(3-A) ~ Import/Export Data ~
(3-A-a) ~ Global Data ~
(3-A-b) ~ Regional and National Data ~ [Ab1]~China, [Ab2]~Indonesia, [Ab3]~Vietnam, [Ab4]~Africa, [Ab5]~North America, [Ab6]~Japan, [Ab7]~Europe, [Ab8]~Asian Sub-Continent, [Ab9]~Latin America, ~
(3-B) ~ Private Capital Flows ~ [B0]~Global, [B1]~Developing Countries, [B2] China, [B3]~United States, [B4]~Latin America, [B5]~Africa, [B6]~OECD Countries, ~
(3-C) ~ Ocean Shipping and Highways ~
(3-D) ~ Trade Deficits, Current Account Deficits and Surpluses ~
(3-D-a) ~ US Data ~
(3-D-b) ~ Non-US Data ~
(3-E) ~ Human Mobility (Immigration)
(3-F) ~ Productivities ~
(3-G) ~ In-Sourcing/ Out-Sourcing ~
(3-H) ~ Privatization and GATS ~
(3- I) ~ Conditions that Affect Benefits and Costs of Globalization ~
(3-J) ~ Effects of Globalization on Consumption ~

Go to List of References ~ Go to Table of Contents of this document ~ Go to "Globalization: The Convergence Issue" ~
Go to Home Page of this entire website ~

Declining Cost of Transportation and Communication, 1920-1990 (I.M.F. data)
(now in gci-analysis1.doc Section (1-A) Part [1A1] 10/22/08) {w60}

(a) Average ocean freight- and port charges per ton ($US)
(b) Average revenue/ passenger-mile ($US)
(c) 3 minutes: NY/ London ($US)
(d) Index, 1990=100

Global Air Transportation: 1950-1998 (I.M.F. Data) (now in \global\gci-analysis1.doc Section (1-A) Part [1A1] 10/22/08) {w100}

People = Billions of passenger-kilometers . . . Freight = Billions of ton-kilometers

Source: Vital Signs 1999, Worldwatch Institute

According to the National Council of Textile Organizations, Chinese shipments of textiles and clothing to the US soared more than 11-fold since quotas were lifted in 2002, while the share of that market held by 50 other countries plunged to 28% from 90% (04M4).

Top countries or regions that depend on apparel and textile exports; apparel and textile exports as a percentage of merchandise exports (04M4) (Source: World Bank) {w30}

At $350 billion/ year, world trade in textiles and clothing accounts for 8% of all trade in manufactured goods (04M4). Comments: On 1/1/05 a major barrier to trade in textiles and clothing was eliminated globally. This resulted in huge increases in exports from China, and extreme duress among numerous other developing world countries.

Figure 9.1 (Converted to a table) ~ Percent of Total Merchandise Exports that are Agricultural (from a plot that has been smoothed) (03S4) {w70}

Agricultural Imports and Exports of Least-Developed Countries during 1961-2000 in Millions of US$ (from a plot - data has been smoothed) (03S4) {w80}

Agricultural Trade Surpluses and Deficits of Developing Nations during 1961-2000 in Millions of US$ (from a plot - data has been smoothed) (03S4) {w70} ~

Net trade of developing countries (Negative values denote net imports.) (03S4) {w70}

Columns 2-4 are in Billions of US$ (current)

Columns 5-6 are in Billions of US$ of 1997/99

The surplus in the overall agricultural trade balance of developing countries has virtually disappeared over the past 40 years, and the outlook to 2030 suggests that, as a group, they will increasingly become net importers of agricultural commodities (03S4).

In 1961/63 developing countries as a whole had an overall agricultural trade surplus of US$6.7 billion, but this gradually disappeared so that by the end of the 1990s agricultural trade was broadly in balance, with periodic minor surpluses and deficits (03S4).

The share of developing countries' agricultural exports in their overall exports fell from nearly 50% at the beginning of the 1960s to barely more than 5% by 2002 (03S4). Even for the group of the 49 LDCs, where agriculture is often the largest sector of the economy, the share of agricultural exports declined from more than 65% in the early 1960s to less than 15% by 2000 (Figure 9.1 - in Section (3-A-a)) (03S4).

Agricultural trade has also grown during the last 50 years, but only at about the rate of global economic output (03S4).

The last 50 years have witnessed a global merchandise trade increase of 17-fold, more than three times faster than growth in world economic output (03S4).

Top importers and exporters in 2001 merchandise trade (in US$billions) (Wall Street Journal (9/9/03)) {w50}

*Does not include trade inside the EU

Source: World Trade Organization

Global market for agricultural products: $850 million (02P2).

Global trade in manufactured goods was almost $4.5 trillion in 2001 (02P2).

The shoe business moved from Japan in the 1960s to Korea and Taiwan in the 1970s and to China and Indonesia in the 1980s (02D1). Comments: These shifts are easily related to changes in wages in the countries involved. Indonesia is now apparently losing out to Vietnam and China (02D1).

Percentage of Nike Footwear produced by Country of Manufacture (02D1) {w30}

The world has 60,000 multinational corporations (in 2000, vs. 35,000 in 1990 and 7000 in 1970), with 800,000 foreign affiliates and $15 trillion in annual sales (02F2) (01U5).

Since the end of WWII, the proportion of trade as a share of global income has risen from 7 to 21%. In the US, international trade now accounts for about 24% of GDP. Trade volume has increased 15-fold over the past four decades, vs. a six-fold increase in production. Developing countries now account for about 25% of world trade, vs. 20% a decade ago (Renato Ruggiero, "The High Stakes of World Trade", Wall Street Journal (4/28/97)). Comments: Does this 25% include just exports, just imports, or exports + imports?

A chart in the Wall Street Journal (12/16/93) shows total value of world exports and imports roughly doubling every 10 years during the period 1960-1992, with the total value of world exports and imports in 1992 being $7.5 trillion.

A common mental image is of capital flowing from high-wage, rich countries to the low-wage poor countries in order to produce goods for export back to the rich countries. In reality, the majority of such investments flow from one rich country to another. Most of the output from such investments is sold in the country where it is made, or in third countries, rather than being exported back to the investor's home country (95W1).

Between one-third and one-half of all trade is "intra-firm" trade (transactions between a parent firm located in one country and its affiliates in another country) (95W1).

Foreign direct investment has grown twice as fast as international trade over the past 25 years, while trade, in turn, has grown twice as fast as world output (95W1).

Stock investment across national boundaries as a percentage of total world stock turnovers: 6.2% in 1979: 11% in 1984: 14% in 1989 (Solomon Bros. International Ltd. Data).

World Exports plus Imports in trillions of US dollars (International Monetary Fund data) (from a plot) {w70}

Comments: Trade volume appears to roughly triple every decade.
Comments: For perspective, global GDP in 1997 was about $25 trillion.

Real growth of exports, 1985-1996: Developing economies: 217%, World: 94.2%, Industrialized economies: 69.6% (DRI/McGraw Hill data, Wall Street Journal (2/24/97)).

Go to Top of Part [Aa] -Global Data

Part [Ab] ~ REGIONAL AND NATIONAL DATA ~ [Ab1]~China, [Ab2]~Indonesia, [Ab3]~Vietnam, [Ab4]~Africa, [Ab5]~North America, [Ab6]~Japan, [Ab7] ~Europe, [Ab8]~Asian Sub-Continent, [Ab9]~Latin America,

In the first month after the end of all quotas on textiles and apparel around the world, imports (of textiles and apparel?) to the US from China jumped 75% (David Barboza and Elizabeth Becker "Free of Quota, China Textiles Flood the U.S.", New York Times (3/10/05)).

