6.3 OECD trade with low- and middle-income economies See Table 6.3 here

Commentary
About the data
Definitions
Data sources

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In recent years many developing countries have attempted to increase the share of processed and manufactured goods in their exports and decrease the share of primary products. They have pursued this strategy for several reasons:

The deterioration in the terms of trade for many primary commodities. The substitution of synthetics for some primary products (for example, plastics for metals, artificial fibers for natural, and chemical sweeteners for sugar), which has dampened prospects for commodity exports. The instability of primary product prices in international markets and thus of export revenues, which makes development planning difficult. The observed long-term tendency for the share of primary commodities in world trade to diminish. The increased employment opportunities associated with producing and exporting processed goods and manufactures. The potential for realizing economy wide linkages and learning effects through more local processing.

Are developing countries achieving their goal of export diversification? A look at the import patterns of high-income OECD countries, which have been both the best markets for the exports of developing countries and the main source of their imports, suggests that the answer is yes. Food and primary commodities have fallen as a share of OECD imports, while the share of manufactures has grown substantially (figure 6.3a). Developing countries have become competitive suppliers for a wide range of manufactured goods, though they continue to lag in some highly capital-intensive products (such as chemicals).

Developing countries also have concerns relating to the level and structure of their imports. A key part of industrialization is expanding the available stock of capital goods—goods in which OECD countries have a comparative advantage. Thus the level and share of manufactures (particularly such capital goods as machinery and transport equipment) in OECD exports to developing countries indicate these countries’ progress in expanding their industrial base. The level and structure of imports may also bear on other policy concerns. For example, many developing countries place a high priority on improving food self-sufficiency or food security. Trends in the level and share of food imports may show whether these objectives are being achieved.

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The table was compiled from detailed trade flows data in the United Nations Statistical Office’s Commodity Trade (COMTRADE) database. For more information on commodity trade data, see the notes to tables 4.7–4.9 and table 6.2.

The product groups in the table are defined in accordance with the Standard International Trade Classification (SITC revision 1): food (0, 1,22,4), cereals (04), agricultural raw materials (2 excluding 22, 27, and 28), ores and nonferrous metals (27, 28, and 68), fuels (3), crude petroleum (331), petroleum products (332), manufactured goods (5–8 excluding 68), chemical products (5), machinery and transport equipment (7), other manufactured goods (6 and 8 excluding 68), and miscellaneous goods (9).

• Exports are all merchandise exports by high-income OECD countries to low- and middle-income economies as recorded in the United Nations COMTRADE database.

• Imports are all merchandise imports by high-income OECD countries from low- and middle-income economies as recorded in the United Nations COMTRADE database.

• High-income OECD countries in 1995 were Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Iceland, Ireland, Italy, Japan, Luxembourg, the Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, Switzerland, the United Kingdom, and the United States.

• European Union comprises Austria, Belgium, Denmark, Finland, France, Germany, Greece, Italy, Ireland, Luxembourg, the Netherlands, Portugal, Spain, Sweden, and the United Kingdom.

COMTRADE statistics are available in machine-readable form from the United Nations Statistical Office. Although not as comprehensive as the underlying COMTRADE records, detailed statistics on international trade are published annually in the United Nations Conference on Trade and Development’s Handbook of International Trade and Development Statistics and the United Nations International Trade Statistics Yearbook.

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