Global Trade in Commercial Knowledge- and Technology-Intensive Goods and Services

Exported goods and services to other countries are an indicator of a country’s economic success in the global market because exports capture the country’s products that compete in the world market. In addition, exports bring in income from external sources and do not consume the income of a nation’s own residents. However, the use of exports as an indicator of a country’s success in global markets has limitations. Exports of goods and services produced in global value chains, including those that have advanced technologies or are knowledge intensive, contain inputs and components supplied by other countries. For example, the value of China’s exports of high-technology goods is significantly lower when the foreign content of its exports is excluded (see sidebar Measurement of Trade in Value-Added Terms).

Global trade in commercial KTI goods and services consists of 14 categories. Three categories are knowledge-intensive services—telecommunications, computer, and information; finance; and other business. Eleven are technology-intensive products that consist of six high-technology goods—aerospace; communications; computers; pharmaceuticals; semiconductors; and testing, measuring, and control instruments—and five medium-high-technology goods.

Global exports of commercial KTI goods and services account for 46% of all goods and services exports (Figure 6-21). Global commercial KTI exports were an estimated $7.5 trillion in 2016, consisting of $1.6 trillion of commercial knowledge-intensive services, $2.6 trillion of high-technology products, and $3.4 trillion of medium-high-technology products (Appendix Table 6-25, Appendix Table 6-26, and Appendix Table 6-27).

Global exports of commercial KTI products and services: 2008–16

HT = high technology; KI = knowledge intensive; KTI = knowledge and technology intensive; MHT = medium-high technology.

Note(s)

Exports of commercial KTI products and services consist of exports of commerical KI services and high technology and medium-high technology manufacturing products. World exports of high technology and medium-high technology exports do not include intra-EU-European Union (EU), intra-North American Free Trade Agreement (NAFTA), and exports betweeen China and Hong Kong. Exports of the EU do not include intra-EU exports. Exports of NAFTA do not include intra-NAFTA exports. Exports of China do not include exports between mainland China and Hong Kong. World exports of commercial KI services consist of other business services; telecommunications and computer and information services; and financial services. Financial services include finance and insurance. World exports and total EU exports of commercial KI services do not include intra-EU trade.

Source(s)

IHS Global Insight, special tabulations of the World Trade Service database (2017) and World Trade Organization, Trade and tariff data. https://www.wto.org/english/res_e/statis_e/statis_e.htm, accessed 15 September 2017. See Appendix Table 6-25, Appendix Table 6-30, and Appendix Table 6-31.

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Trade in Commercial Knowledge-Intensive Services

Global exports of commercial knowledge-intensive services make up 43% of all exports of commercial services. Among the commercial knowledge-intensive services, the largest is other business services, which include R&D services, and architectural, engineering, and other technical services ($822 billion) (Appendix Table 6-28). The other two services are finance (which includes insurance and pension) ($399 billion) and telecommunications, computer, and information services ($347 billion) (Appendix Table 6-29 and Appendix Table 6-30).

The EU was the largest exporter of commercial knowledge-intensive services, with a global share of 33% in 2016 (Figure 6-22; Appendix Table 6-25). The United States was the second largest at 18%. Both had substantial surpluses in trade of commercial knowledge-intensive services (Figure 6-23). India is the third largest with a 7% global export share, closely followed by China. Both China and India had surpluses in trade of commercial KI services.

Commercial KI service exports, by selected region, country, or economy: 2008–16

EU = European Union; KI = knowledge intensive.

Note(s)

Commercial KI service exports consist of communications, business services, financial services, telecommunications, and computer and information services. Financial services include finance, pension, and insurance services. EU exports do not include intra-EU exports.

Source(s)

World Trade Organization, International trade and tariff data, https://www.wto.org/english/res_e/statis_e/statis_e.htm, accessed 15 September 2017.

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Trade balance of commercial KI services, by selected region, country, or economy: 2008–16

EU = European Union; KI = knowledge intensive.

