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Chapter IV
International competitiveness
of EU industry
This chapter analyses the international competitiveness of
EU industries. The analyses are performed using trade flows
to calculate indicators of competitiveness and other aspects
of international trade. An analysis of international trade is
important for at least two reasons. First, exports of goods
and services accounted for 13.4 % 60 of EU GDP in 2009;
the figure is substantially higher for some industries,
which shows the importance of international markets for
domestic production. Second, performance in external
trade provides insight into various factors which determine
trade patterns and the competitiveness of EU industries.
This chapter covers trade in both goods and services
and also contains a section on foreign direct investment
(FDI), which is important for understanding the effect of
internationalisation on European industries.
The chapter is organised as follows. Section IV.1 presents an
overall picture of EU relative weight in world trade flows.
Section IV.2 is dedicated to an analysis of competitiveness
from various angles. The competitiveness of EU industries
is analysed using three indicators: share in world markets,
relative trade balance, and revealed comparative advantage.
EU Intra‑industry trade is examined in section IV.3. The
role of technology in international trade is analysed in
section IV.4. Section IV.5 analyses EU trade in intermediate
goods from two perspectives, beginning with, the import
dependence of foreign imports for EU exports. This is
followed by analyses of EU competitiveness in intermediate
goods according to a broad categorisation of goods. Finally,
foreign direct investment by sector is analysed in Section
IV.6 together with indicators of internationalisation of R&D.
IV.1 EU importance in world trade
This section provides a general framework for the analysis
of EU competitiveness in external markets by presenting the
60 Eurostat globalisation indicators.
share of the EU and other regions in cross‑border flows of
goods and services
iv11 goods
The EU‑27 constitutes a large share of world trade in
manufactured goods: exports originating in EU‑27 countries,
including intra‑Eu‑27 trade, accounted for 40.8 % of total
world exports in 2009. The importance of the EU single
market is illustrated by the fact that more than a quarter
of total cross‑border supplies of goods took place within
the EU‑27. Asia and North America are the two other main
trade players and, together with the EU‑27, accounted for
about 84 % of total world export flows, cf. Table IV.1. 61
61 The regions are as follows. Other Western Europe: Iceland,
Norway, Switzerland. Central and Eastern Europe: Albania,
Armenia, Azerbaijan, Belarus, Bosnia Herzegovina, Croatia,
Georgia, Kazakhstan, Montenegro, Rep. of Moldova, Russian
Federation, Serbia, TFYR of Macedonia, Turkey, Ukraine. North
America: Canada, USA. Latin America: Argentina, Bahamas,
Belize, Bolivia, Brazil, Chile, Colombia, Costa Rica, Cuba, Dominican
Rep., Ecuador, El Salvador, Guatemala, Haiti, Honduras, Jamaica,
Mexico, Neth. Antilles, Nicaragua, Panama, Paraguay, Peru,
Suriname, Trinidad and Tobago, Uruguay, Venezuela. Middle
East: Bahrain, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Occ.
Palestinian Terr., Oman, Qatar, Saudi Arabia, Syria, United Arab
Emirates, Yemen. Asia: Afghanistan, Bangladesh, Bhutan, Brunei
Darussalam, Cambodia, China, China, Hong Kong SAR, China,
Macao SAR, Dem. People’s Rep. of Korea, India, Indonesia, Japan,
Kyrgyzstan, Lao People’s Dem. Rep., Malaysia, Maldives, Mongolia,
Myanmar, Nepal, Pakistan, Philippines, Rep. of Korea, Singapore,
Sri Lanka, Tajikistan, Thailand, Timor-Leste, Uzbekistan, Viet Nam.
Oceania: Australia, New Zealand. Africa: Algeria, Angola, Benin,
Botswana, Burkina Faso, Burundi, Cameroon, Cape Verde, Central
African Rep., Chad, Comoros, Congo, Côte d’Ivoire, Dem. Rep. of
the Congo, Djibouti, Egypt, Equatorial Guinea, Eritrea, Ethiopia,
Gabon, Gambia, Ghana, Guinea, Guinea-Bissau, Kenya, Lesotho,
Liberia Libya, Madagascar, Malawi, Mali, Mauritania, Mauritius,
Morocco, Mozambique, Namibia, Niger, Nigeria, Rwanda, Senegal,
Sierra Leone, Somalia, South Africa, Sudan, Swaziland, Togo,
Tunisia, Uganda, United Rep. of Tanzania, Zambia, Zimbabwe.
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