57% of Chinese exports - nearly all of its manufactured goods - come from multinational companies (04F3).

A WTO study indicates that China could capture 56% of the US apparel market after the quotas are removed on 1/1/05, vs. 12% in 2001 (04M4).

China's total exports as a % of GDP (from a graph) {w70}

[w25}

China's total exports in 2002: $325.57 billion (03U2).
China's total imports in 2002: $295.22 billion (03U2).

China's total trade in 2001 was $510 billion - 15 times greater than in 1980. 41% of exports went to the US (02I1).

China is the world's 6^th largest trading nation and is expected to rank second by 2010 (02I1).

Factories in Dongguan China produce 37% of the world's disk drives and 10% of its computer monitors in 2001 -- plus tens of millions of scanners, printers and DVD players (02I1).

In 2001, China shipped $4.6 billion in furniture to the US (02I1).

China's Exports and Imports (in US $billions) (from a chart) (Sources: Ministry of Foreign Trade and Economic Cooperation; China National Bureau of Statistics) (02L2) {w45}

Comments: Much import growth is probably food needed to deal with growing populations and degrading croplands.

About $10 billion in Chinese-made merchandise makes it to Wal-Mart stores annually (02L1).

China's exports and foreign investments in China, in $billions (data of National Bureau of Statistics of China) (from a chart) (02l1). {w65}

In 2001, 20% of everything Philips made worldwide came from China, and that percentage is rising rapidly (02L1).

Between 1998-2001, total US imports of household cooking appliances from China more than doubled to $640 million (02L1).

During 1998-2001, Chinese exports of TV and audio equipment to the US rose 13%/year to $6 billion in 2001; tools and hardware rose 23%/year to more than $1.5 billion in 2001; sporting goods rose 16%/ year to $2 billion in 2001 (02L1).

China's high-tech exports to the US are growing faster than any other category -- up 47% in the first 7 months of 2002 from a year earlier (02L1).

In July 2002, exports to the US of China-made electronic products hit $1.2 billion, up 12.5% from June 2002 (02L1).

A single Chinese company accounts for 40% of all microwave ovens sold in Europe (02L1).

China makes more than 50% of cameras sold worldwide, 30% of air conditioners and TVs, 25% of all washing machines, and nearly 20% of the refrigerators (02L1).

China is now the world's fourth largest industrial base in terms of value of goods produced, behind the US, Japan and Germany (02L1).

Half of China's exports now come from foreign exporters or their joint ventures in China (02L1).

Chinese exports in 2001: $266 billion (02L1).

US Imports from, and Exports to, China ($billions) (Datastream International, late 1999) (from a graph in Wall Street Journal) {w50}

Philips exports nearly 2/3 of its $5 billion in goods produced in its 23 Chinese factories (02L1).

Total Chinese-Japanese Trade (in billions of US$) (from a chart) (Japanese Ministry of Finance data) {w40}

Indonesia's shoe exports in 2006 are expected to increase by 20% over the 2005 figure of $1.5 billion (150 million pair of shoes). In 1996 Indonesia's footwear industry exports peaked at $2.5 billion. (About 200,000 Indonesians lost their jobs during the Asian financial crisis of 1997-98.) (06W4) Comments: The financial crisis of 1997-1998 is widely attributed to the trade rules of globalization that enables multinational corporations to instantly withdraw their financial investments from any nation in which they have financial investments. Developing world nations are demanding that this provision of trade rules be changed in future negotiations. Nations like Chile that did not allow instantaneous withdrawal of financial assets did not suffer directly from the financial crisis of 1997-1998.

In Indonesia there is no evidence that better-paying high tech jobs are replacing the lower-tech jobs being lost (the "Flying Geese" model), e.g. the movement of shoe manufacturing to Vietnam and China (02D1).

Indonesia was ruled for 32 years until 1998 by the dictator Suharto. During that time, Indonesia failed to build such key institutions as a functioning judiciary, and is unable to lay down clear and consistent policies since these matters were redressed from the Suharto family or from a general. The result: political turmoil - one reason why shoe manufacturers are fleeing Indonesia. Another reason: Vietnam and China do not allow workers to organize - like Indonesia does (02D1).

Vietnam's imports, mostly from the West, totaled $1.9 billion in 1991. 68% of it was raw materials and fuels. Vietnam's exports in 1991 totaled $1.8 billion. 53.4% was non-manufactured - fish, forest products and minerals (Pittsburgh Post Gazette (2/5/92)). Comments: The over-fishing and deforestation in Vietnam would suggest that this export mix is non-sustainable.

Madagascar's exports to the US in the first half of 2001 totaled $132.8 million, vs. $62.7 million the year before (Helene Cooper, Wall Street Journal (1/2/02)). Comments: This appears to be a consequence of the trade agreement between the US and African nations.

Imports of goods and services into the US as a percentage of GDP (smoothed curve from a graph) (06U1). {w60}

(up 3%/ decade during 1985-2005)

Market Share of US sock makers (from a chart) {w50}

Sock imports into the US from China (in millions of US dollars) (from a chart): {w50}

(Greg Hitt, Dan Morse, "Once Close-Knit Sock Industry Splits Over Trade Restrictions", Wall Street Journal (5/27/05), p. A1.)

In the first month after the end of all quotas on textiles and apparel around the world, imports (of textiles and apparel?) to the US from China jumped 75% (David Barboza and Elizabeth Becker "Free of Quota, China Textiles Flood the U.S.", New York Times (3/10/05.)).

A WTO study indicates that China could capture 56% of the US apparel market after the quotas are removed on 1/1/05, vs. 12% in 2001 (04M4).

US Imports of Chinese Auto Parts in billions of US dollars (in gcib.html - Appendix B) (Norihiko Shirouzu, "Big Three's Outsourcing Plan: Make Parts Suppliers Do It", Wall Street Journal (6/10/04), p. A1.) (From a chart) {w60}

In the first half of 2003, imports snagged nearly 2 out of every 3 dollars in the growth of US manufacturing shipments over the same period in 2002. (Data from the Manufacturers Alliance) (03A1)

US imports (of goods and services?) in 2002: $1410 billion (03U1).

US exports of goods and services in 2002: $973 billion (03U1).

US manufacturing exports in 2002: $563 billion (???) (03U1).

Trade between Russia and the US (from a graph) (Source: Commerce Department and Energy Information Administration) (02H3) {w60}

{w30}

Exports by US farmers: $50 billion/ year (02P2). Comments: In 2004 the US became a net importer of food (in dollar units).

Exports by US manufacturers: almost $600 billion/ year (02P2).

In 2001, the US imported 97.3% of the 1.78 billion pairs of footwear sold in the US (Jim McKay, Pittsburgh Post Gazette (12/22/02). (In gci.html, Ed. 3)

Market Share of US High-Tech Industries in percent (US Council of Competitiveness data) (Wall Street Journal (1/28/91)) {w30}

Average Monthly US Imports and Exports (Billions of US dollars) (US Commerce Department Data) (Multiply by 12 to get annual figures) (Wall Street Journal (5/22/01)) (from a graph) {w35}

Comments: Are these data for both goods and services?

During 1950-1993, the value of (US?) trade, in real (inflation-corrected) terms, has grown 6.5%/ year (Karen Pennar, Business Week (8/2/93)).

US Imports and Exports (trillions of US dollars) (US Department of Commerce data) (Wall Street Journal (5/24/02)) {w50}

Comments: 1997 data are from Wall Street Journal (5/22/01).
Comments: Are these data for both goods and services?

