IMBALANCE IN EU TRADE WITH SELECTED ASIAN ECONOMIES – A COMPARATIVE ANALYSIS BASED ON GROSS EXPORTS AND DOMESTIC VALUE-ADDED

Abstract

The European Union has a chronic trade deficit with Asia, the majority of which is with certain countries in East and South-East Asia. This conclusion is based on traditional international trade statistics. However, the international fragmentation of production processes and the new method of measuring trade by value-added are now making trade analysis closer to reality, allowing for more accurate conclusions to be drawn.This article’s main aim is to analyze and evaluate the EU’s trade imbalance with Asia and selected Asian economies, which is found in both traditional (gross) and new (value-added) international trade statistics. The analysis shows that the degree of trade imbalances concerning partners and groups of goods differs depending on the method of analysis. In the case of EU-Asian trade relations, imbalances do exist, but they generally show smaller deficits or surpluses when measured in value-added terms. The availability of statistical data determined the time and geographical scope of the study. The analysis covers the EU28’s trade with 15 Asian countries from 1995 to 2018, with a particular focus on China, Japan, and South Korea. The study applies a critical literature review, the descriptive-analytical method, and the method of inference based on statistical data obtained from international databases (Eurostat, OECD-WTO, and UNCTAD).