Note(s)

Commercial KI service exports consist of communications, business services, financial services, telecommunications, and computer and information services. Financial services include finance, pension, and insurance services. EU exports do not include intra-EU exports.

Source(s)

World Trade Organization, International trade and tariff data, https://www.wto.org/english/res_e/statis_e/statis_e.htm, accessed 15 September 2017.

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EU Trade in Commercial Knowledge-Intensive Services.

The EU’s exports of commercial knowledge-intensive services grew 20% between 2011 and 2016 to reach $520 billion (Figure 6-22; Appendix Table 6-25). Output in the EU’s commercial KI industries declined during this period, in sharp contrast to the rise in exports. The euro’s substantial depreciation against the dollar, which made EU exports more competitive in global markets, may have contributed to the growth of commercial knowledge-intensive exports (see sidebar Currency Exchange Rates of Major Economies) (Figure 6-6; Appendix Table 6-4). Exports of other business services and telecommunications, computer, and information services drove overall growth, increasing 26% and 29%, respectively, during this period (Appendix Table 6-28 and Appendix Table 6-29). The EU’s trade surplus in commercial knowledge-intensive services was $138 billion in 2016, unchanged from its level in 2011 (Figure 6-23 and Figure 6-24; Appendix Table 6-25).

U.S. and EU commercial KI services trade, by category: 2016

EU = European Union; KI = knowledge intensive.

Note(s)

Commercial KI services trade consists of communications, other business services, financial services, and computer and information services. Financial services include finance and insurance. EU trade does not include intra-EU trade.

Source(s)

World Trade Organization, International trade and tariff data, https://www.wto.org/english/res_e/statis_e/statis_e.htm, accessed 15 January 2017.

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U.S. Trade in Commercial Knowledge-Intensive Services.

U.S. exports of commercial knowledge-intensive services grew 26% from 2011 to 2016 to reach $288 billion (Figure 6-22; Appendix Table 6-25). The growth of U.S. exports was spurred by growth in other business services (28%) and telecommunications, computer, and information services (28%) (Appendix Table 6-28 and Appendix Table 6-29). The U.S. trade surplus widened from $45 billion to $81 billion, reflecting growing surpluses in other business and financial services (Figure 6-23 and Figure 6-24).

China’s and India’s Trade in Commercial Knowledge-Intensive Services

China’s and India’s exports each grew 22% between 2011 and 2016, slightly faster than the EU (Figure 6-22; Appendix Table 6-25). India’s growth was led by other business services (38%), coinciding with the Indian firms that provide accounting and other services to firms in developed countries (Appendix Table 6-28). Indian firms also have been very successful in providing IT services to firms in developing countries; India is the world’s second largest exporter of telecommunications, computer, and information services (16% global share) (Appendix Table 6-29). India’s trade surplus grew from $52 billion to $68 billion from 2011 to 2016 due to the widening of its surplus in other business services and telecommunications, computer, and information services (Figure 6-23 and Figure 6-25).

China's and India's trade in commercial KI services, by category: 2016

KI = knowledge intensive.

Note(s)

Commercial KI services trade consists of communications, other business services, financial services, and computer and information services. Financial services include finance and insurance.

Source(s)

World Trade Organization, International trade and tariff data, https://www.wto.org/english/res_e/statis_e/statis_e.htm, accessed 15 January 2017.

Science and Engineering Indicators 2018

China’s growth in commercial KI exports was led by a near doubling of its exports of telecommunications, computer, and information services between 2011 and 2016 (Figure 6-22; Appendix Table 6-25 and Appendix Table 6-29). China’s global share in telecommunications, computer, and information services edged up from 5% to 7% during this period, coinciding with rapid growth of Chinese firms providing IT services to developed countries, making it the world’s fourth largest exporter after India.

