59554 v1 * TRADE WATCH rd 3 Quarter 2010 To see the note and data updates visit: http://www.worldbank.org/research/trade/ Authors: Caroline Freund (cfreund@worldbank.org) Ileana Cristina Neagu (ineagu@worldbank.org) The World Bank DECRG * TRADE WATCH is a quarterly note that follows international trade flows from a global perspective. It contains up- to-date trade data from an array of sources along with an analysis from Caroline Freund and Ileana Cristina Neagu, international trade specialists in the Development Economics Research Group, covering issues such as import and export growth at national, regional and industry levels, exchange rate fluctuations and quantity and price decomposition of trade. The goal of the note is to provide high quality and timely information to World Bank units and stakeholders. The report is supported by funding the governments of Norway, Sweden and the United Kingdom through the Multidonor Trust Fund for Trade and Development. 3nd QUARTER 2010 TRADE WATCH TRADE UPDATE ­ TRADE IN EUROPE SURGES · Trade is up sharply in Europe in the third quarter. · Following a period of strong growth in East Asia and Latin American, trade growth slows somewhat. · Sectoral evidence from the US shows imports of food and light manufactures are up. Japan records significant weakness across sectors, with only foodstuffs near pre-crisis levels. Data for the third quarter of 2010 show continued export and import growth. Tables 1 and 2 show seasonally adjusted export and import growth, respectively, 1 using 7 years of monthly trade data in constant dollars for 63 countries. Q3 2010 data indicate a 3.6 percent increase in exports and a 5.5 percent increase in imports. However, some regional disparities are highlighted in quarterly growth rates by region, shown in Figures 1 and 2. 2 The dark bars represent the most recent quarter's growth rates, and the lighter bars show the previous quarter's growth rates. Trade in Western Europe is strong relative to the previous quarter. This evolution is not surprising, especially for Euro-country exports, given the sharp depreciation that took place in May and June. Indeed, exports from Cyprus, France, Italy, Portugal and Spain were up over 10 percent in the third quarter. Trade also picked up in many Eastern European countries, although Central Asian exports were weak, as depicted in Figures 3 and 4. Export strength was especially evident in those countries tied to the Euro, such as Bulgaria, Estonia and Latvia. Growth rates in East Asia and the Pacific and Latin America and the Caribbean have diminished considerably. Seven of the 63 economies included in the analysis--Brazil, China, Hong Kong, Italy, Pakistan, Switzerland and Vietnam--have now reached or exceeded the pre-crisis export and import levels. This is illustrated in Table 3, which shows how trade of Q3 2010 fares relative to the value two years ago, when trade was booming. On average, the remaining gap is around 8.8 per cent for exports and 16.9 per cent