US Exports as a percentage of GDP (adjusted for inflation) (US Commerce Department data) (from a chart) {w55}

Exports accounted for 11% of all US output in 1996 (Wall Street Journal (11/24/97)).

The US bought 18.7% of the world's exported goods in 2001, up from 14% in 1991 (02P1).

Cotton Production (US) and Exports (millions of 480-lb. bales) (National Cotton Council data) (from a plot): {w40}

P.340 of "An Assessment of the Forest and Range Situation in the US" (1980) FS-345 has data on imports and exports of timber products during 1950-1977.

Intense competition from Canada and China has led to widespread plant closings and layoffs in the US furniture industry. Furniture imports to the US in the second quarter of 2002 were 71% higher than in 1999. Furniture imports now account for more than 40% of the US residential furniture market (02H1). Furniture making has become one of China's fastest-growing industries. In the first 7 months of 2002, exports rose 35% to $3.04 billion, outstripping growth of all other export commodities except high-tech products. China's furniture exports are poised to increase 30%/ year during the next 5-6 years (02H1).

US Imports and Exports with Japan (US Census Bureau Data) (from a plot in Wall Street Journal) (in billions of $US) {w30}

Total Merchandise Trade Volume between the US and its North American Free Trade Agreement (NAFTA) Partners in billions of $US (Wall Street Journal (7/20/99)) (from a bar-chart) {w40}

Japan bought 5.5% of the world's exported goods in 2001, down from 6.5% in 1991 (02P1).

Germany bought 7.7% of the world's exported goods in 2001, down from 10.7% in 1991 (02P1).

Exports of private U.S. services to India, in billions of dollars/ year (04H2) (from a graph) {w45}

India's software exports have increased at a rate of 43%/ year over 1990-1994 (94C1).

Mexican Exports of Confections to the US (in millions of US$) (from a chart) (US Department of Commerce data) (Joel Millman, Wall Street Journal (2/13/02)). {w45}

Go to Top of Part 3-A-b -Mobility - Regional and National Data ~
Go to Table of Contents of this Chapter 3 - Mobility ~ Go to List of References ~ Go to Table of Contents of this document ~
Go to "Globalization: The Convergence Issue" ~ Go to Home Page of this entire website ~

SECTION [3-B] ~ PRIVATE CAPITAL FLOWS ~ [B0]~Global, [B1]~Developing Countries, [B2]~China, [B3]~United States, [B4]~Latin America, [B5]~Africa, [B6]~OECD Countries, ~

More than 40% of the imports into the US are from overseas subsidiaries of American companies (Louis Uchitelle, "Globalization: It's Not Just Wages", New York Times (6/17/05)).

Global foreign direct investment (FDI) inflows in 2004 are estimated to have risen by 6% to $612 billion (See table below). As in 2003, however, flows to developed countries slumped, but that decline was offset by rising flows to developing countries and Central and Eastern Europe (CEE). "This increase is good news for developing countries, which now account for an estimated 42% of world FDI inflows, compared to 27% during 2001-2003"(04U1).

The $321 billion flows to developed countries (See table below) marked a 16% drop from the previous year´s $380 billion. The US topped China ($121 billion), becoming again the world's largest recipient (04U1).

Inflows to developing countries in 2004 are estimated to have totaled $255 billion (See table below), up 48% from 2003 and a historic high. That increase was felt in each developing region (04U1).

• FDI inflows to Africa account for 3% of global FDI inflows. A large part of this increase stems from investment in natural resource exploitation, driven by a strong rebound in global commodity prices and demand for diamonds, gold, oil, platinum and palladium. As a result, such natural-resource-rich countries as Algeria, Angola, Libya, Mauritania, Nigeria and South Africa received more FDI.
• FDI flows to Latin America and the Caribbean in 2004 were up 37% to $69 billion. (04U1).

The table below tabulated foreign direct Investment inflows in billions of US dollars (04U1). {w55}

Source: UNCTAD (www.unctad.org/fdistatistics) and UNCTAD's own estimates
~(a) Revised data
~(b) Preliminary estimates. See Note below.
~(c) The 8 CEE countries that acceded to the EU in 2004 are included under this heading.
Note: World FDI inflows are projected on the basis of 101 economies for which data are available for parts of 2004, as of 12/29/04. Data for most economies are estimated by annualizing their data from the first three quarters. The proportion of inflows to these economies in total inflows to their respective region or subregion in 2003 is used to extrapolate to the 2004 data for Africa, Asia and the Pacific and Central and Eastern Europe. For 2004, Latin America and the Caribbean is estimated by annualizing the data from the first three quarters for principal host economies and by replicating the 2003 data for the economies for which no data are available so far.

UNCTAD Handbook of Statistics 2002 (www.unctad.org/en/docs//tdstat27_enfr.pdf) (439 pp.) (2.55 MB)

UNCTAD Handbook of Statistics 2002 provides a comprehensive collection of statistical data relevant to the analysis of world trade, investment and development, for individual countries and for economic and trade groupings. Data are presented in an analytical way, through the use of rank orderings, growth rates and other special calculations, with a view to facilitate their interpretation. The Handbook is a valuable tool for research, policy-making and education, which can also be used in conjunction with the CD-ROM or the on-line version. The UNCTAD Handbook of Statistics 2002 offers to users reliable coherent data on the following subjects: International merchandise trade: values, trends and regional trade zones; Trade in services; Export and import structure by products and by regions of origin and destination, and related concentration indices; Volume and terms of trade indices; Commodity prices and relevant price indices; International financial data: current accounts, foreign direct investment, external indebtedness, workers' remittances, etc.; Selected indicators of development: GDP and various social and telecommunications indicators; In addition to the traditional broad coverage of development statistics, the 2002 edition offers several new data sets: Export/ import concentration indices by product; Diversification and structural change in trade indices; Instability indices of prices of primary commodities; Environment protection and tourism indicators. (This information is also in Section (3-B) - Private Capital Flows.)

World Investment Report 2003 ~ FDI Policies for Development: National and International Perspectives

Recognized worldwide as the most up-to-date and comprehensive source of information as well as analysis regarding foreign direct investments, the World Investment Report (WIR) highlights the major sectoral and geographical changes in the pattern of Foreign Direct Investment (FDI) flows every year, with special attention being paid to developing countries. This year's report focuses on the FDI downturn, its reasons and the role of national policies and international investment agreements (IIAs) to attract FDI and benefit from it. The report includes a substantial statistical annex.

CONTENTS
PART I. FDI FALLS AGAIN - UNEVENLY
Chapter 1: FDI Down 21% Globally
Chapter 2: Uneven Performance Across Regions

PART II. ENHANCING THE DEVELOPMENT DIMENSION OF INTERNATIONAL INVESTMENT AGREEMENTS
Chapter 3: Key National FDI Policies and International Investment Agreements
Chapter 4: Eight Key Issues: National Experiences and International Approaches
Chapter 5: The Importance of National Policy Space
Chapter 6: Home Countries and Investors

ISBN: 9211125804 319 pp. $49.00
www.un.org/Pubs/whatsnew/e03wir.htm (visited 7/21/04)

Foreign Direct Investment Inflows, in Country Groups (in millions of US$) {w65}

---minus China
(** =(1)+(2)+(3)) Line(1)=(4)+(5)+(6) ## (103,400 in 1997)
Source: UNCTAD World Investment Report, 2002

Foreign Direct Investment outflows, in Country Groups (in millions of US$) {w70}

Source: UNCTAD World Investment Report, 2002 (Table 6.2, pp. 274-281)

Regional Distribution of FDI Inflows and Outflows (in billions of US$) {w100}

# Cumulative (Col. 8) includes figures for 1995 through 2001 only.
* World totals include data from Eastern Europe that are not part of either developed- or developing countries.
Source: UNCTAD, Handbook of Statistics 2002, New York and Geneva (2002) 439 pp. 2.55 MB http://www.unctad.org/en/docs/tdstat27_enfr.pdf (visited 7/21/04).

