It is difficult to measure the impact free trade has on individuals. Opening borders to goods, services, money, people and ideas can cost jobs while benefiting consumers. There are winners and losers. With President Donald Trump promising to renegotiate trade agreements and introduce new import tariffs, journalists need to know where to find the data that tell the story of trade and today’s global economy.
Trade can be hard to assess in a globalized world because what makes an import and what makes an export is no longer straightforward. In “The Little Book of Economics,” the Wall Street Journal’s chief economic commentator Greg Ip explains:
“Apple’s iPod is assembled in China, but much of the finished product’s designs, components, marketing and value were added elsewhere. Indeed, according to a study by the Personal Computing Industry Center at the University of California, Irvine, just 2 percent of all the wages earned in the sale of an iPod are earned in China, while 70 percent are earned in the United States. When Apple sells an iPod in Germany, it shows up as an export from China, but most of the benefit flows back to the United States.”
The losers, in this case, are the American workers who might have once assembled an iPod — the workers who cannot compete with low-wage workers in China. The winners are anyone who can afford an iPod (and Apple’s shareholders).
A host of government agencies and multilateral organizations collate and distribute data on trade volumes, tariffs (import taxes), quotas and subsidies. They hold thousands of untold stories. Here are some places to start:
World Trade Organization
The World Trade Organization (WTO) was founded in 1955 to replace the General Agreement on Tariffs and Trade. It is an intergovernmental arbiter that helps its 164 members settle trade disputes. To join, a country must theoretically give every other member “most-favored nation” status, meaning that if it grants one country a lower customs duty for a particular product, it must do so for all other WTO members.
Resources at the WTO:
- Key trade indicators for 195 economies. (Example: over 81 percent of Mexican exports are sent to the United States.)
- World Tariff Profiles is an annual report detailing the tariffs and customs duties (import taxes) each country applies on each product it imports.
- More detailed tariff data are available here.
- Details on the complaints countries file against each other.
- A number of other statistics are available here, including:
- Data on trade flows – For example, how much iron and steel Australia imported and exported in 2016 (or for each year in the 1990s).
- Trade profiles – Here you can see Russia’s gross domestic product (GDP, the size of its economy), its major exports and imports, its trading partners, and where it ranks relative to other exporters and importers.
- The most recent data on each region’s and country’s imports and exports.
- This interactive map allows you to visualize particular exports and imports. For example, where did Japan send fish and how much (in dollar terms) in 2015? How has that changed over time? (Note: the flows are not always available at that level of detail.)
- This map allows you to quickly view indicators like most-favored nation tariff rates, share of global merchandise exports and total imports/exports.
- These country profiles show how an economy adds value to exports, where the country sits in global value chains (think of the iPod example above), and how much the country trades in intermediate goods and services
United Nations Statistical Division Commodity Trade database
Known as Comtrade, this is one of the most comprehensive sources of data on trade, containing, it claims, more than 1 billion records. These are trade figures from national statistics agencies around the world that have been standardized by the UN.
At least 27 U.S. government agencies and offices work on trade, according to a list put together by the Office of the United States Trade Representative (USTR).
The USTR works on behalf of the president to negotiate with other countries. The House of Representatives Committee on Ways and Means and the Senate Finance Committee manage trade policy and the Senate ratifies treaties. How does this work in practice, when almost 200 countries are trading with each other and individual legislators are complaining about far-flung nations hurting a factory in their district? Ip explains in his book:
“Complaints about imports usually fall into one of three categories: subsidies, dumping, or surges. A subsidy is a government grant or some other favorable treatment that lowers the cost of the import. Dumping occurs when a foreign company sells its products abroad for less than it costs to make them, or for less than it charges at home. A surge is a sudden increase in imports.
“Subsidy and dumping complaints are heard by the Import Administration [International Trade Administration], part of the Commerce Department. If the Import Administration agrees subsidies or dumping have occurred, as it does 95 percent of the time, it sends the complaint to the federal International Trade Commission (ITC), an independent, bipartisan panel, to determine if the subsidy or dumping actually hurt anyone in the United States. About 60 percent of the time it concludes that it did. In the case of subsidy it recommends a countervailing duty. In the case of dumping it recommends a countervailing duty. The president has little discretion here: if the ITC says injury has occurred, the Commerce Department generally has to impose the duty.”
The Department of Commerce runs the Census Bureau, which includes import/export data for the U.S., rate provisions and other data. You can subscribe to tailored monthly email updates for economic indicators such as the trade deficit. Sign up here.
- The United Nations Conference on Trade and Development (UNCTAD) has a straightforward website offering many economic indicators and trade volume data. It is often easier to browse than the WTO’s site. UNCTAD also helps national statistics agencies build capacity.
- The UNCTAD Trade Analysis Information System (TRAINS), which is run by the World Bank, details trade control measures, including various types of tariffs.
- United Nations Industrial Development Organization (UNIDO) hosts a database “comprising statistics of overall industrial growth, detailed data on business structure and statistics on major indicators of industrial performance by country” over time.
- The World Input-Output Database, run by the University of Groningen in the Netherlands, is useful for anyone studying gross output and industrial value added during trade flows.
- The Organization for Economic Cooperation and Development – a club of rich countries – also has input-output tables.
- An overview of international organizations’ databases on trade, published by the UN Statistical Agency.
A bit of vocabulary:
- Exports – what one country sells abroad (both goods and services)
- These create jobs. From an American perspective, think Hollywood movies and frozen chickens (The U.S. exported $2.2 billion of frozen chicken parts in 2015, according to the Census Bureau).
- Exports of goods and services account for 6 percent of America’s GDP, according to the World Bank.
- Imports – what one country buys from abroad
- When these are cheap, they enrich consumers. iPods likely would be more expensive if they were made by American workers.
- Imports give consumers choice.
- Bilateral trade flows – the total, usually in a dollar figure, that two countries sell each other (exports plus imports).
- Balance of trade – This is either a deficit (you buy more abroad than you sell abroad) or a surplus (sell more than you buy). Theoretically, it could be perfectly balanced.
- Terms of trade (TOT) – To calculate this ratio, divide the value of exports by imports and multiply by 100. When less than 100 percent, more value is going out than is coming in. When the number is greater than 100 percent, the country is accruing more than it is spending abroad.
- Exchange rate — A currency in terms of another. If the dollar is worth fewer euros, American goods are cheaper to Europeans and so Europeans will buy more American-made stuff. At the same time, French cheese and German Porches get more expensive.
- Comparative advantage – A country can do something more efficiently (usually cheaper) than others. Google builds some of its data centers in northern countries where the temperature is often cold. For data centers, Finland has a comparable advantage because Google needs to pay for less cooling. Mexico has a comparative advantage in labor because its workers demand less pay than American workers.
- Outsourcing – When a firm hires workers in a foreign country because they are cheaper. Ford has moved much of its car production to Mexico because it can pay workers there less while still enjoying the ability to ship those cars to the United States duty free, thanks to NAFTA.