Written Report

International Trade

By:
Benedicto, Patrick M.
Camagon, Marya Abigaile
Marasigan, Catrina L.
Marasigan, Mikee Angeline R.
Orlina, Abegail
Punzalan, Maica M.
Villanueva Eugene Mark B.
BSA – 5201

Mrs. Teodorica G. Ani

 International trade is the exchange of capital, goods, and services across
international borders or territories. It gives support to economy and let the
economy to stand on its own. Trading-partners reap mutual gains when each
nation specializes in goods for which it holds a comparative advantage and then
engages in trade for other products.
Each nation should produce goods for which its domestic opportunity costs are
lower than the domestic opportunity costs of other nations and exchange those
goods for products that have higher domestic opportunity costs compared to
other nations.
Benefits of trade include lower prices and better products for consumers,
improved political ties among nations, and efficiency gains for domestic
producers.

Objective

The main objective of this is to gather necessary information about

international trade. To help to explain clearly the concept of international trade
using actual information. It also aims to determine the position of the Philippines
in the international trade, its products and its significant contribution in such
trade. To identify relevant news and events that affects the international trade
locally and worldwide.

Content

It can be seen that Philippines imports more than the value of its exports
since then. Both imports and exports have its lowest in the end of 2018 and this
last February of 2020. This is due to the shipment restrictions because of the
COVID-19. It results to its balance of trade to be negative. However, it does not
always mean that the country is a loser when it comes to international trade
because international trade goes beyond than just that of supply and demand. It
is also about the benefits that the country is able to derive from such trade.
The majority of the Philippine export is composed of manufactured goods,
which represents more than 80% of the country’s total export for more than three
years. Almost two-thirds of these manufactured goods are electronic products
such as semiconductors, electronic data processing, automotive electronics etc.
Manufactured goods is followed by mineral products like gold and copper
concentrates which accounts for about 5-6% annual exports of the Philippines.
Agro-based products also tops as Philippine export and one of its highlight is the
Banana in which the country is known as its top exporter.
Raw materials and other intermediate goods are the most imported
products of the Philippines as shown in the presented data since 2018 up to this
February of 2020, which is about more than 30 percent of the Philippines’ total
imports. This consists of unprocessed raw materials, semi-processed raw
materials and of manufactured goods. Capital goods is also one of the major
imports of the Philippines, which includes Power Generating and Specialized
Machines, Office and EDP Machines, Telecommunication equipment and the
like.
Asia Pacific Economic Cooperation (APEC) is the largest economic bloc
where the Philippines trades products. Almost more than 80% of the Philippines’
import comes from this economic bloc, same with the export. This 'includes
Australia, Brunei Darussalam, Canada, Chile, China, Taiwan, Hong Kong,
Indonesia, Japan, S. Korea, Malaysia, Mexico, New Zealand, Papua New
Guinea, Peru, Russia, Singapore, Thailand, Vietnam, United States of America.
Some of these countries are the top countries where the Philippine export goes
and imports coming from. It is also obvious that the percentage share of the
economic blocs in the Philippine import/export does not sum up to a hundred
percent. This is because some of the top countries are member of different
economic blocs such as China, Hong Kong and Japan, which is in the bloc of
APEC and East Asia.

HIGHLIGHTS OF THE PHILIPPINE EXPORT AND IMPORT STATISTICS

February 2020
Date of Release: 08 April 2020
Reference No. 2020 – 065

A. TOTAL EXTERNAL TRADE AND BALANCE OF TRADE

Total external trade decreases by 5.9 percent
The country’s total external trade in goods in February 2020 amounted to
USD12.46 billion, a decline of 5.9 percent from the USD13.24 billion external
trade in the same month of the previous year.  Of the total external trade,
USD5.40 billion (43.4%) were exported goods and USD7.06 billion (56.6%) were
imported goods.
The country’s balance of trade in goods (BoT-G) in February 2020 posted
a USD1.66 billion deficit, which was lower by 39.4 percent than the USD2.73
billion deficit in February 2019. 

TABLE A. Top 10 Philippine Exports to All Trading Partners

February 2020p
Year-on-Year Growth in Percent
Gainers Losers
 Annual Annual
Growth Growth
Major Commodity Group Major Commodity Group
Rate, Rate,
% %
Other Manufactured 45.0  -25.4
Goods Cathodes and Sections 
of Cathodes, of Refined
Copper

Bananas (Fresh) 29.6 Metal Components  -11.7 

Other Mineral Products 13.2  -2.5 
Ignition Wiring Set and
Other Wiring Sets Used
in Vehicles, Aircrafts and
Ships

Machinery and Transport

11.7    
Equipment

Gold 6.0     
Electronic Products 3.4     
p – preliminary

B. EXPORTS
Exports increase by 2.8 percent
The country’s total export sales in February 2020 was USD5.40 billion, an
increase of 2.8 percent from the USD5.25 billion total export sales in February
2019. (Figure 1)
Largely contributing to the uptrend in February 2020 were six of the top 10 major
export commodities, namely, other manufactured goods (45.0%); banana
(fresh) (29.6%); other mineral products (13.2%); machinery and transport
equipment (11.7%); gold (6.0%);  and electronic products (3.4%).
Exports of electronic products comprise more than half of the total exports
By commodity group, exports of electronic products continued   to   be   the  
country’s top   export with total earnings of USD2.93 billion.  This amount, which
accounted for 54.2 percent of the total exports in February 2020, expanded by
3.4 percent, from USD2.83 billion in February 2019.

