Exports of Manufactures from Developing Countries: Performance and Prospects for Market Access

Exports of Manufactures from Developing Countries: Performance and Prospects for Market Access

Exports of Manufactures from Developing Countries: Performance and Prospects for Market Access

Exports of Manufactures from Developing Countries: Performance and Prospects for Market Access

Excerpt

I completed the calculations for this study in late 1981. Since then, much has happened to the international economic environment. The worst global recession since the 1930s and extraordinarily high real interest rates have combined with the second oil shock to plunge many of the developing countries into severe recession and debt-servicing crises. The high exposure of Western banks in developing countries means that, even more than before, the success of export expansion in those countries will affect not only their own development but also the stability of the international financial system.

In a few instances, changing circumstances have modified the implications of the empirical analysis of this study. For example, the 1978 data base that was used to examine import penetration indicated that developing countries supplied little steel to industrial countries. But by 1983, after a new regime of quotas had limited U.S. imports of steel from Europe, developing countries had increased their share in U.S. steel imports to nearly one-half, precipitating new efforts by the U.S. steel industry to curtail these imports and creating a conflict between the objectives of the domestic industry and the U.S. foreign and economic policy goals of helping Argentina, Brazil, and Mexico recover from their debt crises. Similarly, Canada has now obtained export restraints on Japanese automobiles, an understandable development in light of similar protection by the United States in 1981 and by other major industrial countries even earlier. The estimated coverage of Canadian protection is understated as a result, and the statistical functions explaining Canadian protection may be distorted by the exclusion of automobiles from the list of protected sectors.

Nonetheless, because the analysis of this study takes a long-range view, focusing on potential trends in trade and protection through 1990 . . .

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