Trade in High-Technology Products

High-technology product exports accounted for 19% of the $13.0 trillion in total manufactured goods exports. The value of global high-technology product exports ($2.6 trillion in 2016) was dominated by ICT products—communications, computers, and semiconductors—with a collective value of $1.4 trillion, more than half of the total in this category (Appendix Table 6-26, and Appendix Table 6-31 through Appendix Table 6-34). Aircraft and spacecraft; pharmaceuticals; and testing, measuring, and control instruments combined added about $1.1 trillion in 2016 (Appendix Table 6-35, Appendix Table 6-36, and Appendix Table 6-37).

China is the world’s largest exporter of high-technology goods (24% global share) and has a substantial surplus (Figure 6-26 and Figure 6-27; Appendix Table 6-26). However, because many of China’s exports consist of inputs and components imported from other countries, China’s exports and trade surplus are likely much less in value-added terms (see sidebar Measurement of Trade in Value-Added Terms).

The EU is the second largest global exporter (17% global share), and its trade position is roughly in balance (Figure 6-26 and Figure 6-27; Appendix Table 6-26). The United States is the third largest exporter (12%) closely followed by Taiwan (11%). The United States has a deficit and Taiwan has a substantial surplus. (For a list of regions and countries and economies in world trade data, see Appendix Table 6-38.)

Exports of HT products, by selected region, country, or economy: 2005–16

EU = European Union; HT = high technology; ROW = rest of world.

Note(s)

HT products aircraft and spacecraft; communications and semiconductors; computers; pharmaceuticals; and testing, measuring, and control instruments. Data are not available for EU members Cyprus, Estonia, Latvia, Lithuania, Luxembourg, Malta, and Slovenia. China includes Hong Kong. Other selected Asia consists of Indonesia, Malaysia, Philippines, Singapore, South Korea, Thailand, Taiwan, and Vietnam. Exports of the United States exclude exports to Canada and Mexico. Exports of the EU exclude intra-EU exports. Exports of China exclude exports between China and Hong Kong.

Source(s)

IHS Global Insight, World Trade Service database (2018). See Appendix Table 6-20.

Science and Engineering Indicators 2018

Trade balance of HT products, by selected region, country, or economy: 2005–16

EU = European Union; HT = high technology.

Note(s)

HT products include aircraft and spacecraft; communications and semiconductors; computers; pharmaceuticals; and testing, measuring, and control instruments. Data are not available for EU members Cyprus, Estonia, Latvia, Lithuania, Luxembourg, Malta, and Slovenia. China includes Hong Kong. Other selected Asia consists of Malaysia, Philippines, Singapore, South Korea, Thailand, Taiwan, and Vietnam. Exports and imports of the United States exclude exports to Canada and Mexico. Exports and imports of the EU exclude intra-EU exports. Exports and imports of China exclude exports between China and Hong Kong.

Source(s)

IHS Global Insight, World Trade Service database (2017). See Appendix Table 6-20.

Science and Engineering Indicators 2018

China’s Trade in High-Technology Goods

Between 2011 and 2016, China’s high-technology exports grew 14% to reach $615 billion, and the trade surplus fell from $147 billion to $93 billion (Figure 6-26 and Figure 6-27; Appendix Table 6-26). Growth of China’s high-technology products exports has slowed sharply in the post-global recession period. Exports grew at an annualized average of 3% between 2011 and 2016, compared to 24% between 2001 and 2008. China’s slowdown in high-technology exports reflects the cooling-off of China’s economic growth and sluggish export demand by the EU, Japan, and large developing countries that have had slow or negative economic growth. China’s global share stayed stable at 24% in the post-global recession period after increasing rapidly in the prior decade.

China’s ICT exports also grew at a much slower rate in the post-global recession period than prior to the recession (Appendix Table 6-31 through Appendix Table 6-34). China’s ICT exports dominate its high-technology exports, and China is the world’s largest exporter of ICT products (Appendix Table 6-31). China’s ICT trade surplus slightly narrowed to reach $153 billion during this period.

