Edited by David Deese
Chapter 13: Multilateral institutions and African economic integration
The average level of import protection around the world has dropped to the 5–10 percent range (Kee et al. 2009). In conjunction with technological changes that greatly reduced trade costs – telecommunications, the Internet, containerization and other improvements in logistics – the result was a sustained boom in world trade. The value of global trade in goods and services passed the US$20 trillion mark in 2011 (WTO 2012) or 59 percent of global GDP, up from 39 percent of GDP in 1990. This increase in internationalization was due in no small part to ever greater “vertical specialization,” with firms and plants in different countries specializing in different parts of the value chain for a product. The share of manufactures in total exports of developing countries increased from just 30 percent in 1980 to over 70 percent today, with a substantial proportion of this consisting of intra-industry trade – the exchange of similar, differentiated products. Since the 1990s intra-industry trade ratios for high-growth developing and transition economies have risen to 50 percent or higher. Much of this consists of intra-regional trade. For example, about half of all East Asian exports of manufactured goods go to other East Asian economies. Of course, there is substantial variation across countries and regions. Sub-Saharan African countries in particular remain heavily dependent on natural resources and agricultural products.
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