Regional distribution of FDI inflows and outflows (in billions of US$) (03S5) {w70}

Source: UN, Promoting linkages. In World Investment Report. New York and Geneva (2001).
Comments: Note wide disparities between inflows in this table (Col. 3) and the UNCTAD table (Col. 4) above.

Between 1989/94 and 2000, global FDI inflows increased more than six-fold, from US$200 billion/ year to US$1270 billion/ year (01U2) (UN, 2001c). The growth in FDI exceeded by far the growth in trade flows. Between 1991-95 average growth rate of FDI was 21%/ year vs. 9% for exports of goods and non-factor services. Between 1996-99, FDI grew at 41%/ year and exports grew 2%/ year (03S5).

"Foreign Owners and Plant Survival", http://papers.nber.org/papers/w10039.pdf
In recent years, international capital flows of all types have increased dramatically and most governments have been actively encouraging inflows of FDI. However, concerns remain that reliance on foreign multinationals may be a risky development strategy as foreign firms are likely to be less rooted in the local economy and may be quicker to close down production. This paper asks whether foreign owners are more likely to close plants than domestic owners. In Indonesia, plants with any foreign ownership are far less likely to close than wholly-owned domestic plants. However, the lower probability of shutdown is a result of the larger size of foreign plants rather than their nationality of ownership. Controlling for plant size and productivity, the authors find that foreign plants are significantly more likely to close than comparable domestic establishments (NBER Working Paper No. w10039, PDF 430K (October 2003)).

Private capital flows to emerging market economies (in billions of US$)
(Wall Street Journal (12/9/02)) (Source: Institute of International Finance) (from a chart) {w65}

{w45}

Comments: 1997 was the year of the meltdown in Southeast Asia that produced a rapid withdrawal of foreign capital. (in gci.html)

Multinational corporations' turnover of goods and services in the last half of the 1980s totaled $44 trillion according to a UN report (Richard L. Holman, Wall Street Journal (7/15/94)).

Multi-national corporations numbered more than 35,000 in 1990 and totaled $225 billion in that year. (7000 in 1970; 60,000 in 2000 (02F2)) US multinational corporations invested mainly in Latin America, Japanese firms in Asia, and European concerns in Eastern Europe and Africa (Richard L. Holman, Wall Street Journal (7/15/94)).

42% of all US trade in goods, $950 billion in 2004, occurs between arms of the same companies, including US-based companies trading with their foreign divisions, as well as foreign companies trading with their US arms. Nearly 90% of US imports from Ireland are such "related party" trade, as are 74.6% from Singapore, 62.1% from Germany and 61.1% from Mexico. This helps to explain why the falling dollar, which has been falling for 3 years now, has had so little influence on the US trade deficit. Also, a growing share of related-party trade comes from developing regions such as China which enjoy a cost advantage that even a sharply falling dollar doesn't erase (Timothy Aeppel, "Dollar-Deficit Ties Go Awry", Wall Street Journal (5/31/05) p. A2).

Between 1991-96 Asia averaged $59.5 billion in foreign investment a year, compared with Latin America's $27 billion and Africa's $4.6 billion ("Latin America's Parallel Path", Africa News Service (2/4/05)).

Private capital flows to developing countries (cumulative-1991-2000) were $2.3 trillion in 2000 dollars (source: World Bank) (02F2).

Net Private Capital Flows to Developing Countries ($billions) (World Bank data of around 1997) (From a plot in Wall Street Journal of unknown date) {w50}

1996 recipients: China 52.0; Mexico 28.1; Indonesia 17.9; Malaysia 16.0; Brazil 14.7; Thailand 13.3.

US Direct Investment in ASEAN (in billions of US dollars) (Commerce Department data) (from a graph): {w50}

China is attracting more than 2/3 of total foreign direct investments coming into East Asia (02W2).

"Round-Tripping and China's FDI Inflows: The Hong Kong Perspective"
http://www.adbi.org/PDF/cf030728/FDI%20roundtripping.pdf
There is no doubt that part of China's FDI inflows belongs to the return of Chinese capital flight. Hong Kong plays an important role in the process of this round tripping and in China's integration into the world economy. In the past two decades, about 40-60% of China's FDI inflows were from Hong Kong every year. In the extreme case and with a loose definition, China's round tripping FDI could be as large as 40-60% of the total. Paper presented by Geng Xiao of the University of Hong Kong at the FDI in Asia and Assessing the China Effect Inception Workshop in August 2003 (PDF).

China: An Emerging FDI Outward Investor
http://r0.unctad.org/en/subsites/dite/fdistats_files/pdfs/China_Researchnote.pdf
China is not just a magnet for FDI, but it is increasingly also a source of FDI, says UNCTAD in a research note dated December 4, 2003. The recent merger of the television and DVD operations of TCL (China) and Thomson (France), giving majority control to the former, highlights this trend. Average annual outward FDI flows have grown from $0.4 billion in the 1980s to $2.3 billion in the 1990s, contributing to an accumulated book value of at least $35 billion of Chinese outward FDI stock (on a balance-of-payments basis) at the end of 2002 (PDF).

In the past 2 decades, China has received well over $400 billion in foreign capital in direct investments (02L2).

Foreign direct investment in China is expected to reach $50 billion in 2002 (02L2).

Foreign investment in China is expected to hit a record $50 billion in 2002 (02L1).

Toshiba is building one of the world's biggest laptop factories in China, with 2003 output to be 750,000 units, and 2004 output to be 2.4 million -- the bulk of which is destined for export (02L1).

Motorola says its total investment in China will reach $10 billion within 4 years, up from $3.7 billion in 2002 (02L1).

Foreign investment in China over the past 2 decades: more than $600 billion. The introduction of modern manufacturing techniques was instrumental in promoting this flood (02L1).

Fed by over-investment, China has built up a glut of manufacturing capacity so huge that China could produce nearly twice what it does. The average Chinese factory uses less than 60% of its capacity. China sold $150 billion of goods abroad in 1996, almost as much as Malaysia, Thailand, the Philippines and Indonesia combined. Chinese unemployment is rising (Joseph Kahn, Wall Street Journal (7/14/97)). Comments: China has an essentially infinite supply of unskilled labor willing to work for $0.60/ hour. This is putting pressure on wages and economic conditions throughout the Far East and Southeast Asia.

Foreign direct investment in China in 2001 totaled $46.8 billion (UN Conference on Trade and Development data). The comparable figures declined in 2001 for South Korea, the Philippines and Malaysia. Taiwan stayed about the same, and Indonesia saw some divestment (02W1).

Number of Japanese Private Investment projects in China (from a plot) (Chinese government data). {w45}

Japanese Direct Investment in China (in billions of US dollars) (Japan's Ministry of Finance data) from a graph {w45}

Note: 1993 data is an estimate.

(Unknown) "Foreign Ownership of US Domestic Industries," http://www.economyincrisis.org/content/ownership, visited 2/16/07.

This data comes from the Internal Revenue Service, and is current as of 2002 (latest data available).