Manufactured goods has the highest share to exports among major types of
goods
By major type of goods, exports of manufactured goods accounted for the
highest share of USD4.39 billion (81.4%) to the total exports in February 2020. 
This type of goods went up by 1.3 percent, from its level a year ago of USD4.34
billion.

Japan contributes the highest export value

By major trading partner, exports to Japan comprised the highest value
amounting to USD929.00 million (17.2%) during the month.  Exports to this
country grew by 11.3 percent, from USD834.77 million in February 2019.
Other major export trading partners were United States of America (USA) with
export value of USD871.05 million; Hong Kong, USD662.07 million; People’s
Republic of China, USD584.44 million; and Singapore, USD313.01 million.
TABLE B.  Top 10 Philippine Imports from All Trading Partners
February 2020p

Year-on-Year Growth in Percent

Major Commodity Group Annual Growth Rate, %

Cereals and Cereal Preparations - 28.2

Industrial Machinery and Equipment - 24.7

Transport Equipment - 17.6

Telecommunication Equipment and

- 16.9
Electrical Machinery

Mineral Fuels, Lubricants and Related

- 12.0
Materials
Other Food and Live Animals - 9.0
Plastics in Primary and Non-Primary
- 7.5
Forms
Iron and Steel - 4.0
Electronic Products - 2.4

Miscellaneous Manufactured Articles - 0.4

p - preliminary

C. IMPORTS
Imports decrease by 11.6 percent
Total imported goods in February 2020 amounted to USD7.06 billion, indicating a
drop of 11.6 percent, from the imported goods during the same month of the
previous year amounting to USD7.98 billion. (Figure 1)
The decrement was due to the decreases in the top 10 major import commodities
led by cereals and cereal preparations (28.2%);
industrial machinery and equipment (24.7%); and transport equipment  (17.6%). 

Electronic products account for the highest import value

Among the imported commodity groups, import of electronic products, valued at
about USD2.00 billion, contributed the highest share of 28.3 percent to the total
imports.  Import of this commodity group, however, declined by 2.4 percent in
February 2020, from USD2.05 billion in February 2019. 
Imports of raw materials and intermediate goods contribute the highest
By major type of goods, imports of raw materials and intermediate
goods accounted for the largest share of USD2.66 billion (37.7%) in February
2020.  This type of goods, however, dropped by 8.7 percent, from USD2.91
billion in February 2019.
Imports of capital goods, which shared 32.7 percent or an import value of
USD2.31 billion, ranked second. Consumer goods placed third with a share of
16.9 percent or an import value of USD1.19 billion. 

People’s Republic of China has the highest import value

The People’s Republic of China was the country’s biggest supplier of imported
goods with 12.9 percent share to the total imports in February 2020.  Import
value from this country amounted to USD908.79 million during the month, from
USD1, 618.02 million in February 2019.
Other major import trading partners were Japan with import value of USD799.23
million; Republic of Korea, USD627.39 million; USA, USD615.68 million;
and Thailand, USD528.25 million.

World Trade ( Other Countries)

Overall trade growth of 3.0 percent in 2018 was significantly lower than the 4.6
percent growth recorded in 2017. This strong growth had suggested a return to
the stronger pace of trade expansion that characterized the late 1990s and early
2000s but this was not sustained in 2018. Trade only grew slightly more than
output in 2018 after being 1.6 times higher in 2017. However, trade growth
remained above the 2.6 percent average rate since 2008.
The slowdown in the growth of merchandise trade volume in 2018 was broad-
based, reflecting weaker import and export shipments globally. On the export
side, the slowdown was mostly due to reduced shipments from developed
countries, which contracted year on- year in three out of the four quarters of
2018. On the import side, developed countries recorded slow growth throughout
the year, particularly in the first half. Meanwhile, developing economies and the
Commonwealth of Independent States (CIS) saw imports fall 2.1 percent in the
final quarter of 2018 despite stronger growth earlier in the year.
In the first half of 2019, a number of leading economic indicators and trade
statistics suggest continued weakness in trade and output. Year-on-year growth
in monthly merchandise exports and imports remained depressed up to March.
During the first quarter, the dollar value of exports from the United States, the
European Union and Japan were down 1 percent, 7 percent and 7 percent
respectively. China’s exports were up 14 percent over the previous year but the
increase was mostly due to a weak performance in March 2018. Imports also
stalled, with no growth (0 percent) in the United States and declines of 2 percent,
4 percent and 8 percent in the European Union, Japan and China respectively.
Part of the decline may be due to lower oil prices in 2019 compared with 2018.

Merchandise Trade

The value of merchandise trade increased by 10% in 2018. The increase

in exports was mostly driven by high energy prices while Asia was the main
contributor to an increase in global imports. It was reported that developing
economies exported a total of US$ 8,779 billion in 2018, of which US$ 193 billion
were from least-developed countries.
World merchandise exports increased on average by 1.8 percent per year from
2008 to 2018 but exports of fuels and mining products decreased by 0.9 percent
per year. In 2018, world exports of fuels and mining products stood at 91 percent
of their value in 2008. This is due to a combination of weaker demand and
increased supply leading to a decline in fuel prices, which, in 2018, were 33
percent below the level of 2008.
Agricultural products saw the biggest increase, growing by 3.1 percent per year
and rising by 36 percent compared to 2008. Exports of manufactured goods have
risen by 26 percent in comparison to 2008. Manufactured goods increased from
66 percent of world trade in 2008 to a 68 percent share in 2018 but fuels and
mining products declined from a 22 percent share to 19 percent. The share of
agricultural products grew from 8 percent to 10 percent.
Since 2016, world exports of all major product groups have shown growth: fuels
and mining products have increased by 23 percent since 2017, manufactured
goods by 8 percent and agricultural products by 5 percent. Total merchandise
exports have seen growth of 10 percent since 2017.