for imports.3 Trade fell fast and furiously across countries since the onset of the financial crisis in the fall of 2008. Figure 5 compares trade growth (month over same month the previous year) in this crisis and in previous downturns (1975, 1982, 1991, and 2001), using monthly data in constant U.S. dollars for a balanced sample of 40 countries that report data from January 1960 through September 2010. Data are matched so that year zero is the lowest 1 We converted nominal trade to year's 2000 constant dollars growth and seasonally adjusted using country-month fixed effects. 2 Africa and the Middle East are not included because there are not enough countries reporting data for credible statistics. 3 The gap between average exports and imports is due primarily to the absence of several of the large oil exporting countries in the analysis, where exports declined by more than imports. 2 3nd QUARTER 2010 TRADE WATCH point of the contraction. Growth leading up to the crisis was higher and the fall deeper in this episode than in previous downturns. Of special interest, the recovery also appears to be much steeper in this crisis than in previous episodes. The graph highlights the completion of a V-shaped recovery. Figure 6 shows that trade has been recovering at almost twice the growth rate of the 2002-2008 period and increased nearly 30 percent since its lowest point in February 2009. While the trade value remains around 20 percent lower than the pre-crisis peak, this is partly driven by surging commodity prices which fueled a run-up in trade values before the crisis. U.S. and Japanese data, available by industry, provide an indication of where trade is declining/recovering the fastest. Table 4 shows U.S. import growth by broad sector relative to the same quarter of the previous year. Similar data for Japan (measured in Yen) are shown in Table 5. 4 In both countries, data for the 3rd quarter of 2010 (column 8) shows significant improvement across sectors as compared with the 3rd quarter of 2009, but this is largely due to the sharp decline in trade that occurred in Q1 2009, which left trade in Q3 at low levels. The last column shows Q3 2010 relative to Q3 2008, to examine how the pattern of trade now compares with its structure just before the crisis. In the United States, while many sectors remain depressed, a few--especially light manufactures, such as, textiles and footwear--are now above pre-crisis levels. In Japan, with the exception of foodstuffs, all sectors remain well below pre-crisis levels. If you wish to receive a monthly Trade Watch, email ineagu@worldbank.org with "Trade Watch" in the subject. For previous notes and more trade statistics visit the Trade Watch webpage at http://www.worldbank.org/research/trade/ 4 Aggregate figures for Japan in Table 5 are calculated from Yen values and therefore are different from Tables 1, 2 and 3 which use data in $US. 3 Table 1: Quarter-to-Quarter Export Growth (Percentage Change in Constant U.S. Dollars ­ Seasonally Adjusted) 2008 2009 2010 1st 2nd 3rd 4th 1st 2nd 3rd 4th 1st 2nd 3rd Argentina 3.8 10.7 26.1 25.7 12.2 9.1 8.9 5.6 0.9 24.6 1.7 Australia 9.6 15.0 10.6 14.7 8.9 9.9 8.5 10.3 6.2 20.8 3.1 Belgium 6.3 4.0 4.2 21.8 12.9 4.4 12.4 5.1 0.1 0.9 5.7 Brazil 2.3 11.5 5.5 11.8 20.5 10.7 2.3 7.7 10.6 17.0 1.9 Bulgaria 10.7 6.3 5.9 27.4 12.9 0.1 13.3 10.4 4.8 7.0 13.6 Canada 4.8 3.4 1.5 22.7 22.3 3.7 9.7 5.1 6.2 3.3 1.5 Chile 6.4 12.7 7.0 20.3 11.3 2.1 14.7 8.8 2.9 8.9 20.1 China 4.3 3.6 6.5 10.8 15.8 3.0 12.0 9.3 4.8 8.1 5.3 Colombia 6.8 4.8 5.7 17.1 1.2 6.6 2.7 6.1 11.5 0.3 6.7 Croatia 2.5 5.8 8.1 24.5 2.9 3.8 5.9 4.6 6.4 0.7 4.6 Cyprus 12.5 9.8 0.8 19.0 23.6 9.4 13.9 2.0 0.5 4.2 25.8 Czech Republic 14.1 0.8 4.6 25.4 14.8 5.0 17.2 0.9 0.6 0.9 10.1 Denmark 9.6 3.8 8.2 22.4 7.9 2.2 9.5 0.0 0.0 0.4 5.3 Ecuador 7.1 4.8 8.9 35.2 15.7 13.9 12.0 9.1 1.9 1.6 8.4 Egypt 33.0 27.3 12.4 39.1 6.0 13.2 1.3 4.3 3.4 10.5 1.6 Estonia 5.0 5.6 4.0 21.2 24.5 8.9 10.8 0.0 1.2 2.1 13.0 Finland 9.8 7.0 11.1 25.9 20.8 3.3 1.4 11.8 14.6 11.9 3.1 France 11.5 0.4 1.1 15.3 10.5 3.9 16.8 3.9 1.8 1.1 10.0 Germany 7.7 3.9 5.8 19.3 14.5 2.2 12.8 3.5 0.8 2.9 6.1 Greece 0.5 12.1 1.9 18.3 13.6 0.3 3.0 1.5 3.6 6.2 6.7 Hong Kong 1.1 0.6 0.1 1.2 16.7 13.0 1.6 11.1 4.0 11.9 1.9 Hungary 14.8 1.4 7.4 22.8 10.5 6.4 11.7 7.3 2.7 1.6 6.2 Iceland 22.1 50.3 9.9 21.7 30.1 3.2 32.8 16.2 6.8 11.8 11.9 India 1.6 7.4 3.7 21.8 13.1 1.8 9.9 2.0 7.0 10.9 1.2 Indonesia 14.9 3.4 3.0 20.0 14.7 12.8 6.4 21.0 7.1 0.5 0.5 Ireland 6.4 1.5 2.8 9.8 2.7 3.8 4.6 5.9 7.0 3.1 7.7 Israel 0.2 2.1 1.0 21.9 12.1 9.5 16.2 10.2 4.4 1.2 9.1 Italy 12.1 0.5 5.1 10.7 10.4 5.0 22.5 14.1 3.0 3.6 13.5 Japan 8.1 0.9 0.5 13.6 24.7 8.2 16.0 10.4 7.6 5.9 5.4 Kazakhstan 19.8 0.7 5.3 35.7 42.2 6.5 28.5 3.4 6.5 1.6 15.4 Korea, Republic of 2.7 9.0 2.8 22.7 13.0 15.2 8.6 2.3 4.4 14.2 1.8 Latvia 9.2 1.3 0.2 23.7 14.1 0.2 15.1 9.9 4.9 2.1 15.6 Average 7.5 4.6 0.9 21.6 14.3 4.0 11.5 5.4 2.6 4.3 3.6 Source: Datastream and International Financial Statistics. Note: Data reported in national currency is converted to current U.S. dollars using average monthly nominal exchange rates. Series are deflated using the U.S. CPI index and deseasoned using country speciffic time dumies. 3nd QUARTER 2010 TRADE WATCH Table 1: Quarter-to-Quarter Export Growth Continued (Percentage Change in Constant U.S. Dollars ­ Seasonally Adjusted) 2008 2009 2010 1st 2nd 3rd 4th 1st 2nd 3rd 4th 1st 2nd 3rd Lithuania 25.5 11.2 3.6 27.8 18.5 3.9 14.0 6.9 3.6 5.3 8.5 Luxembourg 10.6 7.1 1.0 28.9 14.5 3.2 28.6 4.0 2.4 5.1 8.0 Malaysia 2.5 5.4 2.5 22.2 14.5 0.9 6.9 15.8 8.6 0.9 1.7 Malta 1.0 10.1 0.3 16.0 20.5 5.7 16.3 7.0 15.8 6.0 11.1 Mexico 0.3 2.1 2.9 20.1 14.5 0.7 8.8 12.0 5.1 5.4 3.2 Netherlands 6.1 2.4 4.9 20.1 14.2 1.5 11.5 2.7 1.3 1.5 4.4 New Zealand 0.5 6.7 2.4 16.0 14.3 6.4 7.1 5.9 3.7 4.1 0.3 Norway 4.6 7.6 9.9 25.3 19.3 10.7 10.9 6.6 4.3 7.0 5.1 Pakistan 8.4 4.5 8.2 7.2 9.9 2.3 6.5 13.1 7.5 4.6 0.9 Peru 9.1 1.7 5.1 25.2 10.7 7.7 7.1 11.8 7.0 2.5 4.3 Philippines 3.2 0.2 2.0 