China is the hub of “Factory Asia,” which produces much of the world’s ICT products. The patterns of China’s trade with its major partners shows its integration with other Asian producers that supply components and parts (Figure 6-28). Imports from eight Asian economies—Indonesia, Malaysia, Philippines, Singapore, South Korea, Taiwan, Thailand, and Vietnam—account for three-quarters of China’s ICT imports. However, conventional trade statistics do not measure the contribution by countries that produce ICT and other products in global value chains. Data on value-added trade, which estimates the contribution of countries for goods produced in global value chains, suggest that the United States, the EU, South Korea, and Taiwan are a significant source of China’s imports of ICT goods in the form of inputs and components (see sidebar Measurement of Trade in Value-Added Terms).

More than half of China’s ICT exports are destined for the three major developed economies—the EU (23%), the United States (22%), and Japan (10%). China’s export share with the eight Asian economies is 20%, far less than its import share (Figure 6-28).

China’s exports of testing, measuring, and control instruments grew more than twice as fast (30%) as its ICT exports between 2011 and 2016 to reach $72 billion (Appendix Table 6-31 and Appendix Table 6-35).

Trade in ICT products of selected regions, countries, or economies, by selected trading partner: 2016

EU = European Union; ICT = information and communications technology; NAFTA = North American Free Trade Agreement; ROW = rest of world.

Note(s)

ICT products include communications, semiconductors, and computers and office machinery. The EU excludes Cyprus, Estonia, Latvia, Lithuania, Luxembourg, Malta, and Slovenia. China includes Hong Kong. Other selected Asia includes Indonesia, Malaysia, Philippines, Singapore, South Korea, Taiwan, Thailand, and Vietnam.

Source(s)

IHS Global Insight, World Trade Service database (2016). See Appendix Table 6-20.

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EU Trade in High-Technology Goods

The EU’s high-technology exports edged up 5% between 2011 and 2016, with the EU’s global share remaining stable at 17%–18% (Figure 6-26; Appendix Table 6-26). Output of the EU’s high-technology manufacturing industries increased slightly during this period, in contrast to growth in exports (Figure 6-11). The euro’s substantial depreciation against the dollar, which made EU exports more competitive in global markets, among other things, may have contributed to the growth of exports (see sidebar Currency Exchange Rates of Major Economies) (Figure 6-11; Appendix Table 6-8). Aircraft and pharmaceuticals grew the fastest, driving the growth of the EU’s high-technology exports (Appendix Table 6-36 and Appendix Table 6-37). The EU is the world’s largest exporter of pharmaceuticals, and its global share remained roughly stable at 44%–46% in the post-global recession period (Appendix Table 6-36). The EU’s trade surplus in pharmaceuticals slightly increased during this period. The EU is the world’s second largest exporter in aircraft; the EU’s global share slid from 39% to 32% (Appendix Table 6-37). The EU’s trade surplus slightly narrowed during this period. Exports of ICT products declined sharply (25%), and the EU’s global share dropped from 7% to 5% (Appendix Table 6-31 through Appendix Table 6-34).

U.S. Trade in High-Technology Goods

U.S. high-technology product exports grew 16% in the post-global recession period, with the U.S. global share remaining stable at 12% (Figure 6-26; Appendix Table 6-26). The U.S. trade deficit remained in a range of $46–$66 billion (Figure 6-27). Aircraft drove overall export growth, increasing by 52% (Appendix Table 6-37). Exports of aircraft climbed to $130 billion, and the related trade surplus widened from $57 billion to $89 billion. The United States maintained its dominance as the world’s largest exporter of aircraft (43% global share). Pharmaceutical exports reached $50 billion, and the deficit widened from $26 billion to $45 billion (Appendix Table 6-36).

