The recent wave of protectionism sweeping across the global economy has far-reaching implications for trading countries. According to a report released by the Word Trade Organization (WTO) in June 2016, more than 1,500 new trade restricting measures have been put in place by G20 countries since the year 2008 while only 387 have been removed during this period.
While countries have pursued trade protectionist policies to counter the problems of rising unemployment and recession, and sometimes wholly due to political reasons, they also face the challenges of a fall in exports, a slowdown in economic growth and possible retaliation from trading partners.
Amidst a restrictive trade environment, high exporting nations in particular also face the challenge of maintaining their leading role in global trade as their products continue to grapple with stiff competition in the international markets.
We have compiled a list of the top 5 exporting countries in the world (by value of exports, 2015 figures):
Value of Exports: $510.6 billion
Key exports: Electronic equipment (49.8% of total exports), Gems and precious metals (14.2%), Machines, engines, and pumps (13%), Medical, technical equipment (2.7%) and Plastics (2.3%).
Despite a relatively small population of just 7.2 million, Hong Kong is the world’s fifth and Asia’s fourth largest export nation, ahead of India, with exports worth $510.6 billion as of 2015. China is Hong Kong’s largest trading partner, accounting for 54% of total exports. The United States and the EU also account for 9.9% and 9.7% respectively. Other major trading partners include Japan, Singapore, Taiwan and South Korea.
Hong Kong operates under a free trade policy; as such, there are no barriers to trade and no protectionist measures are taken by the government against the import or export of goods. Trading with Hong Kong only entails meeting licensing requirements for certain commodities, which were put in place to maintain the country’s contractual agreements with trading partners and for health, safety and internal security reasons.
As a result of its free trade-oriented stance, Hong Kong has been a member of the World Trade Organization (WTO) since the organization’s inception in 1995 and has since been actively involved in its activities.
Value of Exports: $526.8 billion
Key exports: Electronics (26.3% of total exports), Vehicles (13.1%), Machines, engines, and pumps (11.8%), Ships and boats (7.3%), Oil (6.3%), and Medical, technical equipment (6.2%).
South Korea is Asia’s fourth-largest economy and is famous for its rise from one of the poorest countries in the world to a developed, high-income country in just one generation. The driving force behind this transformation are exports, and the country is now one of the largest exporters in the world with total exports amounting to $526.8 billion as of 2015. The country’s major export partners are: China (26% of total exports), the United States (13%), Hong Kong (6%), Vietnam (5%), Japan (5%) and Singapore (3%).
South Korea’s largest companies are among the world’s top players across a variety of sectors including electronics, shipbuilding, automobiles, and steel. The country’s top brands include:
- Samsung, the world’s largest producer of smartphones and televisions
- Hyundai Motor Company, the fourth largest car company in the world
- POSCO, the world’s biggest steel company by market share
- Hyundai Heavy Industries, the world’s largest shipbuilder
A key aspect of South Korea’s success is its commitment to free trade, and the country has emerged as one of the leading advocates of free trade agreements. In addition to signing bilateral agreements with its major trading partners including the U.S., China, and ASEAN, South Korea is also a signatory to the EU-South Korea Free Trade Agreement, the first of its kind in Asia.
Value of Exports: $624.9 billion
Key exports: Motor vehicles (13.6%), semiconductors (6.2%), iron and steel products (5.5%), auto parts (4.6%), and plastic materials (3.5%).
Japan is the world’s third largest economy and the 3rd largest exporting nation, with exports worth $624.9 billion as of 2015. The country’s major export partners include the United States (20.2% of total exports), China (17.5%), South Korea (7.1%), Hong Kong (5.6%) and Thailand (4.5%).
As an export dependent economy, Japan is home to a number of major multinational companies which include (ranked by 2015 revenue):
- Toyota Motor, the world’s largest automaker ($235.8 billion)
- Honda Motor, the world’s largest motorcycle manufacturer ($118.1 billion)
- Nissan Motor, the sixth largest automaker in the world ($101 billion)
- Hitachi, a diversified company with interests in electronics and finance ($84 billion)
In 2013, Japan began negotiations with the European Union (EU) to forge an EU-Japan Free Trade Agreement. The agreement presents huge benefits for the participants, as Japan is the EU’s second-largest trading partner in Asia, while Japan and the EU collectively account for over one-third of the world’s GDP.
Value of Exports: $1.50 trillion
Key exports: Machines, engines, and pumps (13.7% of total exports), Electronic equipment (11.3%), Aircraft and spacecraft (8.7%), Vehicles (8.4%), Oil (7.1%), and Medical equipment (5.5%).
The United States is the world’s largest economy and the second largest exporting nation with goods amounting to $1.50 trillion exported across the globe in 2015. The country’s major trading partners include: Canada (18.6%), Mexico (15.7%), China (7.7%), and Japan (4.2%).
Ranked by total assets, America’s major exporters include:
- Exxon Mobil, the world’s largest oil and gas company ($336.8 billion)
- Apple, the world’s largest information technology company ($293.3 billion)
- Chevron Corporation, the third largest company in the U.S. ($266.1 billion)
- Ford Motor Company, the fifth largest automaker in the world ($224.9 billion)
- General Motors, one of the Big 3 automakers ($194.5 billion)
Trade protectionism was a major theme in the recently concluded U.S. election which saw President-elect Donald Trump reveal his plans to take trade protectionist measures against a number of countries including China, the country’s third largest export partner. The election has also fueled concerns about the end of the Transatlantic Trade and Investment Partnership (TTP), which has been proposed as a means to foster free trade among countries in the Transatlantic region and had a potential of raising America’s GDP by almost 3%.
Value of Exports: $2.27 trillion
Key exports: Electrical and other machinery including data processing equipment, apparel, textile, iron and steel, optical and medical equipment.
As the world’s largest exporting nation, a position assumed since 2009 after overtaking the United States, China exports more goods than any country in the world. China’s major export partners include: the United States (18% of exports), Hong Kong (15%), the EU (16%), ASEAN countries (12%), and Japan (6 %). The country is a major player across export industries such as manufacturing, steel, automotive, electronics, and oil and gas.
China’s top export companies include:
- PetroChina and Sinopec-China Petroleum in the oil and gas industry
- SAIC Motor, Dongfeng Motor Group, and BYD in the automotive industry
- Huawei, Lenovo, and Xiaomi in the electronics industry
According to Yao Jian, a Chinese Ministry of Commerce official, China’s economy has been severely affected by rising trade protectionist policies in the wake of the 2008 global financial crisis. Yao noted that trade protectionist measures were devised by countries as a strategy to revitalise their economy amidst a plunge in local demand and failure to increase the competitiveness of exports.
In the first 3 quarters of 2016, 19 countries set up 88 investigations into Chinese exports worth more than $10 billion. The United States, in particular, has been a fierce fighter against Chinese dumping, launching 14 probes into exports worth $5.8 billion.
As a result of such trade protectionist policies and falling global demand, China’s exports to America, Japan and the EU fell by 15%, 14.7% and 21.6% respectively in the first 3 quarters of 2016.