Wiener Institut für
Internationale
Wirtschaftsvergleiche
The Vienna Institute for
International Economic
Studies
www.wiiw.ac.at
EU‘s Trade with the BRICs and
Competitiveness Challenges
Peter Havlik and Roman Stöllinger
The Vienna Institute for International Economic Studies
(wiiw)
2
EU and BRICs‘ Trade: Global, Regional, Commodity and
Specialization Patterns
 EU is the biggest world exporter; in imports ranks second after USA
 EU plays more important role in BRICs‘ trade than vice versa (even
without intra-EU trade which accounts for 2/3 of total)
 EU has a large trade deficit with BRICs (EUR 245 bn in 2008)
 Russia is the most important export partner among BRICs, China
largest import partner among BRICs
 NMS‘ trading patterns with BRICs differ from the rest of EU
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Shares in World Goods Exports: Triad and BRICs
 EU is the biggest world exporter


Source: UN Comtrade
% of world goods exports

(17% of world goods exports)
BRICs (esp. China) are catching
up, overtaking Japan (in 2005)
and even the USA (in 2007)
EU succeeds in keeping its
leading position while USA and
Japan are falling behind
USA leads in world import
shares (18.5%), EU: 2nd, China:
3rd
20
1995
16
2000
2005
2007
12
8
4
0
EU
USA
Triad
Japan
Brazil
Russia
BRIC
India
China
Hong
Kong
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Shares of the Triad in Goods Imports of BRICs
• EU is BRICs‘ most important
trading partner (28% of BRICs‘
exports, 18% of imports)
2000 2007
45
Source: UN Comtrade
30
25
20
15
10
5
Brazil
Russia
India
China
Hong Kong
BRIC
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Japan
USA
EU 27
Japan
USA
EU 27
Japan
USA
EU 27
Japan
USA
EU 27
Japan
USA
EU 27
0
Japan
• EU plays more important role
in BRICs than vice versa (5.5%
of EU exports and 11% of
imports come from BRICs)
35
USA
• EU‘s role is high and rising in
Russia; in China, Japan still
plays the key role
40
EU 27
• Yet its importance is
declining, though less than that
of USA or Japan
7
EU imports from BRICs, shares in total (%)
EU15 2000
EU15 2007
NMS12 2000
NMS12 2007
25
20
15
10
5
0
Brasil China
Note: including intra-EU trade
Source: Eurostat Comext
India Russia BRICs Japan
USA
RoW
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Uneven importance of BRICs for EU states
(imports, year 2007)
BRICs‘ import
shares range from
4% (Irland, Malta)
to 20% (Finland,
Lithuania)
14
Russia: for Baltics
8
BU
FI
DE
PT
ES
UK
12
10
6
China: for HU, DE,
IT, NL, UK
4
EU average: 11%
0
Note: including intra-EU trade
Source: Eurostat Comext
2
Brasil
Russia
India
China
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EU exports to BRICs, shares in total (%)
EU15 2000
EU15 2007
NMS12 2000
NMS12 2007
25
20
15
10
5
0
Brasil China
Note: including intra-EU trade
Source: Eurostat Comext
India Russia BRICs Japan
USA
RoW
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Uneven importance of BRICs for EU states
(exports, year 2007)
BRICs‘ export
shares range from
2-3% (Portugal,
Greece) to 15%
(Finland, Latvia)
PT
FI
LV
IT
12
10
8
6
EU average: 5.5%
0
Source: Eurostat Comext
CZ
14
NMS export shares
to BRICs are lower
than in EU15
Note: including intra-EU trade
BE
4
2
Brasil
Russia
India
China
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Structure of EU imports from BRICs, 2007, in %
Brasil
China
India
100
90
80
70
60
50
40
30
Russia
World
Manufacturing
Mining
But EU exports to
BRICs are mostly
manufacturing (90%)
(except mining from
EU15 to India)
Agriculture
20
10
0
X
O
K
E
D
Source: Eurostat Comext
C
B
A
Note: including intra-EU trade
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EU27: Imports by industry groups (Taxonomy I)
100%
1. Mainstream
3. Capital intensive industries
5. Technology driven industries
2. Labour intensive industries
4. Marketing driven industries
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2000 2007 2000 2007 2000 2007 2000 2007 2000 2007 2000 2007 2000 2007 2000 2007 2000 2007
Brazil Russia
Source: Eurostat Comext
India
China
Japan
USA
RoW
EU27
World
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Revealed Comparative Advantages of the BRICs
2000
2007
400
300
200
100
Russia
0
-100
-200
-300
-400
EU27
USA
JPN
Mainstream
EU27
USA
JPN
Labour intensive
industries
EU27
USA
JPN
Capital intensive
industries
EU27
USA
JPN
Marketing driven
industries
2000
EU27
USA
JPN
Technol. driven
industries
2007
400
300
200
100
Brazil
0
-100
-200
-300
-400
EU27
Source: UN Comtrade.
USA
JPN
EU27
USA
JPN
EU27
USA
JPN
EU27
USA
JPN
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EU27
USA
JPN
17
Revealed Comparative Advantages of the BRICs
2000
2007
200
150
100
China
50
0
-50
-100
-150
-200
EU27
USA
JPN
Mainstream
EU27
USA
JPN
Labour intensive
industries
EU27
USA
JPN
Capital intensive
industries
EU27
USA
JPN
Marketing driven
industries
EU27
USA
JPN
Technol. driven
industries
2000
2007
200
150
100
India
50
0
-50
-100
-150
-200
EU27
Source: UN Comtrade.
USA
JPN
EU27
USA
JPN
EU27
USA
JPN
EU27
USA
JPN
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EU27
USA
JPN
19
EU27: RCAs by industry groups (Taxonomy II)
350
300
250
200
150
100
50
0
-50
-100
-150
-200
1. Low skill industries
2. Medium skill/blue collar workers
3. Medium skill/white collar workers
4. High skill industries
Brazil
2000
2007
Source: Eurostat Comext.
Russia
2000
2007
India
2000
2007
China
2000
2007
Japan
2000
2007
USA
2000
2007
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EU and BRICs‘ Trade: Tentative Conclusions
 BRICs‘ trading patterns differ from each other
 Impressive technological upgrading in Chinese exports
 China is emerging as a serious challenge for EU competitiveness !
 Global crisis led to a sharp drop in world trade in early 2009
 Signs of recovery already visible
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