ICT product exports declined by 13% to reach $64 billion between 2011 and 2016, with the U.S. global share declining from 6% to 4% (Appendix Table 6-31 through Appendix Table 6-34). Much of the U.S. trade deficit in ICT products ($106 billion) is with China; more than half of U.S. imports are from China, while China has a far smaller share of U.S. ICT exports (Figure 6-28). However, conventional trade statistics attribute the substantial foreign content as part of the value of China’s ICT exports. The United States and other countries export sophisticated ICT inputs and components to China and other Asian economies, and they are then assembled in China. For example, the United States exports slightly half of its total ICT exports to Asian economies involved in ICT production and trade, including China (16%), Japan (5%), and eight other Asian economies—Indonesia, Malaysia, Philippines, Singapore, South Korea, Taiwan, Thailand, and Vietnam (30%) (Figure 6-28). Some of the U.S. ICT exports to other Asian economies likely end up in China. The United States likely has higher exports and a lower trade deficit on value-added terms, which attributes the U.S. content embodied in exports by China and other countries to the value of U.S. exports (see sidebar Measurement of Trade in Value-Added Terms).

High-Technology Goods Trade of Other Countries

Taiwan’s high-technology exports grew by more than 50% during the post-global recession period, reaching $275 billion (Figure 6-26; Appendix Table 6-26). Taiwan’s global share rose from 8% to 11% to nearly reach the level of the United States. Taiwan’s rapid gains in high-technology exports were due to growth of ICT product exports (56%), which reached $238 billion (Appendix Table 6-31 through Appendix Table 6-34). Taiwan is the world’s second largest exporter of ICT products (17% global share) behind China (Appendix Table 6-31).

Vietnam’s exports grew the fastest of any country, with its high-technology exports increasing nearly five-fold to reach $63 billion (Appendix Table 6-26). ICT exports, which comprise nearly all of Vietnam’s high-technology exports, reached $61 billion (Appendix Table 6-31 through Appendix Table 6-34). Vietnam has become a low-cost location for assembly of cell phones and other ICT products, with some firms shifting production out of China, where labor costs are higher.

India’s exports grew 38% between 2011 and 2016 to reach $31 billion. Exports of pharmaceuticals grew by 61% to reach $19 billion (Appendix Table 6-36). India and China are the largest exporters of pharmaceutical goods among developing countries, with a 5% and 4% global share, respectively.

Measurement of Trade in Value-Added Terms

Medium-High-Technology Products

Medium-high-technology product exports accounted for 25% of the $13.0 trillion in total manufactured goods exports. Global medium-high-technology product export value ($3.4 trillion in 2016 measured conventionally at port of entry) was dominated by three products—chemicals excluding pharmaceuticals ($1.2 trillion), machinery and equipment ($1.0 trillion), and motor vehicles and parts ($0.7 trillion) (Figure 6-29; Appendix Table 6-27, Appendix Table 6-39, Appendix Table 6-40, and Appendix Table 6-41). Electrical equipment and appliances added $0.5 trillion, and railroad and other transportation accounted for $24 billion (Appendix Table 6-42 and Appendix Table 6-43).

The EU is the world’s largest exporter of medium-high-technology goods (25% global share). China, the second largest global exporter with a 20% global share, also has a substantial trade surplus, as does Japan (11% global share) (Figure 6-29 and Figure 6-30; Appendix Table 6-27). In contrast, the United States, the fourth largest exporter (8% global share), has a substantial deficit ($225 billion). For a list of regions and countries/economies in world trade data, see Appendix Table 6-38.

Exports of MHT products, by selected region, country, or economy: 2005–16

EU = European Union; MHT = medium-high technology; ROW = rest of world.

Note(s)

MHT products include motor vehicles and parts, electrical machinery, machinery and equipment, chemicals excluding pharmaceuticals, and railroad and other transportation equipment. Data are not available for EU members Cyprus, Estonia, Latvia, Lithuania, Luxembourg, Malta, and Slovenia. China includes Hong Kong. Other selected Asia consists of Indonesia, Malaysia, Philippines, Singapore, South Korea, Taiwan, Thailand, and Vietnam. Exports of the United States exclude exports to Canada and Mexico. Exports of the EU exclude intra-EU exports. Exports of China exclude exports between China and Hong Kong.

Source(s)

IHS Global Insight, World Trade Service database (2017). See Appendix Table 6-20.

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Trade balance of MHT products, by selected region, country, or economy: 2005–16

EU = European Union; MHT = medium-high technology.

