FACT: Trade in 2022: $32 trillion in exports, in a $100 trillion world economy.

THE NUMBERS: U.S. shares of world exports* –

2022:   7.8% of manufacturing, 12.7% services, 9.6% agriculture, 8.5% fuels & mining
2017:    9.4% of manufacturing, 14.4% services, 9.8% agriculture, 6.7% fuels & mining

* Data from the WTO’s annual World Trade Statistical Review reports, 2023 and 2018.

WHAT THEY MEAN:

The International Monetary Fund’s most recent World Economic Outlook, launched last Thursday, reports that in 2022, the world’s GDP topped eleven digits for the first time to reach $100.1 trillion. The WTO’s latest World Trade Statistical Review report, meanwhile, shows exports of goods in 2022 at $24.9 trillion and exports of services at $7.0 trillion. Combining the two, this means $31.9 billion, and a matching 31.9% of world output, crossed borders. This is high in historical terms — possibly the highest export-share-of-GDP ever — reflecting the energy price spike caused by Russia’s war on Ukraine along with post-COVID surge in shopping for consumer goods, reviving travel and transport services, high farm prices, and probably some acceleration of trade integration in Asia.  A table of these totals in the recent past and the last two decades:

2022:        31.9%
2021:        29.4%
2020:       26.5%
2019:        28.6%
2017:        28.4%
2012:        29.6%
2002:       22.4%

Tentative conclusion: The high 2022 export-to-GDP ratio probably reflects some temporary factors; in particular, without the energy price spike it would have been somewhere around 29%. But it also suggests that at least so far, the trade conflicts of the past five years haven’t very fundamentally changed trade flows.

Three closer-level looks — at products and “sectors,” countries, and the United States — offer some backup to this general conclusion, but also suggest areas where flows have at least shifted course:

Products: The largest single chunk of world exports is in manufacturing, which in 2022 accounted for $15.3 trillion, or about 48% of all world exports, slightly below the 52% of pre-pandemic 2019. The $15.3 value nearly equals the roughly $17 trillion in world manufacturing output; top exports were $3 trillion in chemicals, $2.5 trillion in IT goods, and $1.5 trillion in autos and auto parts. In second place comes $5.1 trillion in energy and mining, where the supply shock caused by the war nearly doubled trade value from 2017’s $2.63 trillion. Then came $3.3 trillion in digitally deliverable services ranging from entertainment and media to finance, software, gaming, air and hotel reservations, and so on; $2.3 trillion in food and farm goods; $1.5 trillion in miscellaneous goods-trade categories such as scrap metal, small-scale parcel deliveries, and returned purchases; and $1.4 trillion in transport and travel services.

So: Assuming the high energy prices were temporary, little about the world “traded-product” mix changed very much in the last five years.

Countries: The countries at the top of the WTO’s export rankings also remained pretty stable.  The largest single block of merchandise trade was either (a) the European Union’s $5.4 trillion in manufacturing exports (which is shaky as it counts $3.25 trillion in trade among the 27 EU members as well as $2.14 trillion from the EU to other countries), or (b) if you take the EU as a lot of individual countries rather than one big economy, China’s $3.3 trillion in manufactures. Counting down from this, the WTO’s rankings of “top exporters” and ‘top importers’ haven’t changed very much in any of the big product divisions. The top six manufacturing exporters in 2022 – China, EU-as-a-single-economy, the U.S., Japan, Korea, Mexico – are identical to the top six of 2017, though Taiwan and Singapore swap 7th and 8th place, and Vietnam replaces Canada in tenth. In agriculture, likewise, the top six exporters are identical, though Thailand jumps over Mexico and Australia to place 7th. Rankings in “fuels and mining” (which in WTO argot includes metal ores) have changed most¸ with the U.S. climbing past Saudi Arabia and Russia to become the top exporter.

Hmm: Despite the “301” tariffs the Trump administration placed on most Chinese goods in 2018 and early 2019, China’s #1 share of world manufacturing exports rose from 17.8% to 21.7%. The U.S. held its #2 manufacturing rank, but the American share of manufacturing exports shrank from 9.4% to 7.8%.