20.8 19.3 16.1 9.0 4.0 6.9 10.2 15.2 Poland 14.6 4.6 4.8 26.4 8.5 5.3 12.0 5.4 0.4 0.8 0.1 Portugal 13.5 1.0 1.7 20.8 10.9 8.4 20.8 6.9 1.8 0.3 10.1 Romania 7.5 8.3 3.3 18.4 16.0 13.3 15.6 10.0 5.6 7.1 6.6 Russian Federation 9.9 2.6 3.9 30.2 30.0 7.4 16.9 10.0 9.1 3.7 3.6 Singapore 8.5 2.2 1.9 23.5 13.3 7.2 10.4 7.5 6.3 8.7 3.0 Slovakia 11.7 4.0 8.6 21.2 14.9 3.7 11.6 10.2 3.0 1.3 3.4 Slovenia 9.2 2.6 1.6 18.2 12.9 5.3 11.6 8.9 3.8 3.1 7.7 South Africa 0.2 7.5 7.2 27.9 14.4 5.8 16.6 7.2 1.9 9.2 13.8 Spain 10.2 3.0 3.5 21.3 10.7 9.6 17.8 5.1 0.7 1.4 11.3 Sweden 7.1 0.6 8.2 26.0 15.0 4.1 14.3 1.6 3.6 5.0 8.5 Switzerland 13.6 7.3 2.4 15.2 5.5 2.2 11.0 3.3 4.9 0.1 8.0 Taiwan, Province of China 0.2 3.5 3.2 25.3 16.0 11.2 14.3 6.9 10.6 10.6 0.7 Thailand 3.2 5.5 0.0 19.2 6.2 1.6 12.3 6.9 8.7 9.3 1.7 Turkey 13.3 6.2 4.5 30.2 1.3 17.0 12.0 3.9 3.7 2.2 2.9 Ukraine 12.4 24.7 13.5 34.5 26.6 0.4 15.2 19.1 5.2 14.9 5.9 United Kingdom 0.6 0.1 1.7 21.6 17.1 1.3 16.2 5.6 2.5 2.0 9.5 United States 2.1 1.4 1.8 13.4 14.8 2.5 8.2 6.5 2.4 3.3 5.1 Uruguay 21.1 3.2 2.4 13.2 5.7 14.7 0.8 1.9 10.0 27.8 9.0 Venezuela 12.4 15.3 6.1 52.1 34.9 31.3 22.6 23.4 12.2 11.4 10.9 Viet Nam 6.5 8.0 9.0 12.7 3.5 14.8 1.1 13.6 2.4 21.1 4.0 Average 7.5 4.6 0.9 21.6 14.3 4.0 11.5 5.4 2.6 4.3 3.6 Source: Datastream and International Financial Statistics. Note: Data reported in national currency is converted to current U.S. dollars using average monthly nominal exchange rates. Series are deflated using the U.S. CPI index and deseasoned using country speciffic time dumies. 5 3nd QUARTER 2010 TRADE WATCH Table 2: Quarter-to-Quarter Import Growth (Percentage Change in Constant U.S. Dollars ­ Seasonally Adjusted) 2008 2009 2010 1st 2nd 3rd 4th 1st 2nd 3rd 4th 1st 2nd 3rd Argentina 12.0 2.5 1.1 19.3 24.8 3.2 8.6 5.4 13.2 14.3 8.9 Australia 11.3 3.7 0.4 21.2 11.1 0.1 13.6 13.0 0.0 2.7 3.4 Belgium 2.5 5.7 4.0 23.3 17.0 0.0 11.1 4.1 4.5 1.7 1.7 Brazil 8.7 5.5 8.9 13.8 24.6 2.3 12.4 10.0 9.5 8.5 8.2 Bulgaria 5.2 9.0 11.4 25.0 21.8 1.6 1.8 1.2 6.3 6.5 1.8 Canada 0.3 1.7 2.1 14.7 18.7 2.4 11.3 4.6 2.5 6.2 3.8 Chile 5.2 3.0 1.4 19.8 27.3 8.0 4.7 12.5 4.5 9.7 3.8 China 6.9 4.2 2.6 21.4 16.8 22.1 15.5 8.2 12.2 9.9 2.4 Colombia 3.9 0.9 4.0 6.2 12.0 13.1 8.1 0.2 9.7 0.8 15.0 Croatia 7.1 1.0 0.6 21.4 13.6 3.1 7.8 2.3 9.6 7.1 11.5 Cyprus 14.9 0.0 5.5 27.7 10.1 6.4 9.4 2.2 8.9 12.3 2.6 Czech Republic 14.5 1.4 4.2 21.5 17.0 1.4 17.0 0.7 3.6 1.3 11.6 Denmark 7.0 2.8 6.7 19.0 12.2 7.3 8.8 1.0 5.3 1.1 5.6 Ecuador 1.5 11.0 13.5 8.6 18.4 11.7 7.9 7.6 7.5 9.2 11.7 Egypt 3.4 60.9 9.9 11.4 20.0 4.6 17.9 1.9 1.3 0.9 14.6 Estonia 2.4 1.9 1.9 21.2 29.7 5.5 14.1 2.1 0.6 2.5 13.1 Finland 6.9 3.2 6.7 26.4 21.2 4.1 11.7 0.6 6.5 0.8 7.2 France 7.7 2.7 0.9 18.0 13.8 1.7 9.9 6.6 3.2 0.1 6.4 Germany 7.9 2.6 1.5 19.7 10.8 4.1 11.6 1.0 4.5 2.1 4.5 Greece 3.5 11.5 5.0 27.3 15.8 4.8 14.0 15.7 8.4 11.3 4.0 Hong Kong 1.9 1.1 0.3 1.3 18.9 10.9 5.9 9.7 3.7 11.0 2.0 Hungary 10.9 1.0 4.5 23.3 16.8 0.3 13.0 6.9 1.0 2.8 8.3 Iceland 12.3 8.0 6.8 46.3 10.4 