Note(s)

MHT products include motor vehicles and parts, electrical machinery, machinery and equipment, chemicals excluding pharmaceuticals, and railroad and other transportation equipment. Data are not available for EU members Cyprus, Estonia, Latvia, Lithuania, Luxembourg, Malta, and Slovenia. China includes Hong Kong. Other selected Asia consists of Indonesia, Malaysia, Philippines, Singapore, South Korea, Taiwan, Thailand, and Vietnam. Exports and imports of the United States exclude exports to Canada and Mexico. Exports and imports of the EU exclude intra-EU exports. Exports and imports of China exclude exports between China and Hong Kong.

Source(s)

IHS Global Insight, World Trade Service database (2017). See Appendix Table 6-20.

Science and Engineering Indicators 2018

EU Trade in Medium-High-Technology Goods

The EU’s medium-high-technology exports fell 10% between 2011 and 2016, with its trade surplus falling from $420 billion to $344 billion (Figure 6-29, Figure 6-30, and Figure 6-31; Appendix Table 6-27).

Exports of chemicals excluding pharmaceuticals, machinery and equipment, and electrical equipment and appliances each fell by 9%–13% during this period (Appendix Table 6-40, Appendix Table 6-41, and Appendix Table 6-42). The EU is the world’s largest exporter of chemicals excluding pharmaceuticals and machinery and equipment. The EU’s global share stayed stable in chemicals excluding pharmaceuticals (19%–20%) and fell slightly in machinery and equipment to reach 29%. The trade surplus in machinery and equipment fell from $190 billion to $152 billion.

Exports of motor vehicles and parts were stagnant during this period (Appendix Table 6-39). The EU is the world’s largest exporter of motor vehicles and parts, excluding the considerable amount of intra-EU exports (34% global share). The considerable value of intra-EU trade in this industry suggests that much of the inputs, components, and final assembly is located in the EU and that many EU-produced cars and trucks are sold within the EU. The United States and China are major export markets for the EU.

China and EU MHT trade, by product: 2016

EU = European Union; MHT = medium-high technology.

Note(s)

MHT products include motor vehicles and parts, electrical machinery, machinery and equipment, chemicals excluding pharmaceuticals, and railroad and other transportation equipment. China includes Hong Kong. Data are not available for EU members Cyprus, Estonia, Latvia, Lithuania, Luxembourg, Malta, and Slovenia. Exports and imports of China exclude exports between China and Hong Kong. Exports and imports of the EU exclude intra-EU exports.

Source(s)

IHS Global Insight, World Trade Service database (2017). See Appendix Table 6-20.

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China's Trade in Medium-High-Technology Goods

China was the only major economy whose exports of medium-high-technology expanded between 2011 and 2016, reaching $689 billion, a 31% increase (Figure 6-29; Appendix Table 6-27). China’s trade surplus widened from $61 billion to $274 billion (Figure 6-30 and Figure 6-31). Over the last decade, China’s exports have nearly tripled, and China’s global share has climbed from 11% to 20%. China surpassed Japan in 2011 to become the world’s second largest exporter, and its gap with the EU, the world’s largest exporter, has narrowed considerably.

Growth of China’s medium-high-technology exports following the global recession has slowed markedly since prior to the recession, from 27% annualized average between 2001 and 2008 to 6% between 2011 and 2016 (Figure 6-29; Appendix Table 6-27). The slowdown of China’s medium–high technology exports coincides with the cooling off of growth its high technology exports.

Exports of machinery and equipment drove overall export growth, increasing 40% to reach $218 billion in 2016 (22% global share) (Figure 6-31; Appendix Table 6-41). The trade surplus grew from $21 billion to $111 billion. Exports of motor vehicles and parts had the highest growth rate among the medium-high-technology products (52%), albeit rising from a low base to reach $59 billion (Appendix Table 6-39). Although most cars and trucks manufactured in China are sold for the rapidly growing domestic market, China’s industry is also exporting an increasing number of cars and trucks. Major markets for China’s exports of motor vehicles and parts are the United States (18% of total exports), other selected Asian economies (12%), and the EU (10%) (Figure 6-32). Exports of electrical equipment and appliances grew by 28% to reach $196 billion (Appendix Table 6-42). China is the dominant global exporter in these products (41% global share). The trade surplus widened from $103 billion to $145 billion.

