International Trade: France, Italy, and UK
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This paper focuses on the issues of international trade of EU and its main trade partners, with an emphasis put on the description and analysis of exports and imports of the three pointed countries – the United Kingdom, France, and Italy, gains that they receive from the specialization and international trade. It also points out the environmental sustainability initiatives promoted by the United Kingdom, France, and Italy.
As it is stated by the European Commission Eurostat (2013), “more than two thirds of the EU-27’s credits (67.7 %) and debits (70.0 %) in the international trade of services in 2011 were accounted for by three categories: transport, travel and other business services”. Northern America, as well as EFTA, Asian, and Arabian Gulf countries were the main extra-EU trade partners. It should be pointed out that in 2011, extra-EU international trade in goods accounted for EUR3,267,467 million. The United Kingdom, France, and Italy were second, third, and fourth largest player in extra EU trade. Intra-EU trade was estimated in 2011, at the level of EUR2,804,131 million. Switzerland, Russia, and the United States were the main trade partners in extra-EU trade.
Regarding the profiles of France, Italy, and the UK in the international trade indicators, it is necessary to point out that the UK in 2011 imported $634,412,462 in goods value, and exported $472,095,631. Germany, the United States of America, China, the Netherlands, and France were the major trade partners in import relationships; the United States of America, Germany, the Netherlands, France, and Ireland were the main destinations for export from the United Kingdom in 2011. It is worth mentioning that in 2012, exported growth in value between 2010-2011 accounted for 16.3 percent, while it dropped sharply between 2011-2012 to a level of -0.7 percent. At the same time, imported growth in value between 2010-2011 was equal to 12.8 percent, and between 2011-2012 it accounted for 7.2 percent (International Trade Center, 2013).
According to the International trade center (2013), in 2011, France reported $700,851,646 in imports of goods, and $581,541,871 in exports. Main trade partners in import operations were Germany, Belgium, Italy, the Netherlands, and Spain. France exported goods mainly to Germany, Belgium, Italy, Spain, and the United Kingdom. Exported growth in value between 2010-2011, accounted for 13.7 percent. There was a sharp drop in exports during the period 2011-2012, and it accounted for -2 percent. Imported growth in value between 2010-2011, amounted to 17 percent, and the trend in growth was the same as in exports -3.7 percent in imported growth in value between 2011-2012.
Italy’s imports in goods were equal to $557,510,701 in 2011, and it exported $523,179,069. Germany, France, China, the Netherlands, and Russian Federation were main trade partners in imports; Germany, France, the United States of America, Switzerland, and the United Kingdom were the main countries-partners in exports. Exported growth in value between 2010-2011, accounted for 17.1 percent. Similarly to the United Kingdom and France, there was a drastic change in growth, and it accounted for -4.3 percent between 2011-2012. 14.5 percent was recorded as imported growth in value between 2010-2011. The drop in this percentage during the period 2011-2012 was the sharpest, as compared to the United Kingdom and France. It accounted for -12.7 percent (International Trade Center, 2013).
The results of these three pointed countries in international trade in services realm are as following: in 2011 the United Kingdom imported $166,731,36 in total services. The leading imported services are travel, other business services (including miscellaneous business, professional and technical services, operational leasing services and merchant and other trade-related services), transportation, financial services, royalties and license fees, and communication services. Exports of services in the United Kingdom in 2011 were equal to $250,043,680. Other business services (including miscellaneous business, professional and technical services), financial services, transportation, and travel were the main services for exports in 2011.
France imported $191,154,080 and exported $224,896,896 in total services in 2011. France specialized in other business services, travel, transportation, royalty and license fees, and construction services exports. Services imports were other business services, transportation, and travel. Italy declared the lowest figures in services imports amounting to $116,579,336 and $106,852,680 in total services exports.
