World trade in goods

Data extracted in May-June 2017

Planned update: November 2019

Highlights

The EU accounted for around 15 % of world trade in goods in 2016.

The EU was the world’s leading exporter of chemicals in 2016 but was highly dependent upon imports of mineral fuels.

In 2016, the United States remained the principal destination for goods exported by the EU.

Share of world exports of goods, selected countries, 2006 and 2016
(%)
Source: Eurostat (ext_lt_introle), United Nations (Comtrade) and International Monetary Fund (Direction of Trade Statistics)

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.

Patterns of international trade in goods have seen wide-ranging changes in recent decades reflecting, among others: trade liberalisation, the introduction of new technologies, different methods of industrial organisation and the development of global production chains. The relocation of some manufacturing activities abroad has led to a shift in the composition of international trade, reflected in a higher share of total trade for intermediate goods (parts and components), and lower shares for final (consumer) goods.

Statistics on international trade in goods

Note that the information presented in the previous article is based on statistics from the balance of payments (BOP) domain, while the statistics presented in this article are based on international trade in goods statistics (ITGS). There are a number of differences between the recommendations for international trade in goods statistics and the goods account of the balance of payments in terms of, for example, coverage, the time of recording, or methods of valuation; these differences and adjustments may have a substantial effect on the final reporting of figures for these two distinct sources. Moreover, the data collection exercise for international trade in goods statistics is far more detailed, literally covering thousands of individual products. That said, in many countries one of the most important uses of international trade in goods statistics is as a data source for estimating components of the balance of payments and national accounts.

It is also important to note that changes in business models have implications for the collection and the reliability of international trade in goods statistics. For example, new forms of industrial organisation have led to an increasing share of intermediate goods being traded within and between enterprises as part of global value chains: these flows continue to be assessed as gross measures, which may ‘inflate’ their true value, especially when intermediate goods are counted several times as they cross borders as part of intricate production chains (for example, as in the aerospace or motor vehicles industry).

Full article

World trade in goods: developments between 2006 and 2016

In 2016, the EU-28 accounted for around 15 % of world trade in goods

Figures 1 and 2 provide information on the share of world exports and imports of goods, showing developments between 2006 and 2016. The biggest change in the structure of global exports of goods was an expansion in the share of Chinese exports, which rose from 11.0 % of the total value in 2006 to 17.0 % by 2016.

While China was the leading exporter of goods in 2016 (EUR 1.9 trillion), the United States was the largest importer of goods (EUR 2.0 trillion), in both cases the EU-28 occupied second position, with both exported and imported goods valued at EUR 1.7 trillion. The EU-28, China and the United States have been the three largest global players for international trade in goods since 2004 (when China passed Japan). In 2007, China surpassed the United States as the second largest exporter of goods in the world and this pattern was reproduced again in 2014 when China overtook the EU-28 to record the highest share of exported goods, a position that was maintained in 2015 and 2016.

During this same period, the EU-28’s share of the global exports of goods declined, falling from 16.4 % in 2006 to 15.7 % by 2016, while the share of the United States was relatively unchanged (11.7 % in 2006 and 11.8 % in 2016). There was a contrasting pattern to developments in three other Asian economies as the Japanese share of exported goods contracted, while the shares recorded by Hong Kong and South Korea grew.

Figure 1: Share of world exports of goods, selected countries, 2006 and 2016
(%)
Source: Eurostat (ext_lt_introle), United Nations (Comtrade) and International Monetary Fund (Direction of Trade Statistics)

Between 2006 and 2016 there was rapid growth in the share of global trade for China

Although a large volume of literature exists concerning the rapid growth in the value of goods exported by China, less has been written about Chinese imports. These also rose at a very rapid pace, in part fuelled by increasing demand for consumer goods from an emerging middle class, but also reflecting the role played by China in global production chains, whereby some goods may be imported for processing or assembly before being re-exported as intermediate or finished goods.

The Chinese share of world imports for trade in goods rose from 8.6 % in 2006 to 12.4 % in 2016 (a gain of 3.8 percentage points). This was in contrast to a similar decline recorded for the EU-28 (as its share of globally imported goods fell by 3.8 points), while there was also a sizeable contraction in the American share (down 3.2 percentage points).

Figure 2: Share of world imports of goods, selected countries, 2006 and 2016
(%)
Source: Eurostat (ext_lt_introle), United Nations (Comtrade) and International Monetary Fund (Direction of Trade Statistics)

In 2016, the Chinese trade surplus for goods widened to EUR 460 billion

Table 1 extends the analysis by providing information on the trade balance and cover ratio for international trade in goods. In 9 out of the 16 countries for which information is shown the balance of trade in goods was reinforced between 2006 and 2016 (in other words, if there was a trade surplus this expanded and if there was a trade deficit this deteriorated). For example, the trade surplus in China widened from an initial EUR 141 billion in 2006 to EUR 460 billion in 2016, while the trade deficit in the United States expanded from EUR 702 billion in 2006 to EUR 720 billion by 2016, thereby continuing the pattern of the American deficit for trade in goods being the largest in world, a situation which was observed during the whole of the last decade.