Foreign ownership refers to ownership of assets of a particular industry by foreign controlled domestic US Corporations (FDC) 50% or more owned by a foreign entity. {w70}

FOREIGN OWNERSHIP OF MAJOR U.S. INDUSTRIES {w45}

Deal values of acquisitions of U.S. companies by companies from emerging markets between 1997 and 8/5/05 (Amounts are in billions of US$) (Source: Bank of America) (05H3). {w75}

During the first 7 months of 2005, companies from less-advanced economies were behind 70 deals to buy US companies with a total value of $10+ billion. Those 70 deals accounted for less than 2% of all acquisitions during that period. The 70 deals reflect one effect of a current account surplus with the rest of the world that is expected to hit $300 billion in 2005. Those deals also reflect a desire by foreign companies to get closer to US customers and to get access to financial markets (05H3).
Bank of America projects that developing countries will spend about $16 billion in 2005 on acquisitions in the US; this is up from $12.8 billion in 2004 (05H3).

http://www.bea.gov/bea/ARTICLES/2004/09September/0904_FDIUS.pdf

Detailed estimates of the direct investment position and international transactions by industry and by country are presented in this report by the US Bureau of Economic Analysis. These estimates show the composition of investment by foreign companies in the United States (9/04, PDF).12 Oct 2004

The abstract of a new study from Deloitte Research suggests that the globalization of U.S. manufacturing is at a crossroads. Developed markets continue to get an ever-larger share of investments, now standing at nearly 84% and up from 61% in 2000. While investments into developed markets of Western Europe, Canada, and Asia-Pacific have remained steady for the last 4 years, investments into emerging, low-cost locations in developing economies have dropped more than 80%. For example, US manufacturing FDI into China fell to US$500 million in 2002, down nearly 70% from US$1.6 billion in 2001 6/08/04 (04D3). (in gci.html)

A survey of North American electronics executives indicates that the percentage of North American electronics companies with global scope will more than double by 1998 to 34% of the total, vs. 13% in 1993. Those with solely domestic operations are projected to drop to 9% from 17% (Kyle Pope, Wall Street Journal (3/30/93)).

Foreign Direct Investment in the US (in billions of US$) (from a graph) (Commerce Department data) {w65}

New Foreign Direct Investment (FDI) into the US totaled $82 billion in 2003, over twice the amount for 2002 (Organization for International Investments, http://www.ofii.org visited (7/20/04)).

Foreign investment in the US totaled $47.244 billion in 1994, and $26.299 billion in 1993 (Pittsburgh Post Gazette (6/9/95)) (US Commerce Department data).

Of US-owned firms' total production abroad, it is estimated that 11% goes to the US market, and 25% of that (less than 3% of the total) comes from non-industrialized countries. Further, foreign direct investments appear to have a positive, rather than a negative, effect on exports from the parent-company country (95W1).

New FDI into the US totaled $82 billion in 2003, over twice the FDI into the US in 2002 (Organization for International Investments http://www.ofii.org/ (visited 7/20/04).

US Foreign Investment (in billions of US dollars) (from a chart) (data of UN Conference on Trade and Development) (Wall Street Journal (12/6/95)) {w50}

Foreign-direct Investment in the US in billions of $US (data of Edward Yardeni, C. J. Lawrence) (from a plot) {w60}

Part [B4] ~ LATIN AMERICA ~

In recent years, Latin American banking sectors have experienced an accelerated process of concentration and foreign penetration that has prompted diverse views regarding its implications for the competitive behavior of banks and for the financial stability of the system as a whole. Exploiting a rich bank-level balance sheet database for eight Latin American countries, the authors examine the evolution of concentration and foreign penetration indicators and their impact on competition and risk. The authors found that, while concentration did not reduce competition in the industry, foreign penetration appears to have led to less competitive banking sectors. Moreover, the authors find banking sector fragility to be positively related to competition and, through this channel, negatively related to foreign participation, despite the fact that foreign banks in the region are associated with higher insolvency risk due to higher leverage ratios and more volatile returns (03Y1).

Positive Signs of Economic Growth in Latin America and the Caribbean
http://www.eclac.org/prensa/noticias/comunicados/5/13865/BP_2003_pp.pdf
Presentation by the Economic Commission for Latin America and the Caribbean (ECLAC) Executive Secretary José Luis Machinea, based on the ECLAC report titled Preliminary Overview of the Economies of Latin America and the Caribbean 2003. The report indicates that FDI (inward) flows fell again, to US$29 billion in 2003, much lower than the 1990-2002 average of US$38 billion and down 25% from 2002. The importance of migrants' remittances (US$33 billion) representing a significant contribution to foreign resources in Mexico and Central America (in Spanish, December 2003, PDF, 270K).

Foreign direct investment in Latin America: $105 billion in 1999; $80 billion in 2001 (02F1).

US Direct Investment to Latin America (in billions of $US) (US Commerce Department data) (from a chart) {w55}

Total Private Capital Flows to Latin America (in billions of US dollars) (Wall Street Journal (1/6/95)) (From a chart) {w45}

In sub-Saharan Africa an average of 75% of FDI profits have been repatriated between 1991-97 (99I1) (IMF).
The catalyst for the East Asian financial crisis in 1996 was a huge outflow of funds, as commercial banks and institutional investors called in loans. The resulting losses were equivalent to more than 10% of GDP for some countries (based on data in IMF, 1999) (99I1). FDI remained constant throughout 1991-1997.

(There are 30 member nations in the Organization for Economic Cooperation and Development (OECD).)

Global capital flows returned to developing markets in 2004 and 2005. FDI flows began to expand again in 2004 after three consecutive years of decline. FDI flows to emerging markets increased by 40% in 2004 to US$233 billion, the second highest level on record. Asia remains the top destination for FDI flows to developing regions, with China itself accounting for almost 10% of all global inflows. FDI flows to Latin America and the Caribbean rebounded sharply in 2004 after four years of decline, led by Mexico and Brazil (05E1).

Canada has experienced one of the world's largest increases in FDI outflows in recent years, as well as significant growth in its 2005 FDI inflows. Canada is expected to remain a net exporter of FDI in 2005 and in 2006. In 2004, Canada's outflows more than doubled to 62 billion Canadian dollars and while a repeat is not expected, data through the third quarter of 2005 indicate that outflows are on track to reach an impressive CAD40 billion for the year. While the U.S. has remained the dominant destination for Canadian outflows, there has been increasing diversification to other markets in recent years. FDI inflows to Canada for 2005 stand at CAD26.1 billion though the third quarter, a substantial increase from the 8.2 billion Canadian dollars attracted in 2004. Global GDP growth reached its peak in 2004 at 5.1% (05E1).

• Foreign direct investment into OECD countries fell 20% in 2002, following already steep declines in 2001. Preliminary indications point to a further drop in 2003.
• A total of $490 billion in investment (FDI??) flowed into OECD countries in 2002, from $615 billion in 2001 and one-third the level recorded in 2000.
• The continued global economic slump, relatively weak stock markets, uncertainties over international security, and heavy debt loads in once-booming sectors like telecommunications all contributed to the decline.
• The drop was concentrated mainly in the US and UK.
• In the US, inward FDI fell to $30 billion in 2002, from $131 billion in 2001.
• In the UK, inward FDI fell to $25 billion in 2002, from $ 62 billion in 2001.
• FDI flows into other OECD countries, as a whole, remained flat in 2002.
• If the downward trend of mergers and acquisitions in the first five months of 2003 continues, OECD countries could be heading for a further drop in FDI in 2003 of 25-30%.
• Investment (FDI?) flowing out of the 30 OECD member countries hit $609 billion in 2002, from $690 in 2001.
• China was the world's largest recipient of FDI in 2002 with total inflows of US$53 billion (OECD, "Trends and Recent Developments in Foreign Direct Investment" (6/19/03)).