17.5 19.3 8.8 0.7 3.5 14.3 India 10.4 8.1 20.3 25.7 26.4 14.2 5.8 5.9 10.8 2.0 2.7 Indonesia 43.7 10.2 2.2 17.2 27.3 9.7 15.8 12.1 9.8 4.3 0.2 Ireland 2.2 3.2 6.0 24.5 6.9 3.2 0.0 4.6 4.0 1.0 2.9 Israel 0.6 0.5 4.8 25.4 24.5 2.4 11.7 1.6 1.1 0.4 4.9 Italy 9.5 1.2 2.8 16.3 14.9 0.4 16.4 9.4 4.1 2.7 9.1 Japan 8.0 2.7 4.8 12.3 25.9 5.2 13.4 4.2 4.1 4.3 4.1 Kazakhstan 5.8 6.4 8.9 8.3 19.7 9.0 1.6 6.3 10.0 9.1 27.7 Korea, Republic of 5.3 4.2 8.0 28.5 20.6 0.0 16.2 2.6 6.7 6.0 2.0 Latvia 5.1 9.0 4.8 25.0 20.6 16.2 10.0 0.7 1.1 5.2 14.9 Average 7.7 3.5 0.6 20.8 17.4 0.9 11.4 3.6 2.5 2.8 5.5 Source: Datastream and International Financial Statistics. Note: Data reported in national currency is converted to current U.S. dollars using average monthly nominal exchange rates. Series are deflated using the U.S. CPI index and deseasoned using country speciffic time dumies. 6 3nd QUARTER 2010 TRADE WATCH Table 2: Quarter-to-Quarter Import Growth Continued (Percentage Change in Constant U.S. Dollars ­ Seasonally Adjusted) 2008 2009 2010 1st 2nd 3rd 4th 1st 2nd 3rd 4th 1st 2nd 3rd Lithuania 27.5 2.5 5.6 28.6 23.3 7.9 13.9 0.9 4.3 0.6 13.4 Luxembourg 7.0 9.2 6.9 26.0 16.6 0.9 17.2 6.3 4.5 7.6 2.2 Malaysia 2.7 2.3 0.4 18.7 21.2 7.8 12.1 13.8 2.4 11.3 1.6 Malta 0.3 3.2 7.8 34.4 2.9 6.1 23.9 13.4 10.7 11.3 42.2 Mexico 2.8 0.1 2.4 18.8 16.7 4.5 12.6 2.9 9.8 6.4 4.3 Netherlands 9.7 2.9 4.3 21.2 14.8 0.7 9.9 3.7 1.3 1.5 0.1 New Zealand 2.4 4.5 5.2 20.7 21.7 11.1 7.1 2.6 0.1 6.8 1.1 Norway 3.4 4.7 5.9 21.9 13.5 1.7 12.0 5.4 1.3 2.8 2.2 Pakistan 29.6 4.7 14.4 12.5 7.9 9.4 3.0 7.3 15.7 2.4 0.4 Peru 18.0 14.4 2.4 17.0 20.4 6.2 8.3 8.9 12.8 1.6 16.8 Philippines 2.4 8.4 1.9 24.9 7.6 0.0 1.8 2.2 19.3 3.4 2.2 Poland 13.0 2.2 3.2 23.9 18.9 0.2 13.1 2.8 2.4 4.4 3.6 Portugal 8.9 0.9 0.6 21.7 11.6 2.1 19.9 2.5 4.9 0.6 0.1 Romania 7.6 4.0 1.5 30.2 22.3 1.4 14.8 4.0 1.5 2.5 0.5 Russian Federation 13.9 13.3 9.0 16.1 17.8 4.0 11.5 13.0 8.8 19.5 17.8 Singapore 9.7 3.3 1.1 22.3 16.7 1.2 11.8 5.1 7.5 3.5 2.5 Slovakia 10.3 4.5 9.2 21.5 11.9 5.6 12.5 6.0 4.1 3.8 9.4 Slovenia 7.9 3.0 1.8 23.5 17.8 0.9 13.4 1.5 2.5 0.7 4.5 South Africa 0.7 1.7 7.9 31.0 13.1 13.1 14.2 13.9 0.7 2.2 11.6 Spain 5.3 3.6 3.9 24.2 17.4 4.8 16.9 2.0 3.4 2.2 3.9 Sweden 9.2 4.3 10.5 28.1 13.5 1.3 14.7 4.3 5.6 5.6 4.6 Switzerland 7.9 5.8 3.5 17.3 2.5 1.5 10.9 2.1 3.8 4.3 7.6 Taiwan, Province of China 5.0 1.5 6.5 31.7 30.5 15.9 21.9 10.3 7.3 5.6 5.6 Thailand 11.7 4.2 10.2 16.1 33.0 4.9 19.8 12.1 2.6 2.2 8.7 Turkey 5.2 4.0 3.3 32.2 17.4 0.5 16.1 4.2 7.8 3.6 7.5 Ukraine 18.7 20.9 8.2 30.8 22.4 0.8 19.0 13.1 0.9 14.2 17.6 United Kingdom 0.9 0.8 4.7 20.3 15.8 3.2 8.7 5.6 1.6 0.3 6.8 United States 1.1 1.1 0.6 16.0 19.7 2.9 9.6 5.0 3.3 6.6 3.6 Uruguay 38.9 43.0 26.8 15.8 21.6 15.5 0.3 3.7 0.1 24.6 10.8 Venezuela 16.1 10.8 2.4 14.0 12.4 17.2 5.7 28.5 11.5 10.2 6.3 Viet Nam 26.7 3.6 17.2 15.0 6.8 16.1 9.9 12.0 3.1 1.8 4.0 Average 7.7 3.5 0.6 20.8 17.4 0.9 11.4 3.6 2.5 2.8 5.5 Source: Datastream and International Financial Statistics. Note: Data reported in national currency is converted to current U.S. dollars using average monthly nominal exchange rates. Series are deflated using the U.S. CPI index and deseasoned using country speciffic time dumies. 