The U.S.: How did the U.S. fare as all this proceeded?  From 2017 to 2022, the U.S. held its second-place share as a goods exporter, lengthened its lead as the world’s top goods importer, and remained the top services trader.  So to date — despite “301” and “232” tariffs, withdrawal from the Trans-Pacific Partnership Agreement, renegotiation of the North American Free Trade Agreement, sanctions on Russia, and a battery of new export controls — no very revolutionary changes in the actual U.S. world role.  A slightly more granular level, though, reveals some shifts:

1.  U.S. export economy is a bit smaller and more concentrated in energy: The U.S. export economy shrank a bit (in relative terms), from 12.2% of GDP in 2017 to 11.6% in 2022. Meanwhile, the Census’ count of U.S. exporting businesses fell from 290,600 in 2017 to (a preliminary) 279,000 in 2022. Energy exports however jumped from a historically very high 9.1% of total exports in 2017 – $141 billion of $1547 billion – to an all-time record 18.2% in 2022, or $380 billion of $2086 billion. Mirroring these domestic figures, the WTO finds the U.S. with a lower share of world manufacturing exports and a higher share of energy.  Overall, then, not a very inspiring result.  One explanation is benign: heavy stimulus spending causing a consumer boom and diverting exports to domestic customers.  Another is less encouraging: an unanticipated effect of tariffs, as the “301” and “232” tariffs imposed in 2018 and 2019 fell heavily on industrial inputs, and thus likely raised U.S. factory costs and eroded competitiveness, especially as Asian countries continued to cut tariffs on one another’s goods.

2.  Americans import more, especially in manufacturing: Imports, by contrast, rose from 14.9% of U.S. GDP to 15.4%.  This is the highest import share since 2014. Most of the jump reflects a post-pandemic surge in import of manufactured goods, which rose in dollar terms by $740 billion from the levels of 2014.  Mirroring this rise, the WTO tables show Americans buying 14.1% of world manufactured exports in 2017, and 15.7% in 2022. With exports only up $70 billion, the Trump administration’s pledge to reduce U.S. manufacturing trade deficits ended with a comically perverse doubling of the sectoral deficit from -$648 billion in 2016 to -$1.3 trillion in 2022.

3.  Less from China, more from Vietnam and Mexico: Within the totals, though, U.S. sourcing has shifted noticeably.  China’s share of U.S. imports, at 21.6% in 2017, fell to 16.3% in 2022; Vietnam and Mexico, and secondarily India and other ASEAN countries, picked up most of the roughly $150 billion in diverted imports.  In 2023 (based on the Census figures complete through last August) this drop accelerated, with China falling behind both Mexico and Canada as U.S. import sources.  This noted, China’s higher share of worldwide manufacturing exports suggests that (a) Chinese firms were able to replace lost U.S. customers with sales elsewhere, and/or (b) some of China’s diminishing share of American imports reflects shifts of final assembly to other middle-income countries, in which case China would be exporting components and parts to factories abroad and the U.S. still the final buyer.  See below, though, for a third possibility — the early stages of vaguely geopolitical “trade blocs” — suggested by WTO economists this month.

FURTHER READING

The WTO’s annual World Trade Statistical Review back to 2015, with links to the earlier “International Trade Statistics” yearbooks from 2000 to 2014.

… An accompanying WTO staff report, Global Trade Outlook and Statistics, looks around at 2023 and ahead to 2024, and predicts slower trade growth for the next year and a half. Under the heading “Evidence of Fragmentation” (pg. 12), the authors see initial signs of that trade flows may be beginning to reflect “geopolitical blocs”:

Economic and political tensions between the United States and China — the world’s two largest economies – have been building for several years, leading to the imposition of numerous tariffs. These measures have sparked some changes in international trading patterns, but evidence that they have thrown globalization into reverse remains limited.  …

Changes in trade shares along geopolitical lines are also discernible in recent data. For example, US trade in parts and components with politically like-minded countries as measured by UN voting patterns fell from 77% before the pandemic in 2019 to 73% afterwards in 2020. This share then rose to 74% in 2022 and finally back to 77% in 2023. While this could be a sign of supply chains shifting for geopolitical reasons, it could also simply be a reversion to pre-pandemic production patterns.

… and thoughts on it all from WTO Chief Economist Ralph Ossa.

And for context, the IMF’s just-updated World Economic Outlook database.

