The composition of U.S. - East Asia Trade and changing comparative advantage

Abstract

This paper examines the composition of trade between the United States and eight Asian Pacific economies from 1962 to 1992. Analysis of the time series pattern of individual commodities at the SITC four-digit level reveals economically significant changes in the pattern of trade. These changes reflect changing comparative advantage based on changing factor proportions, technology transfer and product cycles. The changing composition of the eight bilateral trade relationships shows both increasing specialization and a sequence from Japan to the four tigers, Korea, Taiwan, Singapore and Hong Kong, and then to the remaining three East Asian economies, Malaysia, Indonesia and Thailand. Surprisingly, none of the four tigers or Japan reverses unskilled labor-intensive trade deficits in significant dollar volume share before going on to reverse human capital-intensive and technology-intensive trade deficits with the U.S. Show more