The Tendency towards Regionalization in International Trade 1928–1956

240 Pages·1959·8.522 MB·English

by  Erik Thorbecke (auth.)

MARTINUS NUHOFF PUBLISHER THE HAGUE
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duction - Les caracteres du sous-develop facilitates their use.
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standard case laws. The lucid exposition of
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Indices.
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THE TENDENCY
TOWARDS
REGIONALIZATION
IN
INTERNATIONAL TRADE
1928- 1956
BY
ERIK THORBECKE
Assistant Professor of Economics
Iowa State University
WITH A FOREWORD BY
J. B. CONDLIFFE
Profissor of Economics, Emeritus
University of California
EXIRA
MATERIALS
extras.springer.com
•
Springer-Science+Business Media, B.V.
MARTINUS NIJHOFF - PUBLISHER - THE HAGUE
The main purpose of this book is the analysis of one of the major
developments in the pattern of world trade between 1928 and 1956.
It continues the empirical work undertaken by Folke Hilgerdt for
the League of Nations. Particularly after the Second World War
there was a significant relative increase in trade among countries
forming the major blocs: the Sterling Area, the Continental O.E.E.C.
Bloc, and the Dollar Area. In 1956 almost half of the free world
trade by value consisted of regional trading in the sense of trade
within these blocs. This compared with about one-third in 1928.
A corollary to regionalization was the rise in the proportion of trade
settled multilaterally within the Continental O.E.E.C. Bloc and the
Sterling Area, at the expense of interb loc settlement.
The forces that were most responsible for the rise of intra trade
within the individual blocs differed from one bloc to another, and
from one time span to another. Professor Thorbecke shows, however,
that political factors apparently were instrumental in bringing about
this tendency in the thirties. The causes that had the greatest impact
on regionalization during and after World War II seem to have been
certain structural changes in the American demand for imports
in the case of the Dollar Area, and in commercial policy, monetary
arrangements and stability considerations in the case of both the
Sterling Area and the Continental O.E.E.C. Bloc.
For analytical purposes, this study divides the free world into ten
areas: Continental Europe, the United Kingdom, the United States,
Canada, Latin America, Asia, Japan, Oceania, Africa, and the
Middle East. It proved possible to fit all but Japan, the Middle
East, and the Union of South Africa into an essentially circular
pattern of trade balances for 1953 and 1956 that contrasts significant
ly with the pattern developed by Folke Hilgerdt for 1928 and 1938.
The first chapter of Part I reviews the major shifts in the structure
of world trade. Chapter II is a general reference section, in which
the regional distribution of merchandise imports and exports and
the balance of trade pattern is given for each area vis-a-vis all
other regions for a number of selected years covering the period
1928-1956. Chapter III analyzes the developments in the system of
multilateral trade over the last thirty years. The present system of
multilateral trade is set forth and compared with the interwar system.
MARTINUS NIJHOFF -- PUBLISHER - THE HAGUE
Part II is devoted to the empirical verification of the tendency
towards trade regionalization per se for the three above-mentioned
blocs. The structural changes in the trade flows which contributed
to this tendency as well as the factors - geographical, economic,
monetary and poli~ical - which appeared to have played a causal
role in bringing about this trend are discussed independently for
each area. Furthermore the intra-area trade pattern which pre
vailed in the fifties is contrasted with the interwar pattern in "order
to estimate the proportion of trade multilaterally settled within the
three trading spheres. The concluding chapter, besides summarizing
the essence of the work, examines some of the welfare implications
and evaluates the future prospects of economic regionalism.
1960. XIII and 223 pages. With 61 tables and 5 diagrams.
roy. 8vo. Cloth Guilders 25.-
About the author
ERIK THORBECKE, born February I, 1929, Berlin, Germany. Nationality: Dutch
citizen. Permanent residence status in U.S.A. Education: 1939-47 International School,
Geneva, Switzerland; 1948-51 Netherlands School of Economics, Rotterdam (Pro
paedeutical Examination); 1951-52 Emory University, Georgia; 1952-57 University
of California, Berkeley (Ph.D. 1957). Fields of Specialization: International Economics,
Money and Banking, Economic Development. Teaching and Other Experience: 1952-53
ResearchAsst. in Intern. Economics, under Professor J.B. Condliffe for the Ford Foun
dation; 1954-57 Teaching Asst., University of California; Summers 1956, '57, & '58
. Lecturer, International Economics, Monterey Institute of Foreign Studies; since
1957J Asst. Professor, Iowa State University, Ames, Iowa, teaching International
Economics, Advanced International Economics (graduate course), Intermediate Eco
nomic Theory (2 quarter sequence), Principles of Economics; starting in the Fall of
1959, in charge (jointly with Dr. Karl A. Fox) of a Workshop (Graduate Research
