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The Patterns of World Trade
The visual below highlights the intricate web of global trade. While a part of the world’s trade in goods can be described as truly global, regional accounts for a very important share of overall global trade. Some 70% of the imports and exports of European Union countries, for example, was within the European Free Trade Association area in 2013. Similarly, nearly 49% of North American trade was within NAFTA.
Neighbours clearly play an important role in exports. Some 75% of Canadian exports, for example, went to the US in 2013, whereas Ireland was the fifth largest export destination for the UK, despite Ireland’s economy ranking only 48th in terms of total size.
There are interesting exceptions to this rule, too. India’s top trading partner in 2013 was the United Arab Emirates – Indian exports to the United Arab Emirates totalled more than US$38 million in 2013 (largely composed of jewellery), a very similar level to its exports to the US. India’s trade with its largest neighbours, China and Pakistan, is relatively small.
Free trade areas clearly form a very important dimension of the world’s import and export flows. The majority of exports within the EU and NAFTA were within the boundaries of the free trade area. However, this was also because the US and the EU are the largest consumer markets. Mercosur, another trading area which comprises five Latin American countries, remained more focused on external exports, despite attempts to increase the value of internal flows. Intra-Mercosur trade accounted for only 13% of total exports of its member countries in 2013, with the rest going to China, the US, or the EU. Brazil’s two leading trading partners, China and the US, accounted for 2.5 times more of its exports than Mercosur countries.
Other countries, like China, Germany or other Asia Pacific countries, have emerged as rather diversified global exporters. The visual also shows the increasing role of China as an importer rather than exporter. For many countries, like Australia, China has emerged as the top destination for exports, largely for mineral exports.
Exports hubs, such as Singapore, Hong Kong, Belgium and the Netherlands also feature prominently in the chart.