Data Shows Japan Less Reliant On Exports Than Commonly Thought
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The Japanese economy is not as reliant on exports as is widely believed, data from the World Trade Organization and the International Monetary Fund shows.
Japan’s dependence on exports rose to a record level in 2007, with exports accounting for 16.3% of nominal gross domestic product — up 1.5 percentage points from a year earlier. But the figure is still lower than those of its peers in the Group of Seven industrialized nations, except for the U.S.
Based on data compiled by the WTO and the IMF, Japan’s ratio of exports in its nominal GDP came to roughly 15% in 2006. Only the U.S. beats this number, at 7.9%. And the G-7 average is 22%.
Reliance on exports has also been increasing in many other countries. But most of them have been steadily growing both nominal GDP and exports, while only exports have been rising in Japan. According to WTO data, Japan’s export growth rate averaged 5.8% between 2001 and 2006, compared with the 7.7% of the G-7 countries.
Exports have been climbing much faster in the BRICs: Brazil, Russia, India and China. Singapore and Thailand have garnered even higher annual growth rates of 10% or more.
The gap between these nations and Japan likely stems from Japan’s slow progress in securing free trade and economic partnership agreements.
While a variety of economic cooperation agreements have been signed in Europe, North America and Asia, Japan has concluded deals with just eight countries, among them Mexico and Chile.
This delay — due largely to Japan’s reluctance to open up its inefficient agricultural sector to foreign competition — has prevented the country from fully reaping the fruits of globalization despite the widely held view that Japan is extremely dependent on trade.
Filed by Anita Li under Multilateral Trade, Investment and Competition Policy