INTERNATIONAL

TRADE
2. PORTUGAL : EXTERNAL TRADE
INDICATORS
2 INCOTERMS

• International Commercial Terms

• Ex Works, FOB, CIF

• INE :Imports CIF, exports FOB
 Portugal: Current account balance and trade,
%GDP
10,0 3 Antes da Pandemia o turismo
estava a subir

5,0
a
surpeus
~>
passou

0,0
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
- 5,0
-> estava em défice

- 10,0

- 15,0
Current account balance Goods Services
4

e
5

WHAT GOODS DOES

PORTUGAL IMPORT AND
EXPORT?
6 PORTUGAL: MAJOR EXPORTS
 7 PORTUGAL: MAJOR IMPORTS

we import

and expOr-1
the "Same"
900dS
8

WHICH COUNTRIES ARE

PORTUGAL’S MAJOR
TRADING PARTNERS?
Spain .
France . Germany ...
9 ORIGIN OF IMPORTS
10 EXPORT DESTINATION
SIZE MATTERS: THE GRAVITY
MODEL
• 3 of the top 10 trading partners with the U.S.
in 2012 were also the 3 largest European economies:
Germany, the United Kingdom, and France.
• Why does the United States trade more with these
European countries than with others?
• These countries have the largest gross domestic product
(GDP), the value of goods and services they're big economies
economic terms
in
produced in an economy, in Europe.
• Each European country s share of U.S. trade with Europe is
roughly equal to its share of European GDP.
FIG. 2-2: THE SIZE OF EUROPEAN ECONOMIES, AND
THE VALUE OF THEIR TRADE WITH THE UNITED
STATES

has the biggest GDD

SIZE MATTERS: THE GRAVITY MODEL
(CONT.)

• The size of an economy is directly related to the volume of

imports and exports.
• Larger economies produce more goods and services, so they have
more to sell in the export market.

• Larger economies generate more income from

the goods and services sold, so they are able to buy more imports.

• Trade between any two countries is larger, the larger is

either country.
SIZE MATTERS: THE GRAVITY MODEL
(CONT.)

• The gravity model assumes that size and distance

are important for trade in the following way:
constant

Tij = A x Yi x Yj /Dij
=> unexpeained parts are
in constant A

L
p
where
distance
acountries

Tij is the value of trade between country i and country j

A is a constant
Yi the GDP of country I, Yj is the GDP of country j
Dij is the distance between country i and country j
USING THE GRAVITY MODEL:
LOOKING FOR ANOMALIES
• A gravity model fits the data on U.S. trade with European
countries well but not perfectly.
• The Netherlands, Belgium and Ireland trade much more
with the United States than predicted by a gravity model.
• Ireland has strong cultural affinity due to common language and
history of migration.
• The Netherlands and Belgium have transport cost advantages due to
their location.
IMPEDIMENTS TO TRADE: DISTANCE,
BARRIERS, AND BORDERS
Other things besides size matter for trade:
1. Distance between markets influences transportation costs and
therefore the cost of imports and exports.
2. Cultural affinity: close cultural ties, such as a common language,
usually lead to strong economic ties.
3. Geography: ocean harbors and a lack of mountain barriers make
transportation and trade easier. p e
.
smate islands it's harder
:
to connect

4. Multinational corporations: corporations spread across different

nations import and export many goods between their divisions.
5. Customs: crossing borders involves formalities that take time, often
different currencies need to be exchanged, and perhaps monetary
costs like tariffs reduce trade.
THE CHANGING PATTERN OF WORLD ~

TRADE: HAS THE WORLD GOTTEN SMALLER?