Trade in motor vehicles and parts of selected regions, countries, or economies, by selected trading partner: 2016

EU = European Union; NAFTA = North American Free Trade Agreement; ROW = rest of world.

Note(s)

Data are not available for EU members Cyprus, Estonia, Latvia, Lithuania, Luxembourg, Malta, and Slovenia. China includes Hong Kong. EU exports and imports exclude intra-EU trade. China exports and imports exclude trade between China and Hong Kong. The EU excludes Cyprus, Estonia, Latvia, Lithuania, Luxembourg, Malta, and Slovenia. Other selected Asia includes Indonesia, Malaysia, Philippines, Singapore, South Korea, Taiwan, Thailand, and Vietnam.

Source(s)

IHS Global Insight, World Trade Service database (2016). See Appendix Table 6-20.

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Japan’s Trade of Medium-High-Technology Goods

Japan’s medium-high-technology exports fell 21% between 2011 and 2016 to reach $364 billion, and its trade surplus declined $80 billion to reach $237 billion (Figure 6-29, Figure 6-30, and Figure 6-33; Appendix Table 6-27).

Exports of chemicals excluding pharmaceuticals, machinery and equipment, and electrical equipment and appliances fell by 25%–27% (Appendix Table 6-40, Appendix Table 6-41, and Appendix Table 6-42). Exports of motor vehicles and parts fell by 11% to reach $144 billion, and the trade surplus declined from $144 billion to $125 billion (Figure 6-33; Appendix Table 6-39). Japan is the second largest exporter of motor vehicles and parts (20% global share). The United States is a major market for Japan’s exports of automobiles, trucks, and parts (30% of total exports) (Figure 6-32). The EU (10%) and several Asian countries—Indonesia, Malaysia, Philippines, Singapore, South Korea, Taiwan, Thailand, and Vietnam (13%)—receive a comparatively smaller share of Japan’s exports.

Japan and United States trade in MHT products, by product: 2016

MHT = medium-high technology.

Note(s)

MHT products include motor vehicles and parts, electrical machinery, machinery and equipment, chemicals excluding pharmaceuticals, and railroad and other transportation equipment. Exports and imports of the United States exclude exports to Canada and Mexico.

Source(s)

IHS Global Insight, World Trade Service database (2017). See Appendix Table 6-20.

Science and Engineering Indicators 2018

U.S. Trade of Medium-High-Technology Goods

U.S. medium-high-technology product exports declined 12% in the post-global recession period of 2011–16 to reach $273 billion (Figure 6-29; Appendix Table 6-27). The U.S. trade deficit nearly doubled from $117 billion to $225 billion during this period (Figure 6-30) Output of U.S. medium-high-technology industries rose by 17% during this period, in contrast to the decline in exports (Figure 6-16 and Figure 6-29; Appendix Table 6-7 and Appendix Table 6-27). The dollar’s substantial appreciation against the euro, yen, and other currencies, which made U.S. exports less competitive, may have been a factor in the decline in exports (see sidebar Currency Exchange Rates of Major Economies).

Exports of chemicals excluding pharmaceuticals declined by 15% between 2011 and 2016 to reach $106 billion (Appendix Table 6-40). Exports of machinery and equipment declined by 9% to reach $90 billion (Appendix Table 6-41). Exports of motor vehicles and parts fell slightly from $56 billion to $54 billion (Appendix Table 6-39). The largest major export market is the other NAFTA countries—Canada and Mexico (57%) suggesting that much of the production of inputs, components, and final assembly is located within NAFTA (Figure 6-32). This is because transportation costs are high and companies find it advantageous to co-locate R&D and testing near production so that they can effectively understand and respond to local market conditions.

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