Leading Players in Merchandise Trade

The ten leading merchandise traders remained unchanged in 2018, with China,
the United States and Germany leading the way. Collectively, the top ten
economies represented 53.3 percent of world trade. The top five leading
economies accounted for 38.1 percent of total trade, economies from fifth to
tenth place accounting for 15 percent.
For the second year in a row, China remained the leading merchandise trader
despite growing global trade tensions. With a share of 13 percent of total exports
and 11 percent of total imports, China’s exports stood at US$ 2.49 trillion and its
imports at US$ 2.14 trillion in 2018, growing at the fastest pace since 2012. An
increase in the import/export of electronic integrated circuits, computer parts and
crude oil contributed to China’s overall export growth. China’s trade surplus
contracted for a third consecutive year, ending the year 16 percent lower than its
2017 level.
Over the past ten years, China has shifted its exports to products with higher
added value. Exports of mobile phones and parts rose from 6 percent to 10
percent of total exports. With exports growing at an average annual rate of 6.1
percent, China has moved up from the second-largest exporter in 2008 (behind
the United States) to the largest exporter in 2018.
The United States maintained its position as the top importer of merchandise
trade. US imports totaled US$ 2.61 trillion in 2018, increasing by 8.5 percent.
This reflected continued momentum in private consumption and fixed investment.
Exports totaled US$ 1.66 trillion, up 8 percent. The increase in shale oil
production coupled with higher oil prices and increases in orders of civil aircraft
and corn (+35 percent) contributed to the rise.
Germany maintained its position as the third-largest trader, with merchandise
exports totaling US$ 1.56 trillion, 8 percent higher than the previous year. This
was marked by steady growth for auto-parts and pharmaceutical products.
The Netherlands was the most dynamic exporter, increasing its exports by 11
percent in 2018. This was mostly due to increases in the value of fuel exports
and medication (+30%). Over the past ten years, exports of medicines have
grown from 1 percent to 3 percent of total exports.
Japan remained the fourth-largest trader, with exports growing by 6 percent in
2018, totaling US$ 94.5 billion. The slowdown in exports of non-electrical
machinery and parts of electronic circuits contributed to a 2 percent decline in
year-on-year terms. As a net importer of petroleum, the increase in oil prices
contributed to a rise in imports of 10 percent in 2018. After two consecutive years
of trade surplus, Japan recorded a trade deficit of US$ 10.3 billion.
Overtaking Hong Kong (China), France became the sixth largest trader. Exports
of transport equipment, specifically automobiles and civil aviation parts,
contributed to 8 percent growth in 2018. Due to a decline in exports of precious
metals and gold to China, the exports of Hong Kong (China) grew by 3 percent,
the lowest increase among the Asian economies.
The United Kingdom was the second most dynamic trader among the top ten in
2018, recording growth of 10 percent. Exports totaled US$ 519.3 billion, with
“other machinery” being the most buoyant product group, according to
preliminary estimates. The UK’s trade deficit narrowed in 2018, with imports
growing by 5 percent, mostly due to an increase in office and telecom equipment.
The United Kingdom remained the tenth-largest exporter and the eighth largest
importer.
Exports of the Republic of Korea grew by only 5 percent in 2018, down from 15
percent in 2017, due to a decline in exports of integrated circuits and parts.
Despite this result, the Republic of Korea remained the ninth-largest trader, with
exports totaling US$ 604.9 billion. Imports totaled US$ 535.2 billion, increasing
by 8 percent, down from 16 percent the previous year. This was mostly due to a
decline in the value of imports of other machinery. Italy, in tenth position, saw
export growth of 8 percent, lower than in 2017, mostly due to a contraction in
exports of motor cars and air and vacuum pumps. Growth in imports remained at
11 percent. India overtook Italy as the tenth-largest importer.

Leading exporters in world merchandise trade, 2018

(Billion dollars and percentage)

