Trade declines - observer new design

Trade declines

By sector-
International trade has declined steeply during the crisis, though how has the fall been reflected in different sectors and countries? Take the US, Germany and Japan, the three largest OECD traders-OECD countries account for roughly 60% of world trade. As shown in the top graph for total trade (which is the sum of imports and exports, rather than the difference, which is the trade balance as shown on page 5), machinery and transport equipment have broadly speaking been the main culprits, falling by over 11% in the US, 14% in Germany and 15% in Japan, comparing the second quarter 2009 with a year earlier. Lower energy prices have also contributed to fewer imports. Trade in fuel and lubricants fell by nearly 10% in the US and Japan, though exports by just over 3% in Germany. A closer look shows that fuel and lubricant imports in the US and Japan plummeted, by 13.6% and 18.1% respectively. Trade in manufactures and chemicals were not affected quite as badly, though it fell particularly steeply in Germany, by 6% and 3.6% respectively, year-on-year.

-and by geography
North America accounts for between a quarter and a third of US goods trade, and predictably, US exports and imports have fallen most in these markets-by about 10% over the period from the second quarter in 2008 to the same period in 2009. However, German trade with its neighbours in Europe accounts for about 70% of its total trade, and so imports slumped by some 23% and exports by 28% to those markets. Asian markets account for about half of Japan's trade, but imports and exports with these partners fell by 11% and 14% respectively. A look at the rest of the world reveals different levels of trade exposure too. US trade with Asia and Europe fell by 6-8%. Japanese imports from the rest of the world fell by 17%. Moreover, Japan suffered fairly sharp declines in trade with North America (down 4% for imports and nearly 8% for exports), whereas Germany saw a decline of just 3% in exports to the US, and less than 2% in imports. As for the US, its imports from Asia fell by 8% and exports by 6%, while its imports from other countries around the world fell by nearly 10%.

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