However, there was a different development in the EU-28, as a trade deficit of EUR 216 billion for goods in 2006 became a surplus of EUR 60 billion by 2015, before a subsequent fall to EUR 38 billion in 2016. The trade position for goods in Australia followed a similar development passing from a deficit to a surplus, whereas the opposite pattern was observed in Canada (which moved from a surplus to a deficit).

While the trade balance provides information on the absolute value of trading positions, the cover ratio provides a relative measure that is based on the ratio (expressed in percentage terms) between the value of exports and the value of imports; when exports are higher than imports then the cover ratio will be above 100 %. In 2016, the highest cover ratios for international trade in goods were recorded for Russia (156.6 %), Brazil (134.7 %) and China (132.1 %). While cover ratios for Russia and Brazil were lower in 2016 than they had been in 2006 the opposite was true for China, confirming that its trade surplus for trade in goods was continuing to expand not only in absolute terms but also in relative terms.

By contrast, the lowest cover ratios for international trade in goods were recorded in India (73.0 %), Turkey (71.8 %) and the United States (64.6 %); in all three cases their cover ratios in 2016 were higher than those recorded in 2006, indicating that their trade deficits were narrowing in relative terms.

Table 1: Derived indicators for international trade in goods, selected countries, 2006 and 2016
Source: Eurostat (ext_lt_introle) and United Nations (Comtrade)

Since 2012, there has been a period of sluggish growth for international trade in goods …

The global financial and economic crisis had a considerable impact on the level of international trade in goods; this was in contrast to the pattern of development for trade in services (which was less affected by the crisis). That said, it is important to remember that the global value of trade in goods is approximately three times as high as that for services.

The downturn in the value of international trade in goods in 2009 was followed by a rebound the following year and subsequent growth through to 2012. Thereafter, the global value of world exports and imports stagnated during the four consecutive years through to 2016.

… that may, at least in part, be explained by changes to the structure of the Chinese economy

Aside from the impact of the global financial and economic crisis on levels of trade in 2009, another striking aspect of the information shown in Figure 3 is the rapid pace to the development of trade in goods for China during the period 2006-2015. Although Chinese exports and imports rose at a much faster pace than for any of the other leading trading nations, there is some evidence of a slowdown in Chinese trading activity; this is especially the case for Chinese imports since 2012, while the value of both Chinese imports and exports fell in 2016. A closer look at trade developments in some of the other leading trading nations shown in Figure 3 confirms that the value of goods exported from South Korea, the United States and the EU-28 also fell in 2016, while the same was true for goods imported into each of the countries/geographical aggregates shown.

This relatively weak performance for international trade in goods during the period 2012-2016 may reflect a number of different influences. One aspect is falling prices for raw materials and consumables, including energy (for example oil) prices, which have lowered the overall value of trade in goods. Another explanation may be linked to structural changes within the Chinese economy, where policy changes have led to a shift away (to some extent) from manufacturing-based, export-led economy and somewhat more towards one which is more focused on domestic consumption. Some economists have extended this analysis, hypothesising that the slowdown in global trade reflects structural adjustments in global manufacturing, as (Chinese) enterprises have internalised whole supply chains, such that intermediate goods are less likely to flow backwards and forwards across borders, but are rather produced to a greater extent (and in some cases exclusively) on the Chinese territory before eventually being exported (only once) as a finished product. An alternative view is that the previous growth in the value of international trade in goods has, to some degree, been substituted by the growth in the exchange of information/flows of data associated with the digital economy.

Figure 3: Developments for trade in goods, selected countries, 2006-2016
(2006 = 100)
Source: Eurostat (ext_lt_introle), United Nations (Comtrade) and International Monetary Fund (Direction of Trade Statistics)

International trade in goods by product

In 2016, the EU-28 was the world’s leading exporter of chemicals …

Table 2 details the leading global exporters and importers for a range of different product groups (based on the standard international trade classification (SITC Rev. 4) of the United Nations). In 2016, the EU-28 had the highest value of exports for food, drinks and tobacco and for chemicals and related products, whereas China was the leading exporter for machinery and transport equipment and for other manufactured goods and Russia for mineral fuels and lubricants.

… but was highly dependent upon imports of mineral fuels

The EU-28 also had the highest level of imports for mineral fuels and lubricants, reflecting its high level of dependency for these goods (importing more than half of the energy it consumes), while a similar pattern was observed with respect to raw material imports into China; the United States occupied the position of having the highest share of global imports for a broad range of manufactured goods.