Go to Top of this Section (3-B) ~ Mobility - Private Capital Flows ~
Go to Table of Contents of this Chapter 3 ~ Mobility ~ Go to List of References ~ Go to Table of Contents of this document ~ Go to "Globalization: The Convergence Issue" ~ Go to Home Page of this entire website ~

China has more than 15,000 highway projects in the works, which will add about 100,000 miles of road (Li Yuan, Paul Glader, Wall Street Journal (9/27/04) p. R4.).

In China, container trucks zip along modern superhighways to high-tech ports where cargo is loaded onto ships 24 hours per day (02I1).

Ocean shippers are introducing the first 1000-ft. freighters. Mega-ships have reduced shipping rates between Asia and North America more than 15% since 1990. (Wall Street Journal (6/24/97)).

In 1996, 38% of fruits, and 12% of vegetables eaten in the US came from abroad, double the 1986 level. (Wall Street Journal (10/3/97)).

US Freight Transportation (rail, truck, sea) as a percent of GDP (Wall Street Journal (6/24/97)) (from a graph) {w60}

Go to Table of Contents of Chapter 3 ~ Mobility ~

SECTION (3-D) ~ TRADE DEFICITS, CURRENT ACCOUNT DEFICITS AND SURPLUSES ~ [Da]~US Data~, [Db]~Non-US Data~,

The US recently changed from importing more manufactured goods from advanced economies to importing more manufactured goods from the developing world.

Imports of manufactured goods from the developing world grew from 2.5% of the US GDP in 1990 to 6.0% in 2006 (07K2).

The original "newly industrialized economies" (South Korea, Taiwan, Hong Kong and Singapore) paid wages that were about 25% of US levels in 1990. Since then, the sources of US imports have shifted to Mexico, where wages were 11% of US wage levels and to China where wages were 3-4% of US wage levels (in 2006) (07K2).

Krugman notes that the highly educated US workers who clearly benefit from the growing trade with developing world economies are a minority, greatly outnumbered by those who probably lose. He proposes responding to this problem by doing things like strengthening the social safety net (07K2).

NOTE: Data on Current Account Deficits is given near the bottom of this section, immediately following data on trade deficits.

Some US Trade deficits in 2006:

With China - $232.5 billion: Japan - $88.4 billion: Mexico - 64.1 billion (US Commerce Department data (2/13/07))

As of June 2006 the US owed Japan $635.3 billion, China $327.7 billion, and England $201.4 billion. These and other countries now finance nearly 100% of the new debts, wars, tax cuts, social programs and infrastructure of the US (07H1).

Japan and China have each accumulated about $1 trillion dollars of currency reserves through their balance of trade surplus with the US (07H1).

Between 1997 and 2005, 111 of the 114 key U.S.-based industries lost domestic market share to foreign-produced goods. During 2004 and 2005, import penetration rose for 83 of these sectors and fell for 31. Between 1997 and 2005, 26 of the 114 industries (in the recent study by the US Business and Industry Council) saw their home market share shrink by 50% or more, including pharmaceuticals, computers, telecommunications hardware, navigation- and guidance equipment, broadcasting- and wireless communications equipment and motor-vehicle power train and transmission equipment (07T1). Eight more industrial sectors experienced market share losses of nearly 50% during this period, including tires, switchgear and switchboard apparatus, and commercial and service industry machinery. As a result, by 2005, imports represented at least 50% to 59% of sales in the US of 24 of the industries studied, including telecommunications hardware, heavy-duty trucks and chassis, and broadcast and wireless communications gear (07T1). In 8 more industries, imports have captured 60-69% of the US market, including autos, environmental controls and aircraft engines and engine parts. And in 6 sectors, imports control 70% or more of the American market, including machine tools (07T1). If current trends continue, imports will account for the majority of US domestic sales in sectors such as electric measuring and test equipment, X-ray equipment, turbines and turbine generator sets, laboratory instruments and construction machinery (07T1).

Between 1997 and 2005, output fell in nearly 2/3 of the 53 industries where import penetration is highest or grew fastest, and stagnated in many of the rest (07T1).

US National Debt: $9.4 trillion as of 5/15/08 ($31,000/ person) (08O1).

See http://www.treasurydirect.gov Scan to "GOVERNMENT" Click on "Monthly Statement on the Public Debt"

At the start of the Johnson term 6/30/63 federal debt was $317 billion.

At the end of the Johnson term 6/30/69 federal debt was $$354 billion.

Federal debt continued to rise during the 12 years of Nixon, Ford and Carter but fell as a % of GDP.

Ronald Reagan inherited a debt of less than $1 trillion, but nearly tripled it in 8 years.

By the time Bill Clinton took office in 1993 after 12 years of Republicans in the White House, America's debt had more than quadrupled and was no longer shrinking as a percent of GDP.

During Clinton's term in the White House, national debt increased from $4.1 trillion to nearly $5.7 trillion (08O1).

According to the article, Fed. Reserve Chairman Alan Greenspan has intimated that the US can't expand its borrowing forever. In the nightmare scenario, foreigners would pull their money out, causing the dollar to sink and stock markets to plunge. Americans would have to pay higher interest rates, and the US economy would lurch to a halt (Wall Street Journal (4/22/02)).

Warren Buffet, the legendary investor, said that the US is destined to become, not an "ownership society" but a "sharecropper society" (05G2). (in Section (3-B) of gci.html)

The net foreign indebtedness of the US is now more than 25% of the US GDP. At the current rate it will reach 50% in 4-5 years (05G2). (in Section (3-B) of gci.html). Comments: Net Foreign indebtedness also includes external borrowing to finance the Federal budget deficit.

US Auto Trade Deficit (Vehicles + parts) (in billions of $US) (US Census Bureau data) {w20}

The US imported $725.8 billion more in goods and services than it exported in 2005 (nearly $2 trillion in imports vs. $1.27 trillion in exports). The 2005 US trade deficit is up 17.5% over 2004, and is 5.8% of the 2005 GDP (06B1). (in gci.html Sect. (1-C), credited it to the US Commerce Department.)

The US trade deficit (a record $726 billion in 2005) and the federal budget deficit ($319 billion in 2005) are financed by foreign lenders, manly central banks in Asia and offshore hedge funds (06U2).

Congress helped to prop up the US dollar in 2005 by offering a one-time tax break that induced many American companies to convert their foreign earnings into hundreds of billions of US dollars. That tax break has now expired for most companies (06U2).

For the past few years the US economy has overcome the drag of big deficits, mainly because the housing boom let Americans borrow and spend, despite stagnant wages. But that boom appears to be moderating, a slowdown that will only worsen if American foreign indebtedness leads to sustained downward pressure on the dollar and upward pressure on interest rates (06U2).

China recently stated its intentions to invest more of the dollars it earns from its trade surplus with the U.S. in other currencies (06U2). (paragraph in Section (3-B) of gci.html and gcir.html as (06U2))

The US trade deficit in 10/2004 was $55.46 billion. For the year to date, the US accumulated trade gap was $500.46 billion (Greg Hitt and Michael Schroeder, "Trade Gap Swells on Oil Price Rise, Chinese Imports", Wall Street Journal (12/15/04) p. A2).

(EDITORIAL: "No Bang for Our Cheap Buck", New York Times (12/15/04))

The Bush administration's de facto weak-dollar policy - its preferred "cure" for the US trade deficit - is not working. Yesterday's trade deficit report shows that imports outpaced exports by a record $55.5 billion in October. The imbalance was worse than the gloomiest expectations.
So far, the Bush administration has been hoping that the weaker dollar will raise the price of imports, leading American consumers to buy less from abroad, and will at the same time make our exports cheaper so foreigners will buy more American goods. That's supposed to shrink the trade deficit and, with it, America's need to attract nearly $2 billion each day from abroad to balance its books.
The US dollar has been declining since February 2002. In December of 2004 it was down by 55% against the euro and 22% against the yen. But even then, US imports continue to rise faster than US exports. (in gci.html)
According to yesterday's report, imports were some 50% greater than exports in October. Much of October's import growth was caused by high oil prices, which have since subsided. But that's no reason to shrug off the disturbing evidence of the weak dollar's failure to fix the trade gap (EDITORIAL: "No Bang for Our Cheap Buck", New York Times (12/15/04)).

