Question

how do international trade patterns change over time?

Answer 1

International trade has been changed trade pattern over time to time, which characterized unusual and persistent weakness in the last few years. The slowdown in trade in 2012–2014 and its decline in 2015 concerned all types of goods, some more than others. However, not all recent trade statistics point to a decline in international trade, as overall growth in the volume of international trade was still positive in 2015, but only at about 1.5 per cent. With regard to export growth, the catch-up process of developing countries, observed from the 1990s on, largely stalled in 2012, both in relation to goods and services. Since then, the trade patterns of developing countries have followed a trend similar to that of developed countries. Among developing countries, the slowdown in trade affected all regions, including Asian economies as well as sub-Saharan African countries. Since 2012, growth in South–South trade has slowed considerably: in 2014 such growth was virtually zero, and in 2015 it fell by about 10 per cent. The weakness in international trade is also having major repercussions for the integration of poorer countries into the global economy. While the share of the least developed countries (LDCs)in global merchandise exports grew rapidly before 2008, in the years that followed, it reached a plateau of about 1.2 per cent.
The continuing slowdown in trade follows a long period of intensive international trade and strong economic growth, which came to an end with the 2008–2009 global crisis.International trade further deteriorated in 2014 and 2015, especially in relation to developing countries.

Few Important changes in International Trade:

From 1950s to 1980s, trade dominated by flows between high-income countries – latter accounted formost of global GDP, and developing countries maintained high trade barriers.
Trade between US, Canada, Western Europe and Japan usually referred to as North-North trade
Moving to world where South-South commerce (trade between developing countries), and North-South commerce (trade between developed and developing countries), overtaking North-North trade.
While high-income economies accounted for 80% of world trade in 1985, will account for less than 50% by middle of current decade. US, EU and Japan slow to recover, while emerging economies such as China have fueled global recovery
Rise of lower and middle-income countries two decades
in making:
China’s transition accelerated in 1990s
India’s growth surge started after its 1991 reforms Huge global export shock: 1992-2008 average annual growth rate in exports - China (18%) and India (14%). 15 other countries* had annual growth rate in exports of 8% for 1992-2008.
During same period, low and middle-income countries saw share of global exports increase from 21 to 43%.
South-South trade driven by: urbanization and industrialization in China and India creating demand for raw materials.
lengthening of global production networks has resulted in increasing trade in parts and components.
Growth in North-South trade has rekindled interest in orthodox theories of international trade.

For low and middle-income countries, exports as share of regional GDP has grown sharply, e.g., 26 to 55% (low-income), 25 to 55% (middle-income), and 25 to 55% (China and India) – similarly for imports
Lower trade growth for high-income countries, e.g., 17 to 26% in case of exports.
Change in trade pattern involves much larger South-South trade flows over period 1994-2008: share of exports from low to low and middle-income countries rose from 24 to 42%.
share of exports from middle-income to low and middle-income countries rose from 33 to 46%.

Middle-income countries moved from specializing in apparel and footwear in 1994 to electronics by 2008.
Consistent with middle-income countries accumulating human and physical capital pushing them out of labor-intensive into more capital-intensive goods.
Low-income countries such as Bangladesh and Vietnam are filling the space vacated by middle-income countries in apparel.
Large changes in specialization have also occurred in countries such as China.