International trade in goods by type of good
Data extracted in May-June 2017
Planned article update: November 2019
In 2016, machinery and transport equipment accounted for €746 billion or 43 % of all goods exported from the EU.
In 2016, the US was the main destination for EU exports of motor cars (30.2 % of the total exports), while a quarter of EU imports of motor cars came from Japan (24 % of the total imports).
Globalisation patterns in EU trade and investment is an online Eurostat publication presenting a summary of recent European Union (EU) statistics on economic aspects of globalisation, focusing on patterns of EU trade and investment.
This article examines in more detail the different types of goods that are traded between nations. Globalisation, falling trade costs and technological progress are thought to have driven the international fragmentation of production and the development of international production/supply chains. These changes to the way in which goods (and services) are produced has resulted in manufacturing processes being split into different stages so that intermediate inputs may be sourced from the most efficient producers, even if they are spread across disparate locations. As a result, the relative importance of intermediate goods — the inputs which connect different production stages together — as a share of total trade has risen at a rapid pace.
International trade in goods — developments by broad economic category
Statistics on international trade in goods by broad economic category (BEC)
As global production chains have developed into complex production networks it has become increasingly difficult, from a statistical perspective, to measure where specific (end) goods are made and by whom. Indeed, an analysis of international trade developments based on gross measures has become less accurate, as intermediate goods (parts and components) may be counted several times as they cross borders to be used at various stages of the manufacturing process.
The classification of international trade statistics by broad economic category (BEC) is managed by the United Nations. These statistics permit the conversion of international trade data based on the standard international trade classification (SITC) into end-use categories. At its most detailed level, the BEC classification has 19 categories that can be aggregated to approximate the three basic types of goods (capital, intermediate and consumption goods); this makes it easier to analyse international trade statistics alongside other types of general economic statistics, such as national accounts.
The share of intermediate goods in all extra-EU imports peaked in 2012 …
Figure 1 shows the development of the share of intermediate goods in total trade for the EU-28 over the period covering 2002-2016. Prior to the global financial and economic crisis, trade in intermediate goods was an important driver of overall trade, as witnessed through their increasing share of total trade up until 2008. This was particularly true for extra-EU imports, suggesting that EU manufacturers had a relatively high propensity to import parts and components from non-member countries; there was also an increase in the relative share of intermediate goods among intra-EU exports.
The crisis had a considerable impact not only on the value of trade in intermediate goods, but also resulted in a declining share of intermediate goods in total trade. Thereafter, there was a relatively swift recovery and the share of intermediate goods in total trade continued to rise, peaking in 2012 at 66.5 % for extra-EU imports and 55.4 % for intra-EU exports.
… but then subsequently fell to 56.9 % by 2016
The value of the EU-28 trade in goods stagnated (or even contracted in the case of imports) from 2013 onwards. Alongside this overall pattern of development, there was a relatively fast decline in the share of intermediate goods in total trade (with a return to shares that had not been seen since just after the turn of the millennium). Some economists believe this may be linked, among others, to manufacturers deciding to produce their own intermediate goods, thereby internalising global value chains. In 2016, the EU-28 share of intermediate goods in extra-EU imports stood at 56.9 %, some 9.6 percentage points below its relative peak of 2012.
The predominance of intermediate goods in total trade is shown in Figure 2. Across the EU-28, intermediate goods accounted for just less than half (47.3 %) of all goods that were exported in 2016; as noted above, the corresponding share for imports was higher, at 56.9 %. For comparison, more than one fifth (21.3 %) of the EU-28’s exported goods in 2016 were accounted for by capital goods, while consumption goods made up more than one fifth (21.5 %) of the EU-28’s imported goods.
Many of the Member States that joined the EU in 2004 or more recently had a relatively high share of their total trade in intermediate products, suggesting that they were more implicated in supply chains
In 2016, a majority (18) of the EU Member States reported that intermediate goods contributed more than half of their total trade in value terms, both for imports and exports; note these were not the same 18 Member States for each trade flow (see Figures 3 and 4). The share of intermediate goods in total exports rose to almost two thirds (66.0 %) in Finland, while the next highest shares were 60.7 % for Romania and 58.9 % for Bulgaria. By contrast, the share of intermediate goods in total imports peaked in Hungary (61.9 %), while the Czech Republic, Bulgaria, Slovakia and Romania each reported shares within the range of 58.0-60.0 %.