Annual
Rank Exporters Value Share Percentage
Change
1 China 2,187 12.8 10
2 United States 1,664 8.5 8
3 Germany 1,561 8 8
4 Japan 738 3.8 6
5 Netherlands 723 3.7 11
6 Korea 605 3.1 5
7 France 582 3 9
8 Hong Kong, China 569 2.9 3
9 Italy 547 2.8 8
10 United Kingdom 486 2.5 10
11 Belgium 467 2.4 8
12 Mexico 451 2.3 10
13 Canada 450 2.3 7
14 Russian Federation 444 2.3 26
15 Singapore 413 2.1 11
16 United Arab Emirates 346 1.8 10
17 Spain 345 1.8 8
18 Chinese Taipei 336 1.7 6
19 India 326 1.7 9
20 Switzerland 311 1.6 4
21 Saudi Arabia 299 1.5 35
22 Poland 261 1.3 11
23 Australia 257 1.3 11
24 Thailand 252 1.3 7
25 Malaysia 247 1.3 14
26 Vietnam 246 1.3 15
27 Brazil 240 1.2 10
28 Czech Republic 202 1 11
29 Austria 185 0.9 10
30 Indonesia 180 0.9 7
31 Turkey 18 0.9 7
32 Sweden 166 0.8 8
33 Ireland 165 0.8 20
34 Hungary 126 0.6 11
35 Norway 123 0.6 18
36 Denmark 109 0.6 6
37 Iran 108 0.6 16
38 Slovak Republic 94 0.5 12
39 South Africa 94 0.5 6
40 Iraq 89 0.5 41
41 Qatar 86 0.4 28
42 Romania 80 0.4 13
43 Finland 76 0.4 12
44 Chile 75 0.4 9
45 Kuwait 72 0.4 30
46 Portugal 68 0.4 10
47 Philippines 67 0.3 -2
48 Argentina 62 0.3 5
49 Kazakhstan 61 0.3 26
50 Nigeria 61 0.3 36

Leading importers in world merchandise trade, 2018

(Billion dollars and percentage)

Annual
Rank Importers Value Share Percentage
Change
1 United States 2,614 13.2 9
2 China 2,136 10.8 16
3 Germany 1,286 6.5 11
4 Japan 74 3.8 11
5 United Kingdom 647 3.4 5
6 France 673 3.4 9
7 Netherlands 646 3.3 12
8 Hong Kong, China 628 3.2 6
9 Korea 535 2.7 12
10 India 511 2.6 14
11 Italy 501 2.5 11
12 Mexico 477 2.4 10
13 Canada 469 2.4 6
14 Belgium 450 2.3 10
15 Spain 388 2 10
16 Singapore 371 1.9 13
17 Chinese Taipei 286 1.4 10
18 Switzerland 279 1.4 4
19 Poland 267 1.3 14
20 United Arab Emirates 253 1.3 -6
21 Thailand 250 1.3 13
22 Russian Federation 249 1.3 5
23 Vietnam 244 1.2 15
24 Australia 236 1.2 3
25 Turkey 223 1.1 -5
26 Malaysia 217 1.1 12
27 Austria 193 1 10
28 Brazil 189 0.9 20
29 Indonesia 189 0.9 20
30 Czech Republic 184 0.9 13
31 Sweden 170 0.9 10
32 Saudi Arabia 135 0.7 0
33 Hungary 121 0.6 13
34 Philippines 115 0.6 13
35 South Africa 114 0.6 12
36 Ireland 106 0.5 19
37 Denmark 102 0.5 10
38 Romania 98 0.5 14
39 Slovak Republic 94 0.5 13
40 Portugal 89 0.4 13
41 Israel 88 0.4 22
42 Norway 88 0.4 6
43 Finland 78 0.4 11
44 Chile 74 0.4 14
45 Egypt 72 0.4 17
46 Argentina 65 0.3 -2
47 Greece 65 0.3 15
48 Bangladesh 62 0.3 16
49 Pakistan 60 0.3 5
50 Ukraine 57 0.3 15

Commercial Services Trade

Information and communication technology recorded the highest export growth

(15 percent) among services sectors in 2018, led by computer services.
Growth in exports of commercial services was highest in the Commonwealth of
Independent States (12 percent) in 2018. China was the leading exporter of
commercial services (by value) among developing countries, with exports
increasing by 17% in 2018.
As shown from the graph, transport services increased by 7% in 2018 which
totaled over US$ 1 trillion while, travel exports continued its upward trend for the
past two years, growing 7% in 2018 on the other hand, other commercial
services increased by 8% in 2018, rising to over US $3.1 trillion then, goods-
related services increased by 9% in 2018.
Leading Players in Commercial Services

