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International Trade

Both supporters and opponents of globalization grant an important role to international trade. Supporters say greater openness to international trade will bring economic growth and may reduce poverty. Opponents of globalization say international trade leads to greater inequality and increased power for transnational corporations. Both are, at least sometimes, right.

The maps on this page show changes in the ratio of international trade (exports plus imports) to the output (GDP) of an economy. This provides one measure of each country's integration with the world economy.

What the maps do and do not show

The maps show changes in the ratio of international trade to output over the period 1960 to 1999. International trade has increased as a proportion of output in many economies, but these maps do not show a widespread shift toward globalization by trade integration.

The maps show the increased significance of trade in Asia, particularly in the two largest countries, China between 1980 and 1990 and India between 1990 and 1999. The growing trade integration of eastern European economies between 1990 and 1999 can also be seen. Several economies in South East Asia, including Malaysia, South Korea and the Philippines, have increased their integration. Some countries in central and Latin America, including Mexico and Chile, have greater proportions of international trade. In West Asia, only Turkey has greatly increased its international trade. There has not been a widespread shift in Africa, Latin America or West Asia.

Some large industrial economies, notably the USA and Japan, have low ratios of trade to GDP. In those cases, the economy may be relatively open to trade and investment, but the ratio of international trade to GDP is low because domestic production is large.

The growing industrialization of trade over the last quarter of a century (Sutcliffe 2001, 72) is not shown here. Many countries (including Ireland, Thailand, Brazil, Malaysia, and Mexico) that exported mostly primary (non-processed) products in 1975 are now exporting mostly manufactured goods, the products of industry. Some countries, including most of Africa and some of Latin America, have not been able to produce industrial exports, and have been left out of the most rapidly growing markets. 

The data

Trade in goods as a share of Gross Domestic Product is the sum of merchandise exports and imports measured in current U.S. dollars divided by the value of GDP. GDP is converted to international dollars using purchasing power parity rates (see glossary for explanations of GDP and purchasing power parity). These data come from the World Bank (2001).

Debates about trade and development

Debates about trade and development cover a range of questions. Here are links and references to discussions of some of those questions:

Does globalization reduce poverty?

Will the rich North globalize?

Does trade globalization increase economic growth?