As the American economy heads for higher global imbalances, the need to borrow from abroad grows. And the more we borrow, the weaker the dollar becomes. That's because the markets that set the value of freely traded currencies, like the dollar and the euro, punish indebted nations by pushing down their currencies. The US, by any measure - trade, the federal budget, and personal consumption - is by far the world's biggest debtor. The need to borrow in the face of an already weak dollar portends higher prices and higher interest rates (EDITORIAL: "No Bang for Our Cheap Buck", New York Times (12/15/04)).

The US is even running a $4.2 billion (annual?) trade deficit in food products, mainly due to a surge in imported meat, and falling sales of US meat and soy beans (04K1).

US exports of goods and services in September of 2004 were $97.5 billion, compared with US imports of goods and services of $149 billion (04K1). This suggests a 2004 US trade deficit of $151.1 billion.

The US trade deficit is on pace to swell by nearly a third in 2004 and to top $630 billion (04K1).

In 2003, the $133 billion US oil import bill accounted for roughly 30% of the overall US trade deficit. This was about the same size as the US bilateral trade deficit with China. In 2004 the oil import bill is expected to reach $146 billion (04S2).

The $54 billion US trade deficit in August of 2004 imply a current accounts deficit (a wide measure of trade in goods and services plus certain financial transfers) has widened to about 6.3% of the US GDP from 5% around August of 2003 -- a level that economists found troubling (04S2). The US relies on foreigners to finance the current accounts deficit, so if they balk, it could mean a weaker dollar, higher interest rates or both (04S2).

US Consumption produced abroad, 1979-80 (Seymour Melman, "The High-Tech Dream won't come true", INC, (August 1984)) {w45}

US Trade Deficit ($billions) (from a chart) (Commerce Department data) {w70}

{w70}

{w25}

Comments: Does this deficit include both merchandise and services? YES (See below.)

The US showed a farm trade deficit for the second time on record in 2002. Normally the US shows a big surplus in farm trade (03U1).

Major US trade deficits in 2002: $103.1 with China, $70.1 with Japan (03U1).

US trade deficit in 2000: $378.6 billion (03U1).

US trade deficit in 2001: $358.3 billion ($427.2 billion in manufactured goods - Services surplus of $68.9 billion) (03U1).

US trade deficit in 2002: $435.2 billion ($484.4 billion in manufactured goods - Services surplus of $49.1 billion) (03U1).

US trade deficit In 2003 489.9 billion (an all-time high) (04A1) (to gci.html).

January 2004 US trade deficit was $43.1 billion (04A1).
US trade deficit in 2004 (June) $55 billion (a record), $54 billion in August 2004 (04S2).

The US Commerce Department reported that the US trade deficit for 1999 was the largest ever - $271.3 billion, $100 billion more than the record set in 1998. The largest single chunk, $73.9 billion, was in US trade with China (00K1).

US trade deficit is set to surpass $450 billion in 2000. US trade in services now tops $250 billion/year runs a surplus of $80 billion. Worldwide, cross-border sales of services are around $1.3 trillion (Wall Street Journal (12/04/00)).

US trade deficit with "industrializing" countries has increased rapidly, but it is still under 1% of the US GDP (95W1). Comments: The US total trade deficit is on the order of $400 billion/ year, and US GDP in 1997 was $7.8 trillion. 1% of that is $78 billion. So apparently over $322 billion/ year is the US trade deficit with developed nations. The total GDP of the entire developed world in 1997 was $24.8 trillion ("World Resources 2000-2001", p. 303).

Annual US Trade Deficit in Goods and Services (from a chart) (Wall Street Journal (3/2/99))
(US Commerce Department data) {w55}

US Current-Account deficit in the first quarter of 2005 was $195.1 billion, vs. $188.4 billion in the fourth quarter of 2004 (Commerce Department data). Analysts predicted that the 2005 deficit could reach $780, a 17% jump from 2004. All this is in spite of the dollar having fallen by about 15% since early 2002 (Jeff Bater, "Current-Account Gap Widens Despite Gradual Slide of Dollar", Wall Street Journal (6/20/05) p. A2).

The US current-account deficit ballooned to a record $665.9 billion in 2004 - 6.3% of the GDP (vs. 4.8% in 2003) (Michael M. Phillips, "U.S. Trade Deficit Hits a Record $665.9 billion", Wall Street Journal (3/17/05) p. A2.). (in gci.html)

In 2001 the US purchased $83 billion worth of Chinese goods than China purchased of US goods (02I1).
The estimated 2000 current-account deficit of the US is projected to hit $425 billion. Only problems with the yen and euro keep the dollar from being under pressure. The current-account deficit has quadrupled since the mid-1990s (Michael M. Phillips and Nicholas Kulish, Wall Street Journal (9/14/00)).

In the first three months of 2000 the current accounts deficit of the US (the broadest measure of the trade imbalance) surpassed 4% of its GDP for the first time. According to Merrill Lynch projections, that gap will measure $411 billion for all of 2000, 24% wider than 1999's deficit, and 4.2% of the overall economy (A trade deficit indicates that a country imports more than it exports, and borrows abroad to cover the difference.) A study by Catherine L. Mann (Inst. For Int'l Economics) examined Canada, Australia, Finland and 7 other economically advanced nations with big trade deficits during the past two decades. She found that, on average, the current-account gap hit its limit at 4.2% of GDP. Deutsche Bank Research warned that capital flows into the US could dry up, causing the US dollar to drop, interest rates to increase, and the stock market to dive. A sustained drop in the US stock market could precipitate such a downward spiral. The scenario seems similar to the events that occurred during the financial distress of the early 1990s (00P1).

For all of 2000, the US current account deficit hit a record of $444.7 billion, prompting concern among economists that, unless the imbalance began to shrink, the US could begin to have serious problems attracting the foreign capital needed to finance such a huge deficit (Pittsburgh Post Gazette (12/13/01)).

A "current account deficit" must, as a matter of accounting arithmetic, equal the difference between national savings and our domestic investment (95W1).

US Current Account Deficit, in billions of dollars (Datastream International data) (from a chart) {w40}

The Bush administration has views quite different from most economists. According to John Taylor, the Treasury Department's undersecretary for International Affairs, the current-account deficit "is reflective of good investment opportunities in the US, and the effects on financial markets are not a concern" (02P1). (The current account includes goods and services, income, charitable contributions and foreign aid. It is the broadest measure of international trade (02P1).)

US Current Accounts Deficit in billions of US $ and as a pct. of the GDP (from a chart) (US Commerce Department data) (Wall Street Journal (4/22/02)) {w45}

In mid-September, 2002, the US Commerce Department announced that, for the first time, the US current-account deficit surpassed 5% of domestic economic output. New IMF research suggests that if this deficit exceeds 4% of output, it puts the country in danger of triggering a sequence of exchange-rate and interest-rate problems (02P1).

US Current Account Deficit *# (from a plot) (Wall Street Journal (12/15/99)) (Commerce Department data) (in $billions/ quarter -- multiply by 4 to get the annual current account deficit) {w40}

Note: 1999 excludes Q4 data)
*# The current account measures not only trade in goods and services, but also investment flows and spending on foreign aid.