In global services trade, the ten leading traders remained unchanged in 2018,
with the same countries retaining their ranking as the top exporters and
importers. In the last ten years, however, the composition of leading services
traders has changed profoundly.
Since 2008, China has jumped from the seventh-largest to the second-largest
services trader. India and Singapore have moved into ninth and tenth positions,
overtaking Italy and Spain.
Among developed economies, Ireland has risen from tenth to seventh place,
thanks to the rapid growth in exports of computer services. Overall, the top ten
economies represented 53.2 percent of world trade in 2018.
The United States remained the world’s leading trader of commercial services in
2018, with a share of 14 percent in world services exports and 9.8 percent in
imports, totaling US$ 808.2 billion in exports and US$ 536.2 billion in imports.
Over the past ten years, US exports grew by 5 percent annually, faster than
imports (3 percent). Its trade surplus doubled from US$ 13.4 billion in 2008 to
US$ 27.2 billion in 2018. Travel and other business services increased their
shares in both exports and imports while the contribution of transport declined.
Services related to intellectual property remains a key sector for the United
States, with a 16.1 percent share of total US exports and 10.0 percent of imports.
The United Kingdom’s services exports increased by 6 percent in 2018. Services
growth over the past ten years was boosted by “other business services”, the
United Kingdom’s leading sector, accounting for 29 percent of the country’s
services exports in 2018. In contrast, financial services, the second-largest
traded sector, has lost 6 percent in its total share since 2008. In 2018, the UK
was the second largest services exporter and the fifth-largest importer.
Germany remained the third-largest exporter and importer of commercial
services globally in 2018. All services categories recorded robust growth, except
for exports of personal, cultural, and recreational services. This includes audio-
visuals and related activities, which contracted by 34 percent.
France maintained its position as the fifth-largest trader in both services exports
and imports. As the number one global destination in terms of international tourist
arrivals, France’s travel earnings continued to rise after the 2016 decline due to
terrorist attacks. As in other EU member states, “other business services”
became a key sector, representing almost one-third of France’s exports.
China’s exports recorded the strongest export growth (17 percent) among the top
ten economies in 2018 and remained the world’s fifth-largest services exporter.
Information and communication technology services, largely computer services,
expanded by 69 percent in 2018, exceeding the export value of transport and
travel. China confirmed its ranking as the second largest importer of commercial
services, with an increased share of world imports (9.5 percent). This was mostly
thanks to its high travel expenditure abroad, which accounts for more than half of
its services payments.
In 2018, the Netherlands recorded the third-strongest growth among leading
traders in exports and imports of services. In both cases, it was due to other
business services and charges for the use of intellectual property, which
accounts for about one-third and one-quarter respectively of the Netherlands’
trade in commercial services. Other business services became one of the fastest
growing import sectors between 2008 and 2018 and is the most important
category in both exports and imports. The Netherlands remained the sixth-largest
services exporter and slipped one position behind the United Kingdom on the
import side.
Ireland recorded the second-best exports performance among leading traders in
2018 (a 14 percent increase) mostly due to rising exports of computer services.
The country maintained its seventh position as services trader. Computer
services form half of Ireland’s services exports. Imports of IP-related services
and other business services both accounted for some 40 percent of Ireland’s
services payments.
In 2018, India was the eighth-largest services exporter and the tenth-largest
services importer. Rapid export growth in other business services for three
consecutive years (around 9 percent) and in telecommunications, computer and
information services (7 percent in 2018) boosted the country’s performance.
Leading exporters in world trade in commercial services, 2018
(Billion dollars and percentage)

Annual
Rank Exporters Value Share Percentage
Change
1 United States 808 14 4
2 United Kingdom 373 6.5 6
3 Germany 326 5.6 7
4 France 291 5 6
5 China 265 4 17
6 Netherlands 241 4.2 11
7 Ireland 205 3.6 14
8 India 204 3.5 11
9 Japan 187 3.2 3
10 Singapore 184 3.2 7
11 Spain 149 2.6 8
12 Switzerland 123 2.1 2
13 Belgium 121 2.1 3
14 Italy 121 2.1 9
15 Hong Kong, China 114 2 9
16 Luxembourg 113 2 10
17 Korea 95 1.7 10
18 Canada 92 1.6 6
19 Thailand 84 1.5 11
20 Austria 74 1.3 11
21 Sweden 73 1.3 -1
22 United Arab Emirates 71 1.2 2
23 Poland 69 1.2 19
24 Denmark 69 1.2 4
25 Australia 68 1.2 7
26 Russian Federation 64 1.1 12
27 Chinese Taipei 50 0.9 12
28 Israel 50 0.9 12
29 Turkey 48 0.8 11
30 Macao, China 44 0.8 12
31 Greece 43 0.7 14
32 Norway 43 0.7 5
33 Malaysia 40 0.7 7
34 Portugal 37 0.6 10
35 Philippines 37 0.6 8
36 Brazil 33 0.6 -1
37 Finland 33 0.6 10
38 Czech Republic 30 0.5 11
39 Hungary 29 0.5 0
40 Mexico 28 0.5 5

Leading importers in world trade in commercial services, 2018

(Billion dollars and percentage)
 Annual
Rank Importers Value Share Percentage
Change
1 United States 536 9.8 3
2 China 521 9.5 12
3 Germany 350 6.4 6
4 France 257 4.7 5
5 United Kingdom 230 4.2 11
6 Netherlands 22 4.2 11
7 Ireland 218 4 9
8 Japan 198 3.6 4
9 Singapore 187 3.4 3
10 India 175 3.2 14
11 Belgium 129 2.3 12
12 Italy 123 2.2 8
13 Korea 123 2.2 2
14 Canada 112 2 5
15 Switzerland 103 1.9 0
16 Russian Federation 93 1.7 7
17 Luxembourg 86 1.6 10
18 Spain 85 1.5 12
19 Hong Kong, China 81 1.5 5
20 United Arab Emirates 71 1.3 1
21 Australia 71 1.3 6
22 Sweden 69 1.3 2
23 Denmark 8 1.2 11
24 Brazil 66 1.2 -1
25 Austria 62 1.1 12
26 Chinese Taipei 56 1 6
27 Saudi Arabia 55 1 2
28 Thailand 55 1 19
29 Norway 52 0.9 4
30 Malaysia 44 0.8 5
31 Poland 43 0.8 13
32 Mexico 37 0.7 1
33 Finland 35 0.6 14
34 Indonesia 35 0.6 7
35 Kuwait 34 0.6 23
36 Qatar 31 0.6 3
37 Nigeria 31 0.6 70
38 Israel 30 0.6 7
39 Philippines 26 0.5 2
40 Czech Republic 25 0.4 14

World Trade in Developing Economies

Merchandise exports of developing economies grew by 11 percent in 2018 while
imports increased by 12 percent, continuing the positive growth of 2017 after a
decline in 2015-16. Merchandise exports totaled US$ 8.22 trillion and imports
US$ 7.97 trillion in 2018. Exports and imports grew across all regions in 2018,
apart from imports of developing countries in Europe, which showed a slight
decrease of 1 percent.
Overall, developing economies’ exports and imports grew at a faster rate than
those of developed economies and the world. Developing economies in Africa
and the Middle East showed the strongest export growth in 2018. On the import
side, Latin America, Africa and Developing Asia had double digit growth in 2018.