7 Table 3: Growth from Q3 2008 to Q3 2010 (Percentage Change in Constant U.S. Dollars ­ Seasonally Adjusted) Exports Imports Exports Imports Argentina 12.5 5.4 Pakistan 1.8 4.0 Australia 10.7 4.3 Peru 6.2 2.1 Belgium 12.0 27.3 Philippines 14.1 18.8 Brazil 7.7 0.9 Poland 15.9 27.3 Bulgaria 8.4 43.1 Portugal 7.1 17.9 Canada 27.9 10.9 Romania 6.4 36.6 Chile 4.4 24.9 Russian Federation 31.7 38.5 China 13.1 25.9 Singapore 0.3 12.2 Colombia 11.4 1.5 Slovakia 15.4 14.7 Croatia 20.1 32.0 Slovenia 2.6 26.5 Cyprus 8.4 36.2 South Africa 3.3 26.5 Czech Republic 13.4 13.5 Spain 8.4 30.2 Denmark 16.0 26.7 Sweden 10.2 12.1 Ecuador 30.3 0.2 Switzerland 6.6 4.7 Egypt 22.4 7.2 Taiwan, Province of China 5.1 11.7 Estonia 16.2 33.2 Thailand 4.6 13.7 Finland 32.3 36.9 Turkey 31.4 18.3 France 8.3 13.3 Ukraine 23.6 3.0 Germany 10.7 15.5 United Kingdom 15.5 16.7 Greece 31.9 56.3 United States 7.8 14.1 Hong Kong 23.4 21.2 Uruguay 18.8 18.0 Hungary 5.3 19.8 Venezuela 65.9 42.1 Iceland 31.3 52.6 Viet Nam 13.9 16.3 India 12.6 18.7 Indonesia 6.1 1.7 Ireland 5.8 39.0 Israel 15.2 39.8 Italy 42.1 6.2 Japan 8.3 17.8 Kazakhstan 57.7 48.7 Korea, Republic of 4.5 21.9 Latvia 6.6 39.2 Lithuania 24.1 32.0 Luxembourg 14.1 23.4 Malaysia 10.5 1.9 Malta 26.1 10.4 Mexico 4.1 8.9 Netherlands 17.0 20.8 New Zealand 6.6 18.2 Norway 46.2 16.6 Average 8.8 16.9 Source: Datastream and International Financial Statistics. Note: Data reported in national currency is converted to current U.S. dollars using average monthly nominal exchange rates. Series are deflated using the U.S. CPI index and deseasoned using country speciffic time dumies. 3nd QUARTER 2010 TRADE WATCH Table 4: U.S. Import Growth by Industry (Percentage Change in U.S. Dollars relative to the Same Quarter of the Previous Year) 2008 2009 2010 Q3 2010 rel Industry Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 to Q3 2008 Animal & Animal Products -0.42 -1.85 -8.04 -7.50 -15.23 -13.06 -1.21 12.55 20.75 2.37 Vegetable Products 24.08 11.94 -6.36 -13.20 -13.94 -7.49 5.95 15.36 13.64 -2.20 Foodstuffs 12.98 3.18 -5.00 -8.63 -11.33 -3.21 10.58 9.60 12.19 -0.52 Mineral Products 57.57 -13.36 -51.40 -54.02 -48.72 -14.24 55.44 45.48 20.11 -38.41 Chemicals & Allied Industries 23.82 8.19 -13.32 -17.79 -17.08 -3.31 11.14 18.41 14.42 -5.12 Plastics / Rubbers 8.73 0.69 -22.48 -27.00 -23.31 -14.27 20.19 37.57 33.54 2.42 Raw Hides, Raw Hides, Leather & Furs 1.27 -5.09 -14.64 -22.91 -27.33 -16.65 4.23 23.75 37.31 -0.21 Wood & Wood Products -8.86 -13.94 -26.51 -30.12 -27.08 -17.67 5.33 19.41 17.20 -14.54 Textiles -2.52 -4.83 -13.27 -16.37 -14.36 -8.74 4.45 17.87 18.93 1.85 Footwear / Headgear 3.05 0.98 -7.31 -13.98 -13.67 -8.08 2.36 20.61 29.64 11.92 Stone / Glass 6.05 -19.58 -36.80 -31.86 -25.78 9.27 38.02 41.84 30.10 -3.43 Metals 16.33 4.40 -26.57 -50.20 -51.83 -36.26 2.23 54.94 48.29 -28.57 Machinery / Electrical 4.25 -11.04 -22.35 -24.24 -19.14 0.24 15.53 27.59 25.65 1.60 Transportation -10.33 -23.18 -46.68 -46.07 -24.16 -0.58 44.25 61.07 30.65 -0.92 Miscellaneous 1.36 -6.11 -18.38 -22.45 -16.22 -9.16 11.34 21.28 19.48 0.10 Total 14.56 -9.03 -29.88 -34.32 -28.87 -7.88 21.40 31.64 22.99 -12.51 Source: U.S.I.T.C. and authors' calculations. Table 5: Japan's Import Growth by Industry (Percentage change in Japanese Yen relative to the Same Quarter of the Previous Year) 2008 2009 2010 Q3 2010 rel Industry Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 to Q3 2008 Animal & Animal Products 8.89 -2.69 -15.75 -18.17 -24.85 -20.24 -5.37 3.29 13.52 -14.69 Vegetable Products 32.26 3.80 -27.25 -32.01 -36.08 -27.33 2.82 3.38 1.34 -35.22 Foodstuffs -3.71 -7.68 -7.86 -12.55 -11.63 -10.12 -1.77 7.67 11.92 -1.09 Mineral Products 59.13 -5.93 -47.90 -54.84 -54.19 -29.45 31.71 45.78 15.60 -47.04 Chemicals & Allied Industries 13.18 -1.55 -21.05 -22.02 -18.48 -8.95 21.25 21.46 12.49 -8.30 Plastics / Rubbers 11.46 1.49 -31.59 -37.42 -33.84 -24.58 20.51 46.50 31.41 -13.05 Raw Hides, Raw Hides, Leather & Furs -8.04 -17.81 -16.16 -23.52 -20.65 -15.14 -9.42 6.18 4.56 -17.03 Wood & Wood Products -1.62 -4.31 -17.87 -25.33 -28.87 -20.28 2.48 15.65 12.23 -20.17 Textiles -1.52 -4.19 -6.72 -11.62 -14.42 -12.54 -7.94 2.45 -3.24 -17.19 Footwear / Headgear 2.25 -2.45 -5.81 -6.77 -13.56 -18.94 -8.49 2.06 0.79 -12.88 Stone / Glass 6.63 -19.09 -47.89 -48.59 -43.74 -26.33 30.57 29.72 22.47 -31.10 Metals 4.70 -10.56 -47.95 -64.33 -56.51 -37.28 25.11 89.85 43.15 -37.75 Machinery / Electrical -3.59 -17.91 -37.26 -29.54 -26.86 -12.09 24.60 24.80 19.41 -12.66 Transportation 5.52 -32.51 -43.37 -45.80 -42.78 1.04 0.26 33.35 19.95 -31.37 Miscellaneous -4.33 -14.57 -30.03 -26.06 -23.51 -13.28 15.81 9.19 3.58 -20.78 Total 21.30 -9.63 -37.07 -40.38 -39.93 -21.07 19.12 28.55 14.93 -30.96 Source: Ministry of Finance, Japan, and authors' calculations. 9 Figure 1: Quarterly Export Growth* by Region 20 Previous Current 15 10 5 0 SAS ECA EAP NOA LCR EUR 5 10 Source: Datastream, U.S. Commerce Department, U.S. Bureau of Labor Statistics and authors' calculations. Seasonally adjusted growth from the 2nd quarter of 2010 to the 3rd quarter of 2010 in "Current" and from the 1st quarter of 2010 to the 2nd quarter of 2010 in "Previous"; *Seasonally adjusted using time-region fixed effects and deflated using U.S. consumer price index. Figure 2: Quarterly Import Growth* by Region 20 Previous 15 Current 10 5 0 SAS EAP NOA EUR LCR ECA 5 10 Source: Datastream, U.S. Commerce Department, U.S. Bureau of Labor Statistics and authors' calculations. Seasonally adjusted growth from the 2nd quarter of 2010 to the 3rd quarter of 2010 in "Current" and from the 1st quarter of 2010 to the 2nd quarter of 2010 in "Previous"; *Seasonally adjusted using time-region fixed effects and deflated using U.S. consumer price index. Seasonally adjusted growth from the 2nd quarter of 2010 to