What are the UK’s major exports and imports? Who are the UK’s major trading partners? What trade theories can explain these patterns?
In order to understand UK’s position in world trade, what its exports and imports are, and which its major trading partners are, the history of its economy and position in world trade has to be contemplated prior. The structure of the British economy has been transforming through time, in addition to the nation’s trade regarding both its goods and services. Britain was the first industrial nation; this explains the dominion it had in world trade. As this is the case, trade theories help explain the nation’s pattern of trade, considering its offer in ...view middle of the document...
(Alford 1996) Every nation would focus in the production of the goods and services for which its factors of production were most appropriate. Australia, Canada, South Africa and New Zealand were key countries in imperial trade which were expanding into practically self-regulating states during the time of trade expansion.
As any other Empire, it was natural of it to fall. Britain required a more rational outlook about this occurring, in order to organize itself properly. In my opinion it was inevitable that the world market share was ultimately lost. Other countries were industrialising and Britain was losing its empire. It was predictable then, that while world trade grew faster, UK’s trade did not. In the first decades of the Twentieth century, Britain lost its leadership in manufacturing production and trade but retained competitive advantage in sufficient industrial sectors to retain strong position in evolving international economy. (Booth 2001)
Following the First World War, trade was usually regulated through bilateral treaties between countries, and most times they had high tariffs and many restrictions. The regulation of international trade was essential after this war, and The General Agreement on Tariffs and Trade (GAAT) came in force in 1947. By the 1950’s the British industry would have faced a problem of import penetration, however, it enjoyed full protection.
Despite the fact that agriculture achieved improvements, these were purchased at an immense cost through colossal domestic subsidies. These enormous costs of following agriculture could have been used in a more functional manner.
After the Second World War, Britain and the USA lobbyist turned their mind to strategies for reconstructing the world economy. They intended to lay the groundwork for a cooperative international economic environment. This agreement envisaged the creation of three key international institutions: The International Monetary Fund, World Bank and the International Trade Organization. (Trebilcock 1995)
At almost every stage of the EU’s evolution, the UK adopted a cautious and hesitant stance, only to decide belatedly that closer involvement would be beneficial. The result has been that during some of the most formative stage in the EU’s development Britain has been on the outside and unable to influence events. (Sawyer 2005) UK preferred trading arrangement with imperial references rather than with developing countries, but it then realized that it would be more convenient to join the multilateral treaties continental Europe was having.
UK’s shifting place in the global economy, showed evident changes in the direction of its trade, as an end result between the late 1950’s and early 1970’s its trade with the ECC practically doubled. North Sea Oil was very important, by the end of the period the ECC was buying two-thirds of Britain’s fuel exports, so trade with oil exporting countries had fallen in a significant manner. This increase...