Current News
Local News
Oil price drop during pandemic
Acting Socioeconomic Planning Secretary Karl Chua says Filipino consumers will
benefit from the drastic drop in oil prices in the world market
There is an oversupply of oil in the global market right now, bringing its price on a
negative level.
The glut may be initially viewed as a win for consumers, but on a bigger scale, it
is an indication that economic activity has drastically slowed down due to the
pandemic.
On the other hand, Acting Socioeconomic Planning Secretary Karl Chua says
Filipino consumers will benefit from the drastic drop in oil prices in the world
market. He noted that the Philippines is not an exporter of oil."So definitely we'll
not suffer. We are an importer, definitely we will benefit from this lower price,"
Chua added.

International/Global News
Pandemic Raises Worries Over Global Trade’s Future
The ongoing coronavirus pandemic has upended international trade flows,
decimating emerging markets dependent upon imports and exports and leading
to shortages of medical and other essential supplies around the world.
Many believe the outbreak has permanently altered the global flow of goods and
services, as the concept of globalization loses political popularity and companies
seek to minimize dependence on one particular country or part of the world.
"Take pharmaceuticals, for instance. In the future, I expect more production here
in Europe," Erich Staake, CEO of Duisport Group
Japanese officials has earmarked roughly $2 billion to help domestic
manufacturing companies move their operations out of China.
French Finance Minister Bruno Le Maire told that one of the 'long-term
consequences" of the outbreak would be a forced re-examination of "the
organization of globalization." He said he believes France needs to "reduce our
dependence on certain great powers like China."
And in the United States – where President Donald Trump's administration has
been among the most active globally in pushing nationalistic policies and
withdrawing from longstanding international trade accords – discussions are
ongoing about how to foster greater supply chain independence
"We are dangerously over-dependent on a global supply chain," White House
economic adviser Peter Navarro told reporters during a coronavirus task force
news briefing last week
China over several decades built a reputation as a global supply chain
powerhouse. Still, China is expected to remain vital to the global supply chain in
the near-term – due in no small part to the fact that the virus appears to have
largely run its course domestically. Aggressive quarantining measures in recent
months shuttered much of the Chinese economy. But experts expect China to be
fully operational well before its Western economic rivals in North America and
Europe, which are still widely implementing stay-at-home orders to mitigate the
spread of the virus.
As lockdowns and social distancing measures are enforced throughout the world,
freight and cargo shipments have plummeted – both because many companies
have shut their doors and because port and transportation workers around the
world have been sick or have not been allowed to return to work.
The result has been a grinding halt to the flow of goods around the world that the
World Trade Organization believes will make 2020 one of the worst years for
trade in modern history. The WTO in a report published this week estimated
international commerce will contract by at least 13% this year. In a worst-case
scenario, it could plummet by as much as 32%.
Further weighing on trade flows have been a series of government decisions to
restrict international sales of in-demand medical equipment that doctors and
health care professionals need in their fight against the pandemic. Countries are
demanding equipment-producing companies to prioritize domestic orders and to,
in some cases, cancel shipments abroad.
India clamped down on its outbound shipments of hydroxychloroquine, an anti-
malaria drug that anecdotal evidence suggests may be effective in treating the
virus – though it partially lifted its restrictions this week after drawing the ire of the
Trump administration. Germany temporarily banned exports of medical protective
gear last month. Pressure from neighboring countries dependent on those
supplies, however, led Germany to make a similar reversal days later.
The U.S. is also preventing some domestically produced personal protective
equipment from being sold overseas. The Trump administration has only allowed
3M to export certain ventilator products to some markets in North America and
Latin America.
"One should worry most about developing countries without any domestic
suppliers, who also need critical medical supplies, and who will be locked out,
and not access essential equipment, medicines, and basic foodstuffs because of
export restrictions in the developed countries," Laker said. "We already see a
fivefold rise in prices for medical supplies, and it will be hard for poorer countries
to afford them."

Article Review
Trade and the COVID-19 crisis in developing countries
Alvaro Espitia, Nadia Rocha, Michele Ruta
(World Bank Group)
9th April 2020

The COVID-19 pandemic is increasingly a concern for developing countries. The

most developing countries rely heavily on imports to meet their needs of medical
supplies essential to combat COVID-19. Recently imposed export restrictions by
leading producing countries could thus cause significant disruptions in supplies
for developing countries and might further contribute to price increases of
medical supplies. Taking multiplier effects into account, prices for medical
supplies are estimated to rise by up to 23% on average. Tariffs and other
restrictions to imports further impair the flow of critical products to developing
countries.

Developing countries depend on imports for critical COVID-19 products

The World Health Organization COVID-19 Disease Community Package (DCP)
contains 17 products that are considered key to deal with the current crisis. They
consist of essential items for diagnosis and treatment processes such as
enzymes, hygiene products such as liquid soap and hand sanitizers, personal
protection equipment including gloves and medical masks, and case
management products such as oxygen concentrators and respirators.
The global markets for these crucial COVID-19 products are highly concentrated.
This is even more true when we focus on developing countries, as the large
majority is highly dependent on imports for these products. For the 20 developing
countries with the highest numbers of COVID-19 cases, five countries account
for 80% of total imports: the Europe, US, China, Japan and Korea. For products
needed for case management and diagnostics, the shares of imports from top
exporters are even higher and close to 90%. Import shares for protection
equipment and hygiene products are somewhat lower, but still between 50 and
60%.