U.S. data:

Census’ monthly summaries of imports, exports, and balances.

… or by country (goods only).

And the Bureau of Economic Analysis has GDP breakdowns, services trade, and more.

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.

Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank Progressive Economy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.

Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007).  He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.

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FACT: Florida green turtle nesting counts up 80-fold since the 1970s.

THE NUMBERS: Green turtle nest counts at 27 Florida “core index beaches” –

2022-2023      ~40,000 nests?
2020-2021      ~23,000 nests
2010-2011        ~10,000 nests
2000-2001      ~4,000 nests
1990-1991         ~1,000 nests
1980s                ~500 nests

* Florida Wildlife Commission, using two-year averages as green turtle nesting totals appear to vary in a two-year cycle. These are not total statewide (or U.S.) nesting estimates, but counts of nesting at 27 long-studied beaches, making up a representative sample of known Florida nesting beaches. Total nest counts in 2022 were 37,000 

WHAT THEY MEAN:

Here’s 17th-century British navigator/pirate/early naturalist William Dampier, on the Caribbean’s vast green turtle flotillas and the swarms of fish traveling in their wake:

“I heard of a monstrous green turtle once taken at Port Royal in the Bay of Campeachy [ed. note: then the capital of Jamaica] that was four foot deep from the back to the belly, and the belly six foot broad.  … [M]ultitudes of Turtles go from their common places of feeding and abode, to those laying eggs:  and at the time the Turtle resort to these places to lay their Eggs, they are accompanied by abundance of Fish, especially Sharks; the places that the Turtle then leave being at that time destitute of Fish, which follow the Turtle.”

By the mid-20th century the “multitudes of turtles” were nearly gone. When Florida wildlife staff began counting green turtle nests in the 1970s, they found only about 500 each year and sometimes fewer. NOAA’s unhappy summary reports a “catastrophic global decline of the species” with six causes: (a) “by-catch,” as turtles drown in nets towed by shrimp boats; (2) direct hunting, taking green turtles “in extraordinarily high numbers for their fat, meat, and eggs”; (3) loss of nesting grounds, through beach erosion, seawall construction, and bright hotel lighting that deter night-time nesting; (4) collisions with boats close to shore; (5) ocean pollution, in particular plastics and balloons; and most recently (6) climate change and warming ocean temperatures.  The green turtles’ decline is typical: the International Union for the Conservation of Nature lists all seven sea turtle species — greens, loggerheads, leatherbacks, Kemp’s Ridleys, olive Ridleys, flatbacks, hawksbills — as either “threatened,” “endangered,” or “critically endangered.”

Some of these threats — floating plastics, warming water — are daunting, global-scale issues.  Others seem cheap and simple to fix.  Most countries, including the U.S., have banned turtle hunting for food and jewelry, and excluded turtle products from international trade in 1977 through the Convention on International Trade in Endangered Species.  Congress in 1987 adopted a law requiring shrimp boats serving the U.S. — whether local or foreign — to equip their nets with “Turtle Exclusion Devices,” which are metal grilles with holes allowing unintentionally trapped turtles to swim out of the nets, costing $325-$550 each.  (See below for the WTO’s record of a celebrated U.S.-Mexico trade dispute over the application of this regulation to foreign boats, which the panels eventually decided in favor of the U.S.) And the Florida government under Gov. Lawton Chiles in 1991, meanwhile, imposed beach protection rules and night-time blackouts during nesting months.

A generation later, these cheap and simple fixes look like they’ve worked.  Florida’s green turtle nesting counts, measured in two-year cycles, show very strong recovery.  The Florida Wildlife Commission’s most recent report, out early this year, shows an 80-fold increase in nesting counts since the early 1980s: a few hundred a year then, about 40,000 per year in 2021 and 2022. The official count for the 2023 nesting season won’t come out until early 2024, but individual beach counts suggest a boom year with as many as 70,000 nests.  Nor again are green turtles unique; populations of the smaller and rarer Kemp’s Ridley turtle in Mexico has also rebounded, and the U.S Fish and Wildlife Service has successfully started a new Texas nesting ground.

Not yet anything on the scale of Dampier’s “multitudes”, of course.  And looking ahead, the challenges of floating plastics and warming water aren’t simply and probably won’t be cheap.  But nonetheless, after many bad decades. the turtles have had a few good ones.