the 3rd quarter of 2010 in "Current" and from the 1st quarter of 2010 to the 2nd quarter of 2010 in "Previous"; *Seasonally adjusted using time-region fixed effects and deflated 11 Source: Datastream, U.S. Commerce Department, U.S. Bureau of Labor Statistics and authors' calculations. Seasonally adjusted growth from the 2nd quarter of 2010 to the 3rd quarter of 2010 in "Current" and from the 1st quarter Cyprus Malta Chile Russian Federation Latvia Ukraine Philippines Peru South Africa Colombia Bulgaria Latvia Source: Datastream, U.S. Commerce Department, U.S. Bureau of Labor Statistics and authors' calculations. Italy Egypt Estonia Iceland of 2010 to the 2nd quarter of 2010 in "Previous"; *Seasonally adjusted using time-region fixed effects and Iceland Lithuania Spain Estonia Czech Republic Ecuador Portugal Czech Republic France South Africa United Kingdom Croatia Figure 4: Quarterly Import Growth by Country Figure 3: Quarterly Export Growth by Country Sweden Slovakia Lithuania Italy Switzerland Argentina Luxembourg Thailand 3nd QUARTER 2010 TRADE WATCH Ireland Hungary Slovenia Brazil Romania Switzerland Hungary Turkey Germany Finland Ukraine United Kingdom Belgium France Japan Venezuela Denmark Taiwan, Province of China China Denmark United States Sweden Current Current Netherlands Slovenia Peru Germany Viet Nam Mexico Slovakia Japan Previous Previous Mexico Viet Nam Australia Spain Finland Canada Singapore Chile Brazil Poland Hong Kong United States Korea, Republic of Australia Argentina India Pakistan Cyprus Taiwan, Province of China Singapore deflated using U.S. consumer price index. Poland China New Zealand Norway Indonesia Korea, Republic of India Hong Kong Canada Belgium using U.S. consumer price index. Egypt Malaysia Thailand New Zealand Malaysia Romania Turkey Pakistan Russian Federation Indonesia Croatia Portugal Norway Netherlands Greece Bulgaria Colombia Philippines Ecuador Luxembourg Uruguay Ireland Israel Greece Venezuela Israel Malta Uruguay Kazakhstan Kazakhstan 5 0 5 5 25 20 15 10 10 15 20 25 5 25 15 15 25 35 3nd QUARTER 2010 TRADE WATCH Figure 5: Month-Over-Month Trade Growth, Now and Then 30 20 10 0 1200 1600 2000 2400 2800 3200 3600 4000 4400 4800 4800 4400 4000 3600 3200 2800 2400 2000 1600 1200 800 400 400 800 0 10 20 Series1 30 Past Mean 40 Past Median 50 Source: Datastream, I.M.F., U.S. Commerce Department, U.S. Bureau of Labor Statistics and author's calculations. Data in US dollars deflated using U.S. consumer price index for a balanced sample of 40 countries. Figure 6: Natural Logarithm of World Imports 28.9 28.4 27.9 27.4 26.9 26.4 2000m1 2000m5 2000m9 2001m1 2001m5 2001m9 2002m1 2002m5 2002m9 2003m1 2003m5 2003m9 2004m1 2004m5 2004m9 2005m1 2005m5 2005m9 2006m1 2006m5 2006m9 2007m1 2007m5 2007m9 2008m1 2008m5 2008m9 2009m1 2009m5 2009m9 2010m1 2010m5 2010m9 Source: Datastream, Bloomberg, U.S. Commerce Department and authors' calculations using a balanced sample of 63 economies reporting data. Imports are in current US dollars. 12