《Openness to trade in manufactures in the OECD》.pdf

Jourml of INTERNATfONAL ECONOMICS ELSEWIER Journal of International Economics40 (1996)23-39 Openness to trade in manufactures in the OECD James Harrigan” Deparrment of Economics, University of Pittsburgh, Pittsburgh PA 15260, USA Received21 March 1995,accepted14August 1995 Abstract How open are the advanced economies to trade with each other? In this paper, openness is calculated relative to the predictions of the monopolistic competition trade model using data on manufacturing trade and production in the OECD in 1985. The paper finds that (1) Japan imports much less than other large OECD countries, while the European countries have larger import volumes than does the US, (2) Japan and the US engage in less intra-industry trade than the rest of the OECD, and (3) the EU countries are less open to imports from Japan and the US than those countries are open to imports from the EU. 1. Introduction A central question in the politics and economics of international trade is: how open are the advanced economies to trade with each other? An answer to this question is interesting for at least two reasons. First, it can give an indication of the possible gains from further reduction of trade barriers. Second, openness to trade is an intrinsically important political question, although much of the political discussion of the volume of trade is conducted in terms