Table 2: Highest levels of trade for selected SITC products, selected countries, 2016
(billion EUR)
Source: Eurostat (ext_lt_intertrd) and United Nations (Comtrade)

While the leading global exporters and importers in absolute terms are unsurprisingly some of the largest economies, Table 3 provides an alternative analysis focusing on relative specialisation ratios; these are based on the share of total exports/imports accounted for by a particular product, comparing the shares of one country with the average for all 16 reporting countries (analysed in chapter Global developments in trade and investment). For example, the share of raw materials in the total value of goods exported by Australia was 8.8 times as high as the average for the 16 reporting countries, while the share of raw materials in the total value of goods imported by China was 2.7 times as high as the average.

The results based on this relative measure show a greater variation, with Brazil being the most specialised country for exporting food, drinks and tobacco, Australia for raw materials, Hong Kong for machinery and transport equipment, and Turkey for other manufactured goods. The data confirm the EU-28’s position as a leading exporter of chemicals and related products as well as Russia’s top position (among these economies) for mineral fuels and lubricants.

Table 3: Highest relative specialisation ratios for trade in SITC products, selected countries, 2016
(%, average = 100)
Source: Eurostat (ext_lt_intertrd) and United Nations (Comtrade)

Developed economies often specialise in exporting high value goods, while emerging economies tend to focus on exporting natural resource endowments or lower value goods

Table 4 reverses the focus of the analysis, detailing for each country where its relative trade specialisation lies. The information presented confirms the role played by the natural endowments of particular goods. For example, Australia, Brazil, Canada and South Africa were all relatively specialised in exporting raw materials, whereas these products accounted for the highest import specialisation ratio in China. It is also interesting to note that while several developed economies were relatively specialised in exporting high value goods such as chemicals and related products for the EU-28 or machinery and transport equipment for Japan, their highest import specialisation ratios were recorded for more basic goods, mineral fuels and lubricants for the EU-28 and food, drinks and tobacco for Japan.

Table 4: Highest relative specialisation ratios for trade in selected countries, by SITC products, 2016
(%, average = 100)
Source: Eurostat (ext_lt_maineu) and United Nations (Comtrade)

International trade in goods by partner

Traditionally, trade in high value goods was relatively concentrated between developed economies, while international trade flows between the developing and developed world were largely concentrated on the supply of raw materials and basic goods (such as food). However, globalisation has resulted in some changes to the geographical orientation of trade, through the emergence of new trading relationships, often at the expense of trade with more developed economies.

The rapid growth of China in terms of its integration into the global economy during the last couple of decades was given added impetus by China’s accession to the World Trade Organisation (WTO) in 2001. Within the context of globalisation, it is important to note that China often plays a role as a ‘hub’ for global production chains, often importing semi-finished (intermediate) goods before assembling finished goods for re-export. As such, trade flows with China may in some cases be interpreted as flows that represent a wider Asian region, insofar as China sources many of its intermediate parts/components from its surrounding economies.

In 2016, the United States remained the principal destination for goods exported by the EU-28

Table 5 shows bilateral trade relationships for goods in 2006 and 2016 and confirms the rise of China as a trading power, often to the disadvantage of established global players. While the United States remained the EU-28’s largest export market for goods in 2016 (slightly ahead of China), it had already been supplanted by China as the main origin of imported goods into the EU-28 in 2006 (a position that was reinforced by 2016).

A similar picture was observed in other developed economies, for example: the highest share of Japanese exported goods was destined for the United States, while China was the main origin of imported goods into Japan; China also became the main origin of imports into the United States (replacing the EU-28), although the EU-28 and Canada remained the principal destinations for American exports.

Table 5: Main trading partners for international trade in goods, 2006 and 2016
Source: Eurostat (ext_lt_intertrd) and United Nations (Comtrade)

The EU economy is one of the most ‘open’, global economies with import tariffs on industrial products among some of the lowest in the world. For example, in 2016 only 1.0 % of non-agricultural products faced import duties in excess of 15 % (see Table 6), while the simple average of tariffs applied to non-agricultural products was 4.3%. The EU also has a comprehensive network of arrangements for preferential trade that goes beyond more general WTO rules, for example, giving many developing countries preferential access to its markets for ‘everything but arms’.

Table 6: Summary table for tariffs on non-agricultural products, 2016
Source: World Trade Organisation (Tariff profiles)

Source data for tables, figures and maps (MS Excel)

Direct access to
Other articles
Tables
Database
Dedicated section
Publications
Methodology
Legislation
Visualisations
External links






International trade in goods - long-term indicators


International trade in goods - long-term indicators