PART 1

1. Total trade

Global trade is the exchange of capital, goods, and services across international borders or
territories. It is the exchange of goods and services among nations of the world. In most
countries, such trade represents a significant share of gross domestic product (GDP)

2016 is the fifth consecutive year of sluggish trade growth and the year with the weakest
trade performance since the aftermath of the 2008 global financial crisis (figure ES1a).
Current estimates of growth in the volumes of trade in goods and services range from 1.9
percent to 2.5 percent, but preliminary high-frequency data suggest that merchandise trade
volumes may have grown by only about 1 percent. The year 2016 is different from the other
post crisis years, in that trade sluggishness is a characteristic of both advanced and
emerging economies.

Since 2008, trade values of services and trade values of goods have followed
different trajectories, with growth in services trade more resilient during the global
financial crisis and the global trade slowdown of recent years (figure ES1b).

FIgurE ES1: Trade growth in 2016 (goods and services) is the lowest since the crisis

b. Services trade values and goods trade values

12.4
180
12.4
11.3
9.3
7.8 8.0 160
7.0
5.7
3.8
3.8
2.9 2.8 3.5 2.7 140
1.9
0.3

120

100

10.5

Goods Services

Source: International Monetary Fund World Economic Outlook, CPB Netherlands Bureau of Economic Policy
Analysis, World Trade Organization services database, and authors calculations.
Notes: (a) Trade refers to exports and imports of goods and services. (b) 2016 estimates of goods and services
trade values are obtained by applying year-over-year growth rates to 2015 levels (11 months used for goods
and 3 quarters for services).

*
1
 Trade developments in 2016 continued to reflect enduring structural determinants,
such as the maturing of global value chains (GVCs) and the slower pace of trade
liberalization, and cyclical factors, notably slow global growth, the trough in
commodity prices, and macroeconomic rebalancing in China (figure ES2).

FIgurE ES2: Measures of world vertical specialization, 19952014

120

108

96

84

72

60
1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014
Foreign value added (% of exports), WIOD 2013 (1995 Foreign value added (% of exports), WIOD 2016
2011) (20002014)
Import content, % of manufacturing exports (WITS, WIOD)

2. Major exporting countries

This is a ranking of the top export countries worldwide in 2016. China ranked first in
exports with an export value of about 2.1 trillion US dollars. The leading import
country in 2016 were the United States with an import value of about 2.25 trillion
U.S. dollars

China leads the world in exports in 2016. China was followed by the United States,
with exports valued at 1.45 trillion US dollars, and Germany, with exports valued at
1.34 trillion US dollars.

The value of goods exported from China grew immensely between 2002 and 2014.
In 2002, Chinas exports were valued at about 327 billion US dollars. Chinas export
value grew to 2 trillion US dollars in 2012, the first year in which China exported
2
more than 2 trillion US dollars worth of goods. Year over year export
growth remained above 17 percent between 2002 and 2012, except in 2009 and
2012. In 2004, export value grew by over 35 percent. In 2011, China accounted for
about 10 percent of global merchandise exports and about 4 percent of global
service exports. Chinas greatest export product category in 2011 was machinery
and transport equipment, of which they exported 902 billion US dollars worth. In
2012, China exported 159 billion US dollars worth of clothes and clothing
accessories.

United States exports, meanwhile, were valued at 1.6 trillion US dollars. Tranport
equipment exports in 2012 were valued at 248 billion US dollars. Computer and
electronic products accounted for 204 billion US dollars in exports. In 2012, the
greatest growth in export value occurred in livestock and livestock products, where
exports grew by 21 percent. Texas and California were the top two US states
ranked by value of exports in 2012. Texas ranked first with exports valued at 265
billion US dollars.
 3. Major importing countries
The statistic shows a ranking of the top import countries worldwide in 2016. In 2016,
the U.S. were the leading import country in the world with an import value of about
2.3 trillion US dollars.

Import and export are generally important pillars of a countrys economy. The trade
balance of a country shows the relationship between the values of a countrys
imports and exports. If the balance is positive, i.e. if the value of exports is higher
than that of imports, it is called a trade surplus. If it is negative and import values
exceed export values, it represents a trade deficit.

Worldwide trade is regulated by the World Trade Organization (WTO). It provides a

The worldwide export volume in trade since 1950 has tripled, and a similar
development can be observed in the worldwide import trade volume since 1950.
Europe is leading the ranking regarding the value of worldwide export volume of
trade by region, but the value of goods exported by Asia is almost up to par. Both
continents are also the top destination regions of inter-regional trade worldwide.

The United States, China and Germany are the leading import countries worldwide,
and also the leading export countries worldwide, albeit in a different order. The top
traded goods and commodities are oil and fuel, electronic equipment and
machinery. The volume of commodities traded worldwide has increased
dramatically over the past few years.
PART 2: CHARACTERISTICS OF TRADE
Trading globally gives consumers and countries the opportunity to be exposed to a
new market and products. Almost every kind of product can be found on the
international market: food, clothes, spare parts, oil, jewellery, wine, stocks,
currencies and water. Services are also traded: tourism, banking, consulting and
transportation. A product that is sold to the global market is an export, and a product
that is bought from the global market is an import. Imports and exports are
accounted for in a country's current account in the balance of payments.
Industrialization, advanced technology, including transportation, globalization,
multinational corporations, and outsourcing are all having a major impact on the
international trade system. Increasing international trade is crucial to the
continuance of globalization. Without international trade, nations would be limited to
the goods and services produced within their own borders. International trade is, in
principle, not different from domestic trade as the motivation and the behavior of
parties involved in a trade do not change fundamentally regardless of whether trade
is across a border or not. The main difference is that international trade is typically
more costly than domestic trade. The reason is that a border typically imposes
additional costs such as tariffs, time costs due to border delays and costs
associated with country differences such as language, the legal system or culture.
Another difference between domestic and international trade is that factors of
production such as capital and labor are typically more mobile within a country than
across countries. Thus international trade is mostly restricted to trade in goods and
services, and only to a lesser extent to trade in capital, labor or other factors of
production. Trade in goods and services can serve as a substitute for trade in
factors of production. Instead of importing a factor of production, a country can
import goods that make intensive use of that factor of production and thus embody
it. An example is the import of labor-intensive goods by the United States from
China. Instead of importing Chinese labor, the United States imports goods that
were produced with Chinese labor. One report in 2010 suggested that international
trade was increased when a country hosted a network of immigrants, but the trade
effect was weakened when the immigrants became assimilated into their new
country
International trade is also a branch of economics, which, together with international
finance, forms the larger branch called international economics