Selected trade developments Market shares

World market shares--the most basic trade performance indicators—broadly indicate that while the OECD area lost shares in the world market for goods (from 85% of world exports in 1990 to approximately 60% in 2008) the same has not been the case for what one can measure as trade of services;¹⁰ OECD’s share remained constant at approximately 62% of the world exports. The SEM economies grouping has more than doubled its share in the world goods exports from 13% in 1990 to approximately 35% in 2008, and in services from approximately 15% in 1990 to 26% in 2008. These broad figures and their dissection that follows below suggest a number of developments. First, they confirm the status of the emerging market grouping, in both merchandise trade and services. Second, they suggest that the OECD countries’ shares have been gradually reduced in the area of merchandise trade, while in services this has not been so much the case, even though the potential of the EM in this area is clearly visible.

Figures 2.10 and 2.11 present goods and services’ market developments in the period 1990-2007 for individual OECD and SEM economies. They reveal the following tendency: the eight largest OECD goods exporters (Germany, United States, Japan, France, Italy, Netherlands, United Kingdom and Canada) have been losing goods market shares in the period 1990-2007, while a number of medium size and smaller OECD exporters have been gaining market shares (Korea, Mexico, Spain, Poland, Czech Republic, Ireland, Turkey, Hungary and Slovak Republic). Noticeably, some of these dynamic OECD exporters belong to the group of less well off OECD members that share many characteristics which held them back economically in the past (such as central planning or inward looking policies) with the SEM grouping.

Most economies in the SEM grouping have gained goods market share since 1990. China’s performance has been exceptional as it increased its goods market share five-fold since 1990; it accounted in 2007 for close to 9% of the world goods market. This compares to the remaining larger SEM exporters that typically do not account for more than 2.5% of the world market. The individual shares of the vast majority of SEM economies are smaller than 1% but some of these economies such as Kazakhstan, Estonia, Chile and India have been increasing their shares at distinguishably high rates.

The distribution of world services market shares appears more concentrated in 2007 than that of goods markets (Figure 2.11). The US share of 14.4% is double that of the second largest service exporter, the United Kingdom (8.2%). Yet, the dynamic picture is more diversified as compared to goods; some large OECD exporters have been gaining market shares (e.g. United Kingdom, Spain) as have been a number of smaller ones (e.g. Ireland, Luxembourg, Korea, Greece, Poland, Hungary). Ireland has increased its share by more than five-fold over the period 1990-2007 while Luxembourg and Poland more than doubled their shares. This suggests that gains in services market shares have been distributed more evenly across the OECD membership.

Figure 2.11 reveals also that competition in services markets from SEM economies has been increasing as vigorously as in the goods markets. Indeed, the four largest SEM services exporters (China, India, Hong Kong, China and Singapore) now together have more than 10% of the world market share and the Chinese and Indian shares approximately quadrupled in the considered period. In fact, China’s share in the world services exports has been growing faster, and is now higher, than that of India. Several smaller SEM exporters have also increased their market shares.

Normalised trade balances (Figure 2.12) are considered as a fundamental indicator of sectoral competitiveness.¹¹ For the goods trade the normalised balances have polarised across OECD members in the period 1990-2007; countries with initially positive balances tended to improve their positions over the analysed period (e.g. Norway, Ireland, Germany) while in countries with initial negative balances (e.g. United States, United Kingdom) tended to deteriorate. In 2007, 15 OECD members had negative goods balances while only seven had negative services balances. A slight tendency for convergence of services balances (reduction of large positive and negative balances) over time could also be observed. Interestingly, countries with the largest positive balances in goods tended to have the largest negative balances in services suggesting a certain pattern of goods/services specialisation even within the OECD membership.

Figure 2.10. Shares in world goods exports, 1990-2007 Panel A. OECD countries

Source: Balance of Payment Statistics (IMF BOP) and World Development Indicators (WDI).

Figure 2.11. Shares in world services exports Panel A. OECD countries

Source: Balance of Payment Statistics (IMF BOP) and World Development Indicators (WDI).

Figure 2.12. Normalised trade balances Panel A. Goods