Export restrictions could create disruption in supplies and price increases for
COVID-19 products
The high concentration of imports in certain products makes developing countries
extremely vulnerable to changes in policies by exporters. As a result of export
restrictions on key COVID-19 products, access to medical supplies and other
critical products could be disrupted for developing countries that need them
urgently. Table shows that medical masks are likely to be the product most
affected by such restrictions. In addition, individual countries will likely experience
shortages of specific products, as Armenia in the case of protective clothing or
Malaysia in the case of hand sanitizers. Smaller disruptions are expected on a
number of products for personal protection.

Impact of export restrictions on prices (current policies and escalation)

Export restrictions are also expected to have an impact on world prices. These
measures are intended to offset domestic shortages and rising prices as demand
for COVID-19 related products surges. But restrictive measures by exporting
countries reduce global supply, leading to even higher prices. In the short run, we
estimate that current export restrictions could increase prices of medical masks
by 20.5% and prices of Venturi masks by 9.1%. Prices of protective equipment
such as aprons and gloves are estimated to increase between 1 and 2% due to
the current restrictions. Other products could experience smaller increases.
A further concern with export restrictions is that they may be contagious. As
prices of key COVID-19 products rise, more governments could respond by
imposing export restrictions to mitigate price rises and possible shortages in
domestic markets. These actions have aggregate consequences, exacerbating
the initial shock and leading to further price escalation -a multiplier effect. If
similar dynamics played out for critical COVID-19 products, we estimate that
export restrictions will increase prices of COVID-19 relevant goods by 23% on
average. The products most affected by price increases would be protection
equipment, such as aprons (52% increase) and goggles and masks (40%
increase).

Import protection contributes to tax the health systems in developing countries

Many developing countries tax their own health care systems by imposing tariffs
on imports of medical products. Such measures increase the domestic price of
essential products, and thus reduce welfare even further. Applied tariffs on key
COVID-19 products in the 20 developing countries with the highest number of
cases are on average over 6%. Personal protection equipment products such as
aprons, medical masks and protective clothing are subject to tariffs of over 10%.
Severely affected countries such as Iran impose even higher import restrictions
of key COVID-19 products, especially for personal protection equipment.
As recent data collected by the Global Trade Alert show, several of the 20
developing countries most affected by COVID-19 have started implementing
import reforms in the past days. For instance, Pakistan introduced tax and import
duty exemption for medical and testing equipment, while Brazil eliminated tariffs
on medical and hospital products. Many of these reforms are on a temporary
basis: protection is suspended rather than eliminated. While this is a step in the
right direction, exporters might be reluctant to enter markets if they perceive
policy changes to be temporary. Locking-in tariff reductions and other policy
changes in WTO commitments would be a more effective trade policy reform to
address the COVID-19 health crisis.

Trade policy cooperation as part of the solution to the health crisis

To address the crisis, key medical supplies and other crucial COVID-19 products
should flow freely from producers to where they are needed. Export restrictions
and import protection are collectively inefficient. For developing countries, as
they see the number of COVID-19 cases rise, trade protectionism will cost lives.
Trade policy cooperation should first aim at preserving open markets in this
difficult time.