Taking into consideration major exporting and importing industries, it should be stated that in 2012 in exports the United Kingdom specialized in oils, mineral fuels (14.22 percent of total goods exports), machinery (14.2 percent of total goods exports), vehicles other than railway (9.96 percent of total goods exports), and pharmaceutical products (7.09 percent of total goods exports). Exports of electrical, electronic equipment, precious metals and stones, organic chemicals, technical and optical apparatus, spacecraft, aircraft, and parts follow them. Regarding the specialization in goods imports, it is important to point out that the United Kingdom imported oils and mineral fuels (13.98 percent of total goods imports), machinery (11.95 percent of total goods imports), precious metals and stones (11.48 percent of total goods imports), vehicles other than railway, electrical, electronic equipment, and pharmaceutical products (International Trade Center, 2013).
France’s specialization in the international goods trade is displayed by the following facts: in 2012 France’s core specialization in goods exports was in the machinery (11.36 percent of total goods exports), spacecraft, aircraft and parts (9.64 percent of total goods exports), vehicles other than railway (8.25 percent of total goods exports), electrical, electronic equipment, pharmaceutical products, oils and mineral fuels , and plastics and beverages. Imports of goods constituted of oils and mineral fuels, boilers and machinery, vehicles other than railway, electrical, electronic equipment, and spacecraft and aircraft and parts (International Trade Center, 2013).
In 2012, Italy exported machinery (19.74 percent of total goods exports), vehicles other than railway (6.98 percent of total goods exports), mineral fuels (5.97 percent of total goods exports), electrical, electronic equipment, pharmaceutical products, plastics and articles thereof, articles of steel and iron, precious metals and stones, iron and steel, and furniture and prefabricated buildings. In 2012, Italy imported mainly oils and mineral fuels, boilers and machinery, electrical units, electronic equipment, vehicles other than railway, and pharmaceutical products (International Trade Center, 2013).
It is obvious that international trade proposes numerous gains for these countries, both static and dynamic. Having comparative advantages in production and exports of particular products allows the countries to have a low opportunity cost and import more-valued goods. Static gains from the international trade and specialization in particular industries provide the country with the possibility to use its scarce resource in a more optimal way with an aim of increasing the national output; thus, improving the social welfare of its citizens. Enlargement of the scale of trade by extending the domestic market to the foreign market due to the international trade implies the economic growth for the country that chose the specialization in particular commodities, for which the country has lower comparative cost. Regarding industries that allow the United Kingdom, France, and Italy to increase its volume of exports, or in other words, to demonstrate their core specialization in international trade, it is needed to indicate the following.
It is essential to underline that Italy is the biggest producer of wine; thus, the biggest exporter of wine in the world. Exports of agricultural products such as fruits, rice, and vegetables give Italy the status of the major agricultural player in the European Union. Moreover, Italy is among the 10 countries included in top list of the best ratio of trade to GDP, whereas trade comprises 60 percent of the Italy’s GDP. 90 percent of the total exports is provided by the manufactured goods. Italy’s prime specialization is in luxury goods exports (delicatessen foods, haute couture, cars). Other industries that make Italy influential player on the world trade arena are chemical and pharmaceutical industries, production of precision machinery and motor vehicles, and electrical items (Global Trade Directory, 2013).
It is necessary to highlight that the United Kingdom is a significant player on the world trade market. It is necessary to underline that the United Kingdom is the second biggest exporter of commercial services in the world. It possesses the tenth place among all world exporters, and 6th place as the biggest importer of goods. In agriculture, its core specialization is livestock farming. The country has considerable mineral resources. It is one of the biggest producers of oil (10th place in the world). In manufacturing sector, chemical products, transport material, and tool machinery are the most valuable sectors. Moreover, the UK develops the industries, where it has a competitive advantage, such as communication and information technologies, aviation industry, biotechnology, and renewable energies. France is the second agricultural power that is behind the United States. Electronics, telecommunications, aerospace, cars, and weapons are the main industrial sector that France develops to be competitive on the world market (Global Trade Directory, 2013).
It should be stated that according to the European Commission on Environment (2013), the United Kingdom, Italy, and France follow the developed Industrial Action Plan “that will contribute to improving the environmental performance of products and increase the demand for more sustainable goods and production technologies”. Moreover, these countries are facilitated to implement innovations in all areas of their specialization. The EU’s Sustainable Development Strategy aims at transforming environmental challenges into the greater opportunities for business and customers.