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Published online by Cambridge University Press: 26 March 2020
Britain's poor export performance during the course of last year was the more surprising because, for the first time for a number of years, the change in the area pattern of world trade was not unfavourable to her. Sterling area countries take about 40 per cent of Britain's exports of manufactures, but only about 10 per cent of those of the other main exporters of manufactures. From 1954 to 1959 overseas sterling area imports rose more slowly than world imports, and Britain lost from this. But last year sterling area imports rose relatively fast, and Britain should have gained.
The trouble was in 1960 that Britain's share in these imports fell much faster than before; she lost nearly 5 per cent of the market—this was more than twice as big a loss as the average from 1954 to 1959. This fall in share in 1960 was not big enough to stop Britain's exports of manufactures to the overseas sterling area from rising altogether; but it meant that they went up only 6 per cent in value, whereas those of her eight main competitors rose about 28 per cent.
Charts 1 and 2 look at this matter in longer perspective. The main point of the charts is simply this : it is Britain's share in sterling area markets which has fallen steeply since 1954 : her share in non-sterling area markets had, until 1960, hardly changed.
(1) See ‘World Trade in Manufactures’ R. L. Major, National Institute Economic Review, no. 10, July 1960.
(2) It was this unexpectedly large fall in Britain's share in sterling area markets which was the main error in the forecast that Britain's exports would continue to rise appreciably through 1960 (National Institute Economic Review, no. 7, January 1960, pages 41 and 42).
(1) The calculations are based on the export figures for the nine countries—except for Ghana and Nigeria, whose import figures were used. ‘Manufactures’ are the goods covered by the Standard International Trade Classification sections 5 to 8; United States special category exports are excluded throughout. The overseas sterling area excludes Iceland and Ireland and includes Iraq. The detailed commodity and area analysis which follows omits Middle Eastern sterling countries, and also Burma and Ceylon, for which comparable figures were not available.
(1) Here, and throughout the article, the percentage shares refer to the total exports of manufactures of the nine countries. The market' means their combined exports to a country.
(2) Australia, however, reserved the right to suspend her obligations, after consultation, in respect of particular goods when a serious danger to Australian industry was caused or threatened. Consultations have taken place about toys and footwear and Japan has imposed limitations on the export of these items.
(1) This group includes the Malayan Federation, Ghana, Nigeria and Cyprus. The separate figures for Ghana and Nigeria, given below, cannot be subtracted from the total, because they are taken from the import, not the export side.
(1) Including newly independent territories—Malayan Federation, Ghana, Nigeria and Cyprus.
(2) This proposition can be set out as follows :
Using the x2 test it can be shown that if there were no relationship between changes in total trade and changes in Britain's share, a degree of association as close as that illustrated by this pattern would occur by chance about 1 in 200 times.
(1) Copies of the figures on which the commodity charts are based (charts 6 to 14), together with additional figures for other commodities and other countries, can be obtained on request to the National Institute Economic Review.