Go to top of This Part ~ (Da) ~ Trade Deficits, Current Account Deficits and Surpluses - US Data ~
Go to top of this Section ~ (D) ~ Trade Deficits, Current Account Deficits and Surpluses ~
Go to top of this Chapter ~ (3) ~ Mobility ~ Go to List of References ~ Go to Table of Contents of this document ~
Go to "Globalization: The Convergence Issue" ~ Go to Home Page of this entire website ~

Eurostat said the 15 euro nations posted a trade deficit of euro 0.1 billion ($0.15 billion) in June 2008, vs. May's trade deficit of euro3.9 billion ($5.74 billion). The euro-zone's energy import bill in the first five months of 2008 hit euro155 billion ($228 billion) - a 39% increase on January-May 2007. Overall, EU exports from January to May 2008 grew 8% from Aug. 2007 but this masks a 4% drop with its second-biggest foreign market, the US. Trade with Britain, the euro-zone's No. 1 trade partner, grew 2% during the same period as the British economy slowed. Euro countries trade with China was up 15%. Trade with Russia increased 22%. Imports from Russia rose 23%, as oil and natural gas prices surged ((Unknown) "EU: Trade deficit close to balance: AP" (08/18/08)). Comments: These trade deficits are negligible relative to those of the US, which are typically in the tens of billions of dollars per month.

Western Europe, whatever its problems, manages economic policy to maintain modest trade surpluses (05G2). (in Section (3-B) of gci.html)

One of the most important changes that affected the overall agricultural trade balance of developing countries was the rapid growth in their imports of temperate-zone commodities. Net imports in this product category increased by a factor of 13 over the last 40 years, rising from a minor deficit of US$1.7 billion in 1961/63 to US$24 billion in 1997/99 (Table 9.1in Section (3-A-a)). These figures are in current US$ (03S4).
One crucial issue in this context is whether and to what extent developing countries would be able to expand their production and exports if policy distortions, particularly those imposed by OECD countries, were to be removed. Would the removal of distortions change developing countries' net trade position? Numerous studies suggest that this is unlikely to be the case. Instead, there is wide agreement that the limiting effect of agro-ecological constraints often outweighs the effects of policy distortions. In fact, a removal of OECD subsidies would largely result in a shift in market shares from subsidized to unsubsidized producers within the group of OECD countries. Only a few developing countries with additional production capacity for temperate-zone commodities, such as Argentina, Brazil, Uruguay or Thailand would expand their net export positions (00F1) (FAO, 2000e, p. 27-28). The majority of developing countries, however, would not shift from net importers to net exporters. Where the responsiveness of agricultural supply is particularly low (as in many LDCs) and where nonagricultural protection remains high, countries will experience higher food-import bills and a deterioration of their terms of trade (03S4).

Tropical commodities are mainly produced in developing countries, but primarily consumed in OECD countries, e.g. coffee, cocoa or rubber for which developing countries have been increasing output substantially over the past decades. Developed countries' import markets for these commodities have become increasingly saturated.
Wages for coffee bean pickers fell along with prices for coffee to below US$1-2 per day in many African and Latin American countries. Oxfam has documented such impacts on wages and rural poverty in a number of case studies for the United Republic of Tanzania and Mexico (01O1) (Oxfam).

At the completion of the Uruguay Round of multilateral trade negotiations, the Agreement on Agriculture was hailed as an important first step towards the fundamental reform of the international trading system for agriculture. Since then, however, many countries have been disappointed by the modest benefits deriving from it. Indeed, some observers argue that the Agreement on Agriculture may have "institutionalized" the production- and trade-distorting (subsidy) policies of OECD countries without addressing fundamental concerns of developing countries (02G2) (Green and Priyadarshi, 2002).

The 49 LDCs (Less-Developed Countries) agricultural trade deficit has increased so rapidly that, by the end of the 1990s, agricultural imports were more than twice as high as exports (Figure 9.2 - in Section (3-A-a)) (03S4).

Mexico ran a trade surplus of $15 billion in 1999 and $10 billion during the first six months of 2000 (Joel Millman, Wall Street Journal (8/7/00)).

Mexico's purchase of US consumer goods accounts for 11% of Mexico's US imports. The other 89% comes from capital goods being imported into Mexico to create products for export (Owen Bieber, Letter to the Editor, Pittsburgh Post Gazette (10/03/93)).

In the period Oct. 1998 - Oct. 2003 China built more than 30 factories to produce custom wheels for cars, trucks and other vehicles. These factories produce more products that the entire North American market consumes. As a result, prices have fallen 20-50%, forcing many US producers to go out of business or become shell companies, outsourcing all of their production to Chinese factories (03A1). (in gci.html)

US Trade with China in billions of dollars (US Department of Commerce data) (from a chart) {w45}

China's Annual Percent Change in GDP and Trade Surplus ($billions) (Citibank data) (from charts) {w45}

Japan's Merchandise Trade Balance with the US on a Balance of Payments Basis ($billions) (US Commerce Dept. data) (copied from a Wall Street Journal plot of unknown date) {w70}

Annual US Total Trade Deficit, and the Trade Deficit with Asia ($billion) (Wall Street Journal (12/18/98)) (from a graph) {w75}

* Japan, China, Hong Kong, Korea, Singapore, Taiwan, Indonesia, Malaysia, Philippines, Thailand

Go to Top of this Section (3-D) ~ Trade Deficits, Current Account Deficits and Surpluses ~
Go to Table of Contents of this Chapter 3 ~ Mobility ~ Go to List of References ~ Go to Table of Contents of this document ~
Go to "Globalization: The Convergence Issue" ~ Go to Home Page of this entire website ~

In Australia, more than 30,000 so-called "457" business visas were issued in 2005 - up from about 19,500 in 2001-02. It is believed that up to 37,000 such visas may be approved in 2006. The "457" category of visa allows employers to sponsor skilled workers from abroad for a set time (John Masanauskas, "Aussie jobs go to the world," Herald Sun (2/20/06) p. 9.).

H-1B Visas by Fiscal Year (in thousands) (Editorial, Wall Street Journal (8/26/05) p. A12.) {w65}

{w60}

Source: Dept. of Homeland Security, National Foundation for American Policy, and American Council on International Personnel. Comments: No clear trend - hardly worth adding to gci.html

World Labor Force, 1995, with Projections to 2050 (Numbers in millions) (UN projections of population and dependency ratios and ILO projections of regional work activity rates for the year 2000.) (Lester R. Brown, Gary Gardner, Brian Halweil, "Beyond Malthus: Sixteen Dimensions of the Population Problem", Worldwatch Paper 143 (September 1998) p. 29.) {w35}

* Least-Developed Countries -- the world's 28 poorest nations, based on per-capita GNP.

El Paso Texas (pop: 700,000) has lost more than 10,000 manufacturing jobs since NAFTA took effect on Jan.1, 1994. Nearby, in Ciudad Juarez, Mexico, (pop: 1.3 million) the population is growing by 50,000 people per year. Workers its maquiladoras make, in a day, what their American counterparts make in an hour. The underground aquifer on which Ciudad Juarez depends is falling by 5 feet per year. The water in it is expected to be gone in 20 years. The city can adequately treat less than 35% of the sewage generated. Nearly a third of the population lives in homes that are not connected to sewage systems. Only about half the streets are paved. 12% of the people have no reliable access to clean water. (Greg Thompson, "Mexico border growth leaves workers poor in ecological disaster", New York Times (2/11/01)).

Maquiladoras in Major Municipal Areas of Mexico's Part of the Rio Grande Basin (02K3) {w70}