FURTHER READING

Dampier’s A New Voyage Round the World (1699, Chapter 5) recalls the massive Caribbean turtle populations of the 17th century.

NOAA’s sad review of their 20th-century decline.

The Palm Beach Post reports a boom nesting season for 2023.

And the Florida Wildlife Commission reports on nesting totals for five turtle species at “index beaches” from 1989 forward.

Another example: 

The Kemp’s Ridley turtle, a smaller species that is unique as a daytime nester, is the world’s most endangered turtle. Until recently, Kemp’s Ridleys nested only on three stretches of beach in Tamaulipas (Mexican Gulf Coast, just south of Texas), and are thus especially vulnerable to oil spills and habitat loss. KR nest counts declined by over 99% in the later 20th century, from 30,000-40,000 recorded in a 1947 count to 702 in 1985. Since then totals have rebounded to about 9,000 per year in Mexico, and the U.S. Fish and Wildlife Service has created a second nesting site on Padre Island in Texas, whose nest counts are up from an initial 7 to 353 last year. Background from FWS.

Policy: 

The CITES (Convention on the International Trade in Endangered Species) homepage.

The State Department explains shrimping import and turtle conservation rules.

And the WTO’s record of “DS-58,” a five-year case eventually validating the U.S.’ application of TED requirements to foreign shrimping boats.

And some work to do in Asia, with some very modern advice from the classics: 

CITES Secretariat (2019) reports persistent illegal turtle trade in Southeast Asia.

And proto-conservationist Mencius, somewhere around 320 BC near present-day Kaifeng, has TED-like advice for King Hui of Liang:

“If you ban nets with fine mesh from ponds, there will be more fish and turtles than the people can eat.  If you ban axes from the forests on the hillsides except in the proper season, there will be more timber than the people can use.”  

Mencius, with the passage on nets, excluder devices, and turtles in Chapter A3.

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.

Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank Progressive Economy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.

Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007).  He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.

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FACT: The U.S. does 28% of the world’s scientific research and development spending.

THE NUMBERS: R&D spending, 2020* –

* National Science Foundation estimates, 2022
** Estimate from 2022; 2023 likely will revise this downward.

WHAT THEY MEAN:

The National Science Foundation’s most recent tally of research spending around the world, published early in 2022, calculated in “purchasing-power parities,”* estimated about $2.4 trillion worth of science in 2019. The IMF’s guess at the 2019 world economy meanwhile (also using the PPP-basis option so as to match NSF’s R&D figure) was $138 trillion. So that year, $1.70 of each $100 of world income went back to labs to design quantum computers and write up artificial intelligence programs, give the last touches to the Webb telescope and open the first analyses of the COVID-19 virus, design new biotech crops, finance robot-sub dives to deep-sea black smokers, and work up ancient-DNA investigations of Neanderthal origins.

Dividing the $2.4 trillion global figure into country-by-country totals requires some social science best-guesses and adjustments to later revisions. For example, NSF put China’s R&D spending at $526 billion in 2019.  The OECD, though, has China at $465 billion in 2018 and hasn’t yet guessed at 2019. Meanwhile, if Chinese science is getting revised a bit down, the Brits have been scaled up. The NSF’s first guess for the U.K. in 2019 was a deflating $57 billion, putting the land of Darwin & Newton, Berners-Lee & Hawking, etc. at par with India and well below the $74 billion for France.  They’ve now recalculated and gotten something closer to $90 billion. But understanding there’s some blurriness around the edges, here are three big-picture perspectives as of 2019:

Largest R&D Centers: Five countries put more than $100 billion a year into science. The U.S. was top at $668 billion (and per NSF, ratcheted up to $717 billion in 2021 and a likely $792 billion in 2022). American science accordingly made up 28%, or somewhat more than a quarter, of all world research spending – nearly twice the U.S.’ 15.8% share of world PPP-basis GDP, and seven times its 4% share of world population. China was second at $526 billion and 22% of world R&D, followed by Japan at $173 billion, Germany at $148 billion, and South Korea at $102 billion. Together these five countries accounted for two-thirds of all world R&D spending. Adding France and the UK brings the total near three-quarters of the world total.