Review or Critique of Journal Article Related to the topic

China’s Zhejiang International Trade Exhibition (Philippines Manila) 2019
By Business Mirror -November 5, 2019
To help Zhejiang enterprises expand their market in the Philippines, Zhejiang
province, a major export province of China, organized by the department of
commerce will join the ZHEJIANG International Trade Exhibition 2019. The
ZHEJIANG INTENATIONAL TRADE EXHIBITION (PHILIPPINES MANILA)
2019, co-organized by the PHILIPPINES global-link EXHIBITION company, will
be unveiled at the World TRADE center of the PHILIPPINES on November 7-11,
2019. 
Zhejiang province, as a major export province of China, has organized a total of
89 well-known enterprises in the province and 100 booths to appear in the
Philippines world trade exhibition center. Zhejiang province is in the southern
wing of the Yangtze River delta, coastal region of Southeast China. It is a
province with a profound culture which is also strong in tourism activities.
Zhejiang province is not only a major province in trade circulation in China, but
also a province with a higher degree of opening to the outside world. Its total
export volume ranks third in China and the export products of building materials
are numerous including hardware tools, plumbing and sanitary ware, flooring,
mechanical and electrical pump valves, plumbing and sanitary ware.
As China's friendly neighbor, the Philippines has seen its domestic construction
development booming rapidly in the recent years. More building materials are
needed for building many infrastructures and both the government and the
Department of Commerce of Zhejiang Province has confidence in the future
development of the Philippines. They are hoping that ZHEJIANG pavilion, which
adheres to the concept of “ZHEJIANG MADE, ALL NEED”, will have a dynamic
communication with the Philippines’ buyers to provide quality products they need
that will play a role in the bright future of the Philippines
This is also the first large-scale building materials exhibition organized by
Department of Commerce of Zhejiang in the Philippines. The products to be
exhibited includes hardware tools, plumbing fittings, flooring, mechanical and
electrical pump valves, decorative materials, etc.  ZHEJIANG exhibition group
adheres to the tenet of “ZHEJIANG MADE, ALL NEED” and leads the high-
quality ZHEJIANG products. In recent years, the Philippines has made great
efforts to strengthen its domestic construction and the demand for building
materials are growing up.
This exhibition attracts buyers from many countries, buyers in the process of the
registration from the Philippines, Indonesia, Thailand, Cambodia, Malaysia, the
United Arab Emirates, Turkey, South Korea, Japan and other countries and
region.
The show will hold multiple communication BBS, that will provide a good
communication platform for purchaser including construction engineer, real
estate developers, designers, decoration companies, such as building materials
association. Also, multiple forums are held during this show and according to the
organizers, the people who come to this show are construction engineers, real
estate developers, designers’ decoration companies, and building materials
associations. We believe this exhibition will provide them with a dynamic
communication platform.
Senator Manny Pacquiao and Mayor Isko Moreno will be present to deliver a
welcome speech and welcome the exhibitors and visitors. Mr. Xie Kang,
Chairman of the Philippines Zhejiang Chamber of Commerce and officials from
Economic and Commercial Counselor’s Office of the Embassy of China in the
Philippines were also invited as honored guests.
International trade and Philippine economic growth
By: Fernando Fajardo - April,2019
No one country has all the necessary resources or capacity to satisfy the need of
their own people. However, by developing and exploiting their domestic
resources, one country can produce a surplus, and trade them for the surplus
products of other countries that they need.
In this modern world, international trade is at the heart of the global economy and
is responsible for much of the development and prosperity of the many nations.
First with the western countries beginning with England where the industrial
revolution started, followed by Japan that became the first none-western country
to join the developed world of the west, and later by South Korea, and other
newly industrializing countries, including China.
International trade though has also its own disadvantages. It can lead to over-
specialization, for example, with workers losing their jobs when world demand for
their product falls or when goods for domestic consumption can be produced
more cheaply abroad. Jobs lost through such changes can cause a lot of trouble
to many people and certain countries.
International trade can also be bad for the global economy when one country
pursues a policy of mercantilism that requires more exporting than importing at
the expense of other countries, like what the US thought of what China is doing
with respect to their trade relations.
Mercantilism was in its heyday when precious metals, such as gold and silver,
were deemed indispensable to a nation’s wealth and military power. If a nation
did not possess mines or have access to them, trade would be used to obtain
those precious metals. Doing this requires a “favorable” balance of trade or an
excess of exports over imports to the detriment of other countries that later on
forces them to retaliate by reducing their own imports. When this happens, many
countries will suffer from diminished trade.
Advocates of laissez-faire criticize mercantilism by arguing that there was really
no difference between domestic and foreign trade and trade was beneficial to all
trading partners.
Today most countries in the world are participating in international trade,
including the Philippines under the aegis of the World Trade Organization.
With international trade, the economy is in balance when aggregate demand,
consisting of final household consumption expenditures, final government
consumption expenditures, investments (both public and private), and net
exports (export minus imports) just matches aggregate production or supply
coming from all the productive sectors of the economy.
It can be shown that when a country’s net export is positive, its gross domestic
product or total output of goods and services is higher than when net export is
negative. Hence, many countries would endeavor to export more than their
imports like what Japan successfully did after the last war up to the 1980s and
China from the 1980s up to now.
Both did it mostly at the expense of the US, if we were to believe the American
narrative. Hence, their antagonism to the Japanese in the 1980s and now to the
Chinese that it currently pressures to open up their market to more US exports.
What is our own trade experience in the Philippines?
Well, it is unfortunate that in most years in the past, not only that our total trade is
one of the smallest in Asia as a fraction of the GDP, we also had always been
importing more than exporting in the past.
This could be one reason why our GDP was one of the slowest to grow in the last
fifty years of the previous century, which put us behind our neighbors in terms of
material welfare by the time we enter the new millennium.
Led by consumption, we grew a little faster at around 4.8 percent annually in the
first decade of the new century, and faster still at 6.2 percent annually in the next
six years through more investments, which growth has even accelerated in the
last two years through more government expenditures.
We could have done more if we also endeavored to reduce, if not reverse, our
trade deficit that cuts into our GDP growth. The table below shows that since
2016 our trade deficit had been growing by the twenties of million US dollars
annually from the tens of millions or less in the previous years. This is not a good
sign because it means that much of our efforts to increase aggregate demand to
push our GDP higher are only greatly diffused by our large and growing trade
deficits.
Summary

Learning and Insights

International trade plays an important role in the development of the country. It

creates supply to external trade to maximize the benefits to be derived out of the
resources that we have. It also helps the local businesses to extend its market
beyond the borders. International trade can supply the demand of the country
especially those goods or services that it cannot provide on its own. In other
words, international trade benefits both the importer and exporter. Maximizing the
international trade with careful analysis of the country’s demand, supply and the
benefits is attainable trough building a good economic relationship between
different economic blocs.

Source
Business Mirror (2019). Chinas Zhejiang International Trade Exhibition
Philippines Manila. A Journal Article
Espitia, A, N Rocha and M Ruta (2020), “Database on COVID-19 trade flows and
policies”, World Bank.https://voxeu.org/article/trade-and-covid-19-crisis-
developing-countries

Fernando Fajardo (2019). International Trade and Philippine Economic Growth.

A Journal Article

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