• The negative effect of distance on trade according to

the gravity models is significant, but has grown smaller
over time due to modern transportation and
communication. Distant countries (p e
passado
que no
.
: Chinal conseguem trade mais agora

• Technologies that have increased trade:

• Wheels, sails, compasses, railroads, telegraph, steam
power, automobiles, telephones, airplanes, computers, fax
machines, Internet, fiber optics, personal digital assistants,
GPS satellites…
18 TRADE BALANCE

• Trade balance value

Balança de pagamentos

(X-M)
Net ExportS

• Normalised trade balance value

((X-M) /(X+M))
 Trade balance: absolute value and normalised
5 000,0 0,050

19
0,0 0,000
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

-5 000,0 - 0,050

seguem o mesmo
-
-10 000,0 BadrQG - 0,100

-15 000,0 - 0,150

-20 000,0 - 0,200

Trade account balance Normalised Trade account balance

Data Sources: INE - Annual National Accounts (Base 2016)
20 EXTERNAL TRADE INDICATORS
(CONT.)
• Coverage Degree
(EXP/IMP) * 100
• Degree of Openness
otae trade
-

((EXP+IMP)/GDP)*100
• Imports Penetration domestic demand
e
C G I

IMP/(GDP+IMP-EXP)
+ +
21
Coverage degree
120

100
3
>100 quando

exports > imDOrtS

80

60

40

20

0
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Data Sources: INE - Annual National Accounts
(Base 2016)
 Trade account Normalised Trade
Coverage degree
balance account balance
1996 -6 685,4 -0,118 78,94415259
22 1997 -8 196,2 -0,129 77,20443446
1998 -10 163,0 -0,143 74,98541657
1999 -12 246,6 -0,162 72,16565374
2000 -13 987,1 -0,161 72,26449178
2001 -13 644,6 -0,154 73,32434018
2002 -11 503,2 -0,129 77,10298511
2003 -9 276,8 -0,104 81,22603115
2004 -11 774,9 -0,122 78,26821994
2005 -13 527,0 -0,135 76,17743557
2006 -12 941,0 -0,113 79,62884839
Data Sources: 2007 -12 812,0 -0,104 81,16920816
INE - Annual 2008 -16 564,4 -0,128 77,33795577
National 2009 -11 867,3 -0,110 80,15826838
Accounts (Base 2010 -13 168,2 -0,108 80,50720755
2011 -6 528,2 -0,050 90,42052715
2016) 2012 3,0 0,000 100,0046692
2013 2 966,9 0,022 104,5274554
2014 1 371,7 0,010 101,9884428
2015 2 520,0 0,017 103,5334847
2016 3 174,7 0,021 104,3783047
2017 (R) 2 870,8 0,017 103,5319925
2018 (R) 1 849,0 0,010 102,1066352
2019 (R) 1 558,7 0,008 101,6930907
2020 -3 583,3 -0,023 95,41391019
 Portugal: Degree of openness
100,00
23
90,00

80,00
trade é 90% dO DIB
-

PONUGUES
70,00

60,00

50,00

40,00

30,00

20,00

10,00

0,00
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
15
16
17
18
19
19
19
19
19
19
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
24

https://tcdata360.worldbank.org
 25
A cot of goods are nowadays
imported

->

Data Sources: INE - Annual National Accounts

(Base 2016)
 26 IMPORT PENETRATION BY
PRODUCTS RANGES FROM... TO...

Public
administration
Machinery Computer,
and defence
Social work and electronic
Total services,
services equipment and optical
compulsory
n.e.c. products
social security
services
2019 22,51 0,00 0,01 92,69 111,12

Data Sources: INE - Annual National Accounts

(Base 2016)
 0,00
5,00
10,00
15,00
20,00
25,00
19
95
19
96
19
27
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
Exp/GDP*100

20
Export intensity

10
20
11
20
12
20
-

13
20
14
20
15
it has increased
:

exportamos mais

20
16
20
17
20
18
20
19
 maior exportador de cortiça

28
29 HIRSCHMAN HERFINDAHL
INDEX concentration index
~>

It is the sum of squared shares of each product in

total export. A country with a perfectly diversified
export portfolio will have an index close to zero,
whereas a country which exports only one export
will have a value of 1 (least diversified).
 https://tcdata360.worldbank.org

30 Hirschman Herfindahl Index

more specialized

more diversified
~
 mainey exports/ imports machinery

31

exDOr+A
· se não importa nada daria 4 :
não
no intra-industry trade
· se exp-impentão seria -
32 INTRA-INDUSTRY TRADE (GL-
INDEX)