West & Rest: Traditional ‘western’, ‘developed’ countries account for over three-fifths of world science. Combining the NSF’s estimate for the U.S. with those for Japan, Korea, the 27 EU members, the UK, Switzerland, Norway, Israel, Taiwan, Canada, Australia, and New Zealand, yields a total of $1.5 trillion, exactly five-eighths of the $2.4 trillion worldwide total.  China, whether at $526 billion or somewhere in the $500 billion range, is the secondary pole at 22%. The remaining 150 countries — all of Latin America, the Middle East, Southeast Asia, and Africa — together put about $400 billion into science each year. A Korea-like $135 billion comes from the nine non-Chinese big-population BRICS members and invitees (Brazil, Russia, India, South Africa, Egypt, Iran, United Arab Emirates, Saudi Arabia, and Ethiopia). The remaining 120 provide $240 billion and 10% of the world total.

Most “Research-Intensive”: Dropping total-dollar figures and instead looking at research spending relative to national economies, the R&D shares of GDP in the world’s most research-intensive economies, and in nine of the world’s ten largest countries by population,** look like this:

And a Bit More: Brazil is the top Latin American research power, with $36 billion and 1.2% of GDP.  India has a very large dollar-value R&D program at $59 billion, eighth in the world after the U.K. and France. Indian science, though, remains modest as a 0.65% share of GDP. This is somewhat below the 1.6% average for middle-income countries. Russia had about the same total-dollar investment as Taiwan at $44.5 billion in 2019 (though it’s presumably lower now); relative to GDP, its 1.04% was about the same as Turkey’s R&D intensity. Thailand is ASEAN’s top researcher in dollar terms at $12 billion or 1.0% of GDP; relative to GDP, though, Singapore leads at 1.8%.

* The two common calculations of GDP are “exchange-rate basis,” and “purchasing-power parities.” The PPP-basis gives larger figures for developing countries, as it attempts to equalize prices paid for services.  Both have advantages and disadvantages; we’re using PPP here as that’s how NSF estimated science spending.
** Unfortunately missing #8 by population, not because we forgot Bangladesh, but as NSF hasn’t done an R&D estimate for them.

FURTHER READING

Data: 

The National Science Foundation’s R&D by country figures.

More NSF comparisons.

OECD’s data on R&D spending in total and relative to GDP, plus counts of scientists and publications, etc., for the 37-country OECD membership plus China, Taiwan, Russia, Argentina, Singapore, Romania, and South Africa.

The World Bank’s table of R&D/GDP shares by country, region, income level, etc., from the 1990s to the present.

And a bit on American science: 

U.S. spending leads the world in raw dollars, and ranks a strong seventh worldwide as a share of GDP. The U.S.’ relative weak spot is in big-picture, basic science, government-funded science. U.S. government-funded R&D is traditionally more focused on basic science with potential big returns in knowledge and innovation but not necessarily a near-term commercial payoff than the business sector’s work.  Though not small, this government commitment has (a) drifted down relative to U.S. GDP, from around 1.0% of GDP in the 1960s and 1970s to 0.5% more recently, and (b) dropped from 30% to 19% of U.S. research funding between 2011 and 2021.

Vannevar Bush’s 1945 “Endless Frontier” report to the Truman administration makes the classic case for public commitment to science.

PPI budget sages Ben Ritz and Brendan McDermott, 80 years later, have ideas for reviving public investment.

… and from Ritz and Stephen Verrall last month, Congress post-“CHIPs and Science” bill takes an ill-advised U-turn on the larger science budget.

And a Biden science boom? NSF’s estimates of a $124 billion Biden-era surge in research spending since 2020 ($668 billion in 2020, $792 billion in 2022) is a first estimate, with some future adjustments likely.  (And note that $105 billion of the estimate reflects new business spending.)  Nonetheless, an entirely different line of data suggests this is real.  The Bureau of Labor Statistics’ monthly figures for R&D employment show a net gain of 150,000 R&D jobs — from 795,000 to 946,000 — from January 2021 to August 2023. By comparison, the 20-year growth total from 2000 through 2020 was 250,000 new R&D jobs. BLS’ (very detailed) R&D employment page.

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.

Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank Progressive Economy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.

Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007).  He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.

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