The Transformation of World Trade: Changing Patterns of Import Demand and Australia's Response
This report examines changes in the composition of world trade and in imports in three major markets (Japan, the United States and Korea). It concludes that manufactures and services trade remained the fastest growing sectors of world trade in the 1990s, although agriculture has grown faster than in the 1980s. The report highlights the role of successive multilateral trade rounds in the expansion of manufactures trade since the Second World War, along with rising incomes, technological change, and the expansion of cross-border investment.The report points out that Australia's own exports have continued to diversify over the 1990s, with rapid growth in elaborately transformed manufactures and services. Trade liberalisation in Australia has contributed to diversification. As a result of continued diversification, Australia's exports are now divided between the four bases of agriculture, minerals, manufactures and services.
The report finds that manufactures was the most dynamic import sector in Japan (up to its 1998 recession) and in the United States, while services grew most rapidly in Korea up to its economic crisis. It argues that, given Australia's export specialisation, changes in the composition of imports into Japan and the United States had adverse consequences for our market share in these countries in the first part of the 1990s. However, the report finds that Australia again built market share in each of the three markets studied over the past 3-4 years.