Britain's share of world trade falls to all-time low

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The Independent Online
Britain's share of world trade in manufactured goods has been falling steadily for 10 years, reaching an all time low of just 4.7 per cent last year, according to a survey from the influential Association of German Chambers of Industries and Commerce.

By contrast, in 1985 Britain's share was 5.6 per cent.

The survey shows that Britain broadly maintained its position in the European and North American markets, with 7.3 per cent and 3.4 per cent, respectively.

But our share of export markets in Asia has plummeted, from 3.3 per cent 10 years ago to only 2.2 per cent last year.

The UK is among the few western countries whose export shares in the Asian market have become weaker than in the mid 1980s.

"While countries like Italy, France or Germany increased their shares in Asia, the British failed. The feeble performance of British companies in Asia is the main reason for the loss of market share in world trade," said Guenter Lambertz, the German economist who conducted the survey.

"This is a dangerous situation, for Britain because Asia is and will be the fastest growing market of the world."

The world's leading export country is still the US with an increased share of world trade of 16.4 per cent in 1995, compared with 16.1 per cent the year before.

With 10.8 per cent of world markets, Germany regained second place, narrowly pushing Japan out of the number two position. Japan's share was down 0.1 per cent to 10.5 per cent.

The strong showing by the US is attributed to a better performance in other North American markers.

Mr. Lambertz said that the US share of trade within North America had increased since the North American Free Trade Agreement - which brought down tariff barriers between Canada, the US and Mexico - came into force in 1995. This in turn was reflected in the figures showing an increased US share of world trade.

Whereas a strong yen, relative to the US dollar, caused a fall in Japan's share of world markets, the high-priced German mark seems to have had little effect in German export performance.

"German companies were able to pass higher prices on to their customers and as a result they increased their market share by value.

"But we expect that on a medium-term perspective foreign clients will reduce their orders," Mr Lambertz said.

The Association explains that the increased export share of Germany in Asia, up to 4.8 per cent from 4.3 per cent in 1985, is the main reason for its strong performance world-wide. There was also strong demand for capital goods, where German companies are the leading suppliers.

Typically, Germany appears far from happy with its performance.

Mr. Lambertz said: " Our success in export markets shouldn't be overestimated. German companies can only be competitive if they keep on rationalizing and increase the amount of imported cheaper semi-finished products."

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