Many of those Member States that joined the EU in 2004 or more recently had a relatively high share of their total trade in intermediate products, suggesting that they were more implicated in supply chains than some other Member States. Indeed, it would appear that the enlargement of the EU has led to some of these Member States becoming important suppliers of intermediate goods to key EU producers, in particular, German manufacturers. This pattern was already alluded to in the article International trade in goods by partner, in relation to the growing share of German imports that were sourced from neighbouring eastern Member States, such as the Czech Republic, Poland, Hungary, Slovakia and Slovenia.
International trade in goods — developments for key product groups
Historically, the biggest shifts in international trade by product resulted in a marked decline in the relative contribution of agricultural products to total trade, while the share of manufactured goods increased. When asked to picture globalisation today, many people are likely to imagine a cargo ship transporting large quantities of manufactured goods to distant markets on the other side of the world. A closer examination reveals that the bulk of international trade in goods is relatively concentrated within some key product groups, while there are many goods where the level of international trade remains quite low. Indeed, as noted in the article International trade in goods for the EU - an overview, the intrinsic nature of some goods (for example, those with a limited shelf-life or those that are bulky) means that they are principally consumed within domestic or neighbouring markets.
In 2016, machinery and transport equipment accounted for EUR 746 billion or 42.7 % of all goods exported from the EU-28
Figure 5 shows the development of extra-EU exports for the top level headings from the standard international trade classification (SITC). One of the most striking aspects is the relative importance of machinery and transport equipment, which accounted for 42.7 % of all goods exported from the EU-28 in 2016. The next highest shares were recorded for other manufactured goods (22.7 %) and chemicals and related products (18.0 %), while food, drinks and tobacco (6.6 %), mineral fuels, lubricants and related materials (4.3 %) and raw materials (2.4 %) accounted for much lower proportions.
Looking at developments during the period 2002-2016, the impact of the global financial and economic crisis on the different product headings is clearly evident: for example, there was a marked downturn in 2009 in the value of EU-28 exports of machinery and transport equipment and other manufactured goods. EU-28 exports of mineral fuels, lubricants and related materials followed a fluctuating pattern with a considerable downturn from 2012 onwards; note this reduction largely reflects a fall in the spot price of oil, for example, the price of Brent crude declined by more than 50 % between 2012 and 2015. That said, a comparison of developments for EU-28 exports between 2002 and 2016 reveals that the fastest overall growth was recorded for mineral fuels, lubricants and related materials, as their value in 2016 was 2.8 times as high as in 2002; by contrast, the lowest expansion was recorded for other manufactured goods (where EU-28 exports in 2016 were valued 1.7 times as high as in 2002).
The share of mineral fuels, lubricants and related materials in the total value of EU-28 imported goods fell rapidly from 2012 onwards, largely as a result of falling oil prices
Complementary information on developments for EU-28 imports is presented in Figure 6 (based on the same product headings). A ranking of the different headings in terms of their share of extra-EU imports shows the relative importance of mineral fuels, lubricants and related materials. Their share of all goods imported into the EU-28 peaked at 30.4 % in 2012 (when crude oil prices were extremely high), but subsequently declined for four consecutive years to 15.5 % by 2016. Machinery and transport equipment accounted for almost one third (32.4 %) of the EU-28’s imported goods in 2016, while other manufactured goods represented just over a quarter (26.4 %).
Figure 7 shows information for 2016 pertaining to the different shares of each product heading in extra-EU exports and extra-EU imports. As the total value of EU-28 exports (EUR 1 745 billion) and imports (EUR 1 711 billion) was almost balanced — the surplus of EUR 35 billion represented 1.0 % of total extra-EU trade — Figure 7 may also be used to identify those product headings where the EU-28 had a trade surplus with non-member countries, for example, machinery and transport equipment (EUR 192 billion) or a trade deficit, for example, mineral fuels, lubricants and related materials (EUR 190 billion).
International trade in goods — focus on selected product groups
This final section in this article looks in more detail at international trade developments for a selected group of specific products, where globalisation has had a significant impact on industrial structure and conduct:
- medicinal and pharmaceutical products (SITC 54);
- iron and steel (SITC 67);
- motor cars (SITC 781);
- articles of apparel and clothing accessories (SITC 84).
