International trade Essay Example | Topics and Well Written Essays - 2500 words - 1

International trade - Essay Example China is fast approaching the value of the United States in terms of exports and is an important destination for imports. India and the Asean countries have also shown export growth in these years. India’s export growth is fast growing that is already similar to China. In the same way, Asean countries take action to China’s competition as its merchandise exports particularly in manufacturing grew by 18% in 2006. Likewise, European’s growth is inspired by the rising business and consumer confidence. European Union is the second world biggest exporter and importer of goods and services. Second, the strong economy is boosted by demand for commodities needed for industrial manufacturing and infrastructure development, such as metals and oils and is highest in 2007 that displayed the highest price movement (Chart 4) Chart 4: Export prices of selected primary products, 2005-2007 Annual % change a Comprising coffee, cocoa beans and tea. Source: IMF, International Financ ial Statistics. Source: World Trade Organization, 2008 Third, the strong regional developments have been accompanied by strong growths in merchandise trade as Table 1 would show. The strong economy of the emerging countries is accompanied by strong exports and imports. Fourth, export growth receives continued support from the world economy. As table 1 below shows, the combined merchandise exports of major economies integrate into the strong export growth of the world of 6.5% in 2005, 8.5% in 2006 followed by a decline of 5.5% in 2007. In 2007, effect of recession is starting to appear as trading slows down in most of the countries, with exception of the emerging economies that displayed its strength beyond crisis. We have seen China, Asia and India emerged as strong exporters. Table 1: GDP and merchandise trade by region, 2005-07 Annual % change at constant prices    GDP Exports Imports    2005 2006 2007 2005 2006 2007 2005 2006 2007 World 3.3 3.7 3.4 6.5 8.5 5.5 6.5 8.0 5.5 Nor th America 3.1 3.0 2.3 6.0 8.5 5.5 6.5 6.0 2.5 United States 3.1 2.9 2.2 7.0 10.5 7.0 5.5 5.5 1.0 South and Central America a 5.6 6.0 6.3 8.0 4.0 5.0 14.0 15.0 20.0 Europe 1.9 2.9 2.8 4.0 7.5 3.5 4.5 7.5 3.5 European Union (27) 1.8 3.0 2.7 4.5 7.5 3.0 4.0 7.0 3.0 Commonwealth of Independent States (CIS) 6.7 7.5 8.4 3.5 6.0 6.0 18.0 21.5 18.0 Africa and Middle East 5.6 5.5 5.5 4.5 1.5 0.5 14.5 6.5 12.5 Asia 4.2 4.7 4.7 11.0 13.0 11.5 8.0 8.5 8.5 China 10.4 11.1 11.4 25.0 22.0 19.5 11.5 16.5 13.5 Japan b 1.9 2.4 2.1 5.0 10.0 9.0 2.5 2.5 1.0 India 9.0 9.7 9.1 21.5 11.0 10.5 28.5 9.5 13.0 Newly industrialized economies (4) c 4.9 5.5 5.6 8.0 12.5 8.5 5.0 8.5 7.0 a Includes the Caribbean. b Trade volume data are derived from customs values deflated by standard unit values and an adjusted price index for electronic goods. c Hong Kong, China; Republic of Korea; Singapore and Chinese Taipei. Source: WTO Secretariat. 1.2 Distinction between tariff and quota and why tariffs are preferable to q uotas (i.e. quantitative restrictions) as a method of controlling imports Tariff and