Net Trade: A Note on Measuring Changes in the Competitiveness of British Industry in Foreign Trade

Extract

Britain has traditionally been a large net importer of basic foodstuffs, raw materials and fuels, the resulting deficit being covered by net exports of manufactures and by invisible earnings. The net export position in manufactures was the result of both large exports and very small imports. Since the war, however, and more especially during the 1960s, there has been a radical change. British exports of manufactured goods have lagged behind the growth of world exports, while imports of manufactures have risen extremely rapidly. Between 1963 and 1972, almost three quarters of the rise in visible imports, measured in balance of payments terms, is attributable to manufactured goods. Thus net exports of manufactures have barely risen in absolute terms, and their size in relation to total exports of manufactured goods has diminished sharply.