The share of these selected product categories in extra-EU trade is presented in Figure 8. There was a clear shift in the composition of EU-28 exports between 2002 and 2016 towards higher value products such as medicinal and pharmaceutical products or motor cars. For example, the former saw its share of the EU-28’s exported goods rise from 5.6 % in 2002 to 8.3 % by 2016, while the share of motor cars rose from 6.5 % to 7.2 %. During the same period, the relative share of more traditional products such as iron and steel or clothing fell: the former from 2.1 % to 1.7 % of the EU-28’s exported goods and the latter from 1.7 % to 1.4 %. By contrast, the share of iron and steel and clothing in the total value of EU-28 imports rose between 2002 and 2016.
Medicinal and pharmaceutical products
The EU-28 was the world’s leading exporter of medicinal and pharmaceutical products in 2016. Extra-EU trade grew rapidly between 2002 and 2016, almost tripling in value, while intra-EU trade more than doubled over the same period. Extra-EU exports of medicinal and pharmaceutical products were valued at EUR 144 billion in 2016, compared with extra-EU imports of EUR 75 billion; as such, the EU-28 had a trade surplus of EUR 69 billion. According to the European Commission’s Directorate-General for Trade, the most common trade impediments faced by pharmaceutical exporters are a range of burdensome and costly registration, licensing and certification procedures; the EU aims to redress these through its bilateral trade agreements or by tackling individual barriers as part of its market access partnerships.
The United States was the EU’s main trading partner for medicinal and pharmaceutical products, both in terms of imports and exports (see Figure 9). Just over one third (33.6 %) of all EU-28 exports in 2016 were destined for the United States; note that this was lower than in 2002, when the United States accounted for a 38.5 % share of the EU’s exports of medicinal and pharmaceutical products. The next largest EU export markets were Switzerland, which accounted for just over a tenth (11.4 %) of all exports in 2016, followed by Japan (6.1 %) and China (5.7 %).
Imports of medicinal and pharmaceutical products into the EU-28 were even more dominated by the EU’s main trading partners, as more than three quarters of the goods imported in 2016 originated from either the United States (42.0 %) or Switzerland (34.7 %); the next highest share was recorded for imports originating in China (3.9 %).
Between 2002 and 2016 the share of EU-28 exports of medicinal and pharmaceutical products that were destined for China rose from 1.2 % to 5.7 %, their share of total exports increasing 4.9-fold. During the same period, the share of EU-28 imports of medicinal and pharmaceutical products originating in Singapore increased 3.4-fold, while there was also relatively rapid growth for the share of imports originating in India, which increased 2.8-fold.
Among the EU Member States in 2016, exports of medicinal and pharmaceutical products were relatively concentrated in Germany (22.8 % of the EU’s exports), Belgium (13.3 %), Ireland (9.9 %) and the United Kingdom (also 9.9 %); the main export destination for each of these was the United States (see Table 1). According to structural business statistics and research and development statistics, the pharmaceutical industry is particularly important to the Belgian and Irish economies, providing a high number of jobs, considerable investment in research and development, as well as strong export performance.
Germany recorded the highest share (18.6 %) of EU imports of medicinal and pharmaceutical products in 2016, followed by Belgium (13.9 %) and the United Kingdom (12.5 %) as the only other EU Member States with double-digit shares (see Table 2).
Iron and steel
The iron and steel industry is often seen as being of strategic importance. In the last couple of decades there has been a pattern of industrialised nations relocating some of their iron and steel production facilities to developing countries; this has been driven, at least in part, by a desire to relocate production facilities closer to coal and iron ore supplies.
At the same time as the quantity of iron and steel production was falling in the EU-28 (with output being refocused on high-end products), there was widespread investment in new plant across China; indeed, by 2016 China was producing slightly more than half of the world’s steel output. The other leading global producers of steel include the EU, Japan, India, the United States, Russia, South Korea, Turkey, Brazil and Ukraine.
