Is There a ‘New’ International Division of Labour? Evidence from the EU 1995-2005

Abstract:     
This paper seeks to explore the level of integration of EU manufacturing industry and changes over time through an analysis of trade figures. Deconstructing the extent to which EU trade is part of the broader international division of labour rather than an exchange of finished goods helps us to understand the EU’s place in that division and developments over time. The figures presented in this paper do not indicate that there has been a major increase in de-localisation of production in the EU, at least in terms of intermediate goods. Overall the importance of intermediates in trade has fallen slightly for the EU as a whole, although this is not the case for all member states – several new member states have seen increases, as has Germany. Thus rather than changes in the overall integration of production, we have witnessed changes in the nature of that integration, particularly for, and in relation to, the 10 new member states (EU10). There is evidence that the EU10 have become more important as a source of intermediate goods for the ‘old’ member states (EU15), in particular in up market and medium tech goods. In addition, the EU10 themselves are increasingly expanding their sourcing both within and beyond the EU.

Number of Pages in PDF File: 24

Keywords: EU, trade, intermediate products

JEL Classification: F10, F14, F15

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