Building capacity to help Africa trade better

Intra-industry trade: an examination of South Africa and the BRICs

Working Papers

Intra-industry trade: an examination of South Africa and the BRICs

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Intra-industry trade (IIT) is defined as the simultaneous import and export of goods within the same industry, and the IIT data presented here essentially shows to what extent trade is balanced between South Africa and selected partners in specific lines. The methodology simply compares the differences between imports and exports as a share (or percentage) of total trade in that particular line and then uses the trade weight to aggregate these line-by-line values to a final figure for the bilateral profile. In particular, it seeks to highlight how trade in like products may be evolving between trading partners.

Results for South Africa conform to the expected pattern of a resource exporting – manufactures importing nation. Overall, the IIT level is modest. At the next level down for individual countries it suggests levels of roughly half to two-thirds of this aggregate value for the ‘traditional’ partners of the European Union (EU), United States (US), Japan and Australia, while for the newly-emerging BRIC countries (Brazil, Russia, India and China) and Korea it is almost exclusively in single figures, although the aberration of aircraft trade with Brazil in 2001 was noted. Within the EU a similar pattern emerges whereby the two main partners of Germany and the EU have figures that in some years rival the parent aggregated EU, while the less significant partners from Europe have figures that are all in the 0.07 to 0.13 level range. In general, the more disaggregated the analysis becomes the lower the expected IIT value, but this is not an absolute.

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Intra-industry trade: an examination of South Africa and the BRICs - Author(s): Ron Sandrey and Taku Fundira

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