Alongside a rapid shift in global output of iron and steel, there were also major changes to trade patterns. These were particularly evident during the last few years, as Chinese economic growth slowed, resulting in excess Chinese capacity being redirected to foreign markets. In 2002, China accounted for just 2.9 % of the EU-28’s imports of iron and steel, yet by 2016 the proportion of EU-28 imports originating from China had jumped to 16.3 %. China was the principal origin of EU-28 imports of iron and steel in 2016, ahead of Russia (13.0 %), while Ukraine (10.1 %) was the only other partner to account for a double-digit share of the EU-28’s import market (see Figure 10).
Between 2002 and 2016 a growing share of EU-28 exports of iron and steel were destined for Turkey (its share rising to 9.7 % in 2016), China (7.8 %) and India (3.3 %). By contrast, the share of EU-28 exports of iron and steel that were destined for the United States fell by 2.6 percentage points during the same period; nevertheless, the United States remained the EU’s largest export destination, accounting for more than one sixth (17.4 %) of its iron and steel exports in 2016.
The EU-28 ran a trade surplus of EUR 2.3 billon for iron and steel in 2016. The leading exporter among the EU Member States was Germany (EUR 22.0 billion), followed by Italy (EUR 14.9 billion), Belgium (EUR 12.2 billion) and France (EUR 11.0 billion). It is interesting to note that iron and steel products accounted for 12.7 % of all goods exported from Luxembourg in 2016, the next highest share being recorded in Finland (6.8 % of total exports) — see Table 3.
Extra-EU iron and steel imports into the EU-28 from non-member countries were valued at EUR 26.6 billion in 2016. Table 4 shows that Germany had the highest value (EUR 21.6 billion) of iron and steel imports among the EU Member States (based on total trade, in other words, intra-EU and extra-EU flows), followed by Italy (EUR 13.5 billion) and France (EUR 10.3 billion). Belgium was the main origin of iron and steel imports for both Germany and France, with a relatively high number of the Member States reporting that their principal origin of imports was a neighbouring country.
The car industry has undergone a considerable change in recent years, with increased production from new producers in emerging markets, while traditional car manufacturers have faced structural issues associated with falling domestic sales and overcapacity. The industry remains dominated by a small number of global players who tend to have a presence on most continents as a result of takeovers, joint ventures, alliances and other forms of collaboration. The car industry is often seen as a pioneer for new methods of industrial organisation and is a leading exponent of global value chains, sourcing intermediate inputs from around the world and delivering these ‘just-in-time’ for assembly.
While car production has diversified geographically, Europe’s automotive industry is concentrated in the hands of a small number of groups, including Volkswagen, Daimler, BMW, Fiat Chrysler, PSA and Renault. It should also be noted that overseas carmakers have a considerable presence manufacturing cars within the single European market, for example: General Motors in Germany and Austria; Ford in Spain and the United Kingdom; or Hyundai in the Czech Republic. It is important to note that the statistics presented below relate to imports and exports of motor cars between national territories, regardless of the ownership of the production facilities where these cars are made.
The EU-28 is the world’s largest car exporter, and the industry’s export orientation is underscored by its growing trade surplus, which reached EUR 87 billion in 2016 (which was more than double the EU-28’s trade surplus for all goods). Increasing exports of motor cars to established and emerging markets may be viewed as a response by Europe’s carmakers to address the issue of falling domestic demand.
In 2016, the United States remained the main destination for EU-28 exports of motor cars (30.2 % of the total), well ahead of China (15.8 %) — see Figure 11. Together with Turkey (6.2 %), Switzerland and Japan (both 5.9 %) and South Korea (4.6 %), these six trade partners together accounted for more than two thirds (68.6 %) of the EU’s exports. It is interesting to note that while the share of EU-28 exports destined for the United States declined by 17.5 percentage points from 47.7 % to 30.2 % between 2002 and 2016, the share of exports destined for China rose by 14.1 percentage points; this may be explained by the rapid growth of the Chinese car market.
Almost three quarters of the EU-28’s imports of motor cars in 2016 originated from Japan (23.9 % of the total), the United States (19.1 %), Turkey (16.8 %) or South Korea (12.5 %). It is interesting to note the rapid decline in the share of EU-28 motor car imports that originated from Japan — they were more than halved between 2002 and 2016, falling from a 50.6 % share in 2002. These developments may, at least in part, reflect the establishment of Japanese manufacturing bases within the EU, for example, Nissan facilities in Spain, France and the United Kingdom or Toyota facilities in the Czech Republic, France and the United Kingdom.
