Ways that Countries Interact

• Ways that countries interact economically

– Trade (per CIA, 2013 est.)

• World exports: $18.71 trillion

(compare world GDP of $87 trillion)

• World trade has grown faster than world GDP most years

– But not during 2008-9, due to world recession

• See tables below for

– Who trades most?

– Who trades with whom?

– Share of trade in GDP

– US:

• What do we export/import?

• To/from whom?

Who Trades the Most? ($ b. & % share, 2013)

Source: WTO, International Trade Statistics, 2014, Table I.8

Who Trades the Most?

• Developed countries are the biggest traders

• China is catching up, in trade volume

– It was the #3 exporter six years ago when I taught the course; now it’s #2 and closing in on EU.

– Others are gaining as well: Four years ago Canada was #5 exporter. Three years ago that was S Korea

• See Economist from about a year ago: “Trading Up: Picking the world champion of trade”

– China claimed to have surpassed US. True only for goods, not goods + services

• But with time China will pass US in both

– China’s trade per GDP is much larger than the US, but below world average

– Much of the value in China’s exports is imported inputs, thus low “value added.”

• “Emerging Markets” in general are catching up to, or surpassing, the developed countries

– In GDP, trade, and more

– See Economics Focus from The Economist, “Why the Tail Wags the Dog”

What Does the World Trade? ($ b. 2013 & annual % growth rates, merchandise exports)

Source: WTO, International Trade Statistics, 2014, Table II.1