Seminar) in Economic Policy operated under a Ford Foundation grant.
THE TENDENCY TOWARDS REGIONALIZATION
IN INTERNATIONAL TRADE
1928-1956
THE TENDENCY
TOWARDS
REGIONALIZATION
IN
INTERNATIONAL TRADE
1928-1956
BY
ERIK THORBECKE
Assistant Professor of Economics
Iowa State Universiry
WITH A FOREWORD BY
J. B. CONDLIFF E
Professor of Economics, Emeritus
Universiry of California
•
Springer-Science+Business Media, B.V. 1960
Additional material to this book can be downloaded from http://extras.springer.com.
ISBN 978-94-015-0424-9 ISBN 978-94-015-1053-0 (eBook)
DOl 10.1007/978-94-015-1053-0
COPY,ight 1959 by Springer Science +B usiness Media Dordrecht
All rights reseroed, including the ,ight to translate or to
reproduce this book or pa,ts thereof in any form
Originally published by Martinus NijhajJ, The Hague, Netherlands in 1959.
Softcover reprint oft he hardcover 1st edition 1959
FOREWORD
Professor Erik Thorbecke's study, here published, continues the
empirical work undertaken by Folke Hilgerdt for the League of
Nations. It is a study of actual trade and payments derived
laboriously from the voluminous statistical data published by
national governments and international institutions. The col
lection, analysis and interpretation of this mass of data involved
much patient industry, but in the process of brooding over the
detail a truer understanding of the complex structure of world
trade was gained than could be achieved in any other way.
Trade of course is nearly always bilateral. When goods are
re-exported they are, for the most part, refashioned and changed
into essentially new utilities. What is multilateral or bilateral
or regional in a system of international trade is the method of
payment. The justification for multilateralism is the opportunity
it affords for countries to specialize, so that one country may
use the foreign exchange earned by its exports to buy imports
from a third country. Indeed this statement in terms of countries
obscures the ultimate realities. In a free multilateral system it is
individuals who import and export. When they can freely buy
and sell the foreign exchange acquired or required for their
transactions, payments are multilateral and the network of trade
extends widely across political boundaries.
What Mr. Thorbecke shows is that political controls of pay
ments have confined more trade within restricted channels. In
1928 about one third of the world's trade (by value) was carried
on within regional groups. In 1954 the proportion was nearly
one half.
These regional groups are political, not geographic regions - the
Sterling Area which has units all over the world; the Continental
O. E. E. C. Bloc served until recently by the European Payments
Union; the so-called Dollar Area, not organized, but nevertheless
grouped around the United States. It has become easier to make
payments within such groupings and more difficult to make them
across their regional boundaries.
It is true that an effort was made to keep open the possibilities
of freer international payments. The Sterling Area (not just the
United Kingdom) was a member of the European Payments
VI FOREWORD
Union and there were other links between the groups. Neverthe
less it was not possible to fit all trading countries into a neat
pattern of payments. The circuit could be closed only if some
quite important trading areas - Japan, the Middle East and
the Union of South Africa - were excluded from the calculations.
The postwar system of payments was in fact neither complete
nor permanent. It is already giving way to a wider multilateral
ism. The E. P. U. has disappeared; Continental Europe becomes
less dependent upon the United States and strong enough to
take substantial steps towards convertibility.
Of course, the payment circuit was completed, even in the
difficult years immediately following the war. A large volume of
grants and loans from the United States injected a surprisingly
steady flow of dollars into the system. Not all the profits from
oil were drawn out - indeed the dividends paid bore a direct
relation year by year to the amount of oil the United States
was willing to import. The gold of South Africa was paid for
partly by heavy investment, as was the oil, though in a less
direct way.
Regional transfers, therefore, while perhaps unavoidable and
better than nothing in an emergency are at best only a substitute
for a truly multilateral system of payments. They served their
time and those who organized them did so in an effort to achieve
as great a measure of multilateralism as possible. But at best
they could be only a bridge towards a more satisfactory world
wide payments system.
These reflections on Mr. Thorbecke's study cannot do justice
to a painstaking and illuminating piece of analyc;is, soundly
based on actual transactions but informed by an understanding
of the true relationships of trade and payments. We need more
studies of actual economic processes, more measurement of the
living and functioning realities of the trading world, more know
ledge of the physiology of the economic system in operation. It
is as a contribution to such knowledge that Mr. Thorbecke's
work is valuable.
J. B. CONDLIFFE
Berkeley, California
January 1959