By contrast, a growing proportion of EU-28 car imports originated from a number of emerging economies, including: South Africa, Mexico, Morocco and India. However, the most rapid change was recorded for EU motor car imports originating in Turkey, where, among others, Fiat, Ford, Honda, Hyundai, Renault and Toyota assembled vehicles.
Germany was, by far, the leading exporter of motor cars among the EU Member States in 2016 (see Table 5). More than two fifths (41.1 %) of all cars exported from the EU originated from Germany, while the United Kingdom was the only other Member State to record a double-digit share (10.8 %), just ahead of Spain (9.5 %); none of the remaining Member States accounted for more than 5.0 % of exports. The United States was the main market for cars exported from Germany and the United Kingdom, while Germany was the principal market for cars exported from Spain and the United Kingdom for cars exported from Belgium.
Germany was also the largest importer of motor cars among the EU Member States in 2016 (see Table 6); it accounted for 18.6 % of total imports, while double-digit shares were also recorded for the United Kingdom (16.3 %), France (11.5 %), Belgium (11.4 %) and Italy (10.0 %). The largest proportion of German imports originated from Spain, while Germany was the main origin of imports for the other four Member States.
Although the overall EU-28 trade surplus for motor cars was sizeable, there were only eight individual EU Member States that ran trade surpluses in 2016. By far the largest of these was recorded in Germany (EUR 94 billion), while exports also surpassed imports by more than EUR 10 billion in Spain, the Czech Republic and Slovakia.
Apparel and clothing accessories
The apparel and clothing accessories industry is another interesting case-study in terms of the impact that globalisation. It is characterised by distant supply chains, with subcontractors manufacturing large quantities of mass-produced clothing (often with very low labour costs); even high-end production, such as designer clothes, are predominantly manufactured away from their country of design, although their manufacture may be closer to the home (for example, in other European countries with lower labour costs).
Consumers are generally considered to have benefitted from the impact of globalisation in the clothing industry, as prices have been kept extremely low and a wide-range of ever-changing fashions are rapidly made available on the high street. On the other hand, the relocation of the clothing industry towards emerging and subsequently developing economies, principally in Asia, led to widespread job losses in Europe (and North America).
As with the iron and steel industry, the clothing sector is also characterised by overcapacity, which some manufacturers may use to their advantage in order to apply downward pressure on prices agreed with subcontractors. While China and India were at the forefront of the initial relocation of the clothing industry, the situation has subsequently evolved, with India specialising in high-end textiles and Chinese investment often being directed towards establishing new manufacturing facilities in countries such as Bangladesh, Sri Lanka, Vietnam, Laos or Cambodia.
China was the main origin of EU-28 imports for articles of apparel and clothing accessories, its share of the EU-28 import market rose from 24.3 % in 2002 to just over one third (34.6 %) in 2016 (see Figure 12); Turkey was the only other partner to record a double-digit share (11.2 %), while India (6.6 %) had the third highest share. A relatively high share of EU-28 imports originated from the rest of the world, suggesting that the manufacture of clothing was being relocated to a wide range of developing countries.
In 2016, the EU-28 ran a large trade deficit (EUR 61 billion) for articles of apparel and clothing accessories. The principal export markets for EU Member States were other Member States, the only exceptions being the relatively low value of apparel exports that left Latvia and Lithuania for Russia. The shift of clothing production within the EU towards countries with lower labour costs (principally those in the east or the south) was evident insofar as articles of apparel and clothing accessories accounted for a relatively high share of the total value of exports in Bulgaria, Portugal, Croatia, Italy, Romania and Spain (see Table 7).
China was the main origin of apparel and clothing accessory imports for nine of the EU Member States, including the five most populous and the Netherlands — which was the only other Member State to import more than EUR 10 billion of apparel and clothing accessory imports in 2016 (see Table 8).
Source data for tables and graphs
- International trade in goods - long-term indicators
- International trade in goods - aggregated data
- International trade in goods - long-term indicators
- International trade in goods - detailed data
- International trade in goods (ESMS metadata file — ext_go_agg_esms)