTHER READING:
The WTO’s 2011 trade statistics report: http://www.wto.org/english/res_e/statis_e/its2011_e/its11_toc_e.htm
The Census Bureau’s Global Reach trade data blog, with links to U.S. trade data of all sorts: http://blogs.census.gov/globalreach/
The Bureau of Economic Analysis’ services-trade section, now complete through 2010: http://www.bea.gov/international/international_services.htm
Two alternative interpretations –
Shifting Products: Manufactured goods are the main traded product, accounting for $10.0 trillion of the $18.9 trillion in exports. Services add $3.7 trillion, natural resources $3.0 trillion, and farm products $1.4 trillion. (Within manufacturing, the fastest growth has been in chemicals; the slowest growth in textiles and clothing.) The factory share of trade rose fairly steadily from the 1950s to 2000, eclipsing farm and resource trade as tariffs declined through eight multilateral trade agreements (1947-1998), and container-shipping (invented 1956) cut shipping time and cost.
The factory share of trade declined a bit over the last decade, though(from 61 percent of all exports in 2000 to 55 percent), not only because rising prices tripled farm and natural-resource exports, while the deployment of satellites and fiber-optic cable did the same for Internet-suited services industries like finance, entertainment, and telecommunications. For Americans looking for reassurance, American services exporters sell as much as the 2nd and 3rd ranking countries combined. (The U.S. is at $518 billion, 2nd-place Germany $232 billion and 3rd-place U.K. at $227 billion; in ‘audio-visual and related’ services – entertainment, news, &c., a field especially well-suited to internet delivery – America accounts for half of all world exports. Should internet-based services trade begin to rival manufacturing trade over the next decade, then, the U.S. lead might once again expand.
A data question: How well do trade statistics describe the global economy? In agriculture and resources, very well. Something grown or dug up in one country is shipped to another. In services, not very well, but mainly because counting methods remain primitive and may miss a lot of trade; no data at all exists, for example, to explain how much services travel via Internet. Manufacturing data are also open to question, as complex products – cars, shirts, telephones – contain metals, components, semiconductor chips, fabrics and other parts from all over the world. To quote the WTO’s statistical wizards:
“Companies divide their operations across the world, from the design of the product and manufacturing of components to assembly and marketing, creating international production chains. More and more products are “Made in the World” rather than “Made in the UK” or “Made in France”. The statistical bias created by attributing the full commercial value to the last country of origin can pervert the political debate on the origin of the imbalances and lead to misguided, and hence counter-productive, decisions.”
An introduction from WTO statistical chief Andreas Maurer uses the i-Phone as an example. Standard Customs service counts report the phone as $1.9 billion in Chinese exports to the United States. A “value-added” account reduces the Chinese input to $73 million worth of factory work, plus $684 million in Japanese gadgets, $251 million in Korean content, $341 million from Germany, and $582 million from other countries. If this product is an extreme case of a typical phenomenon, value-added measurements might reduce the Chinese share of trade while raising that of developed countries. Maurer explains: http://www.wto.org/english/res_e/statis_e/miwi_e/background_paper_e.htm
Likewise, from the Trade Fact archives (2007), Phoebe Leung figures out who earns the money from DVD players: http://www.dlc.org/ndol_ci.cfm?kaid=108&subid=900003&contentid=254366
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