Dovga J. S., Shkil N. A.

Oles Honchar Dnipropetrovsk National University

THE RELATIONSHIP OF INTERNATIONAL TRADE AND OPENNESS OF THE ECONOMY

Statement of the problem.

International trade is a determinant form of international economic relations. Goods and services trade occupies bigger and bigger role in the world economy. World becomes more and more globalized economically and this creates a tendency for more open economy. Therefore terms "international trade" and "open economy" interweave closely with economic globalization. That is why it is important to link these concepts with each other and with the development of international economic relations.

Relevance of the subject.

International trade promotes the development of world economic globalization, displays the economic level of the country and the potential for cooperation with other states. Therefore, it is relevant to investigate the development of the international trade, to analyse the current situation and examine the level of economies openness.

The main material. International Trade develops under the influence of the leading trends in the world economy which is called globalization. It determines the trade development at the beginning of the XXI century. Modern world trade reached a global scale. During the period from 1948 to 2011 world goods export increased in 329 times that has provided an average annual growth rate by 110%. During 1990–2011 years, the average annual growth rate of export decreased slightly – 108%. Especially from 2001 to 2008 export was growing rapidly, an average annual growth rate of goods export during this period (2001–2008) increased by 115%.

Continuous changing take place in the balance of power among different countries and groups of countries in the world market since the 50-th years in ХХ century. Share of U.S. exports in the global scope steadily decrease.

According to the WTO, America, having in 1948 the largest goods export volume (39,4%) of the world's scope, significantly lost its share by 17% in 2011. Such changes have occurred because of the international trade development in other regions of the world. The volume of U.S. exports grows, but every year the fall of the world export share is observed.

This is due to the development of other economies and the emergence of competitors-producers. First of all it concerns Asia where there are significant changes in a positive way. The share of the world merchandise exports in Asia since 1948 – to 2011 increased from 14% – to 31.1%.

Asian countries have adopted the leading position and showed significant improvement of economies. Chinese played the greatest role in the restructuring of global priorities in the volume of export. This state showed the best positive changes in export and import and since 90s years there has been a significant increase in the share of the world exports (in 1948 it was 0.9% in 1993 – 2.5% and in 2011 – 10.7%).

Now China is the leader in the volume of international trade among all the countries and an example of rapid development and strengthening of the national economy. It shows the influence of improving domestic economy on international activities and strengthening economic relations with other countries. China may be the best example that shows that the world economic globalization is rapidly growing and that international trade has a significant impact on this process.

The volume of world imports of goods has a trend which is similar to exports of individual countries. The difference between imports and exports is well seen in the U.S. Unlike exports, the global share of imports in the U.S. is about the same for 60 years and ranges from 16% to 22%.

It should be also singled out Europe. They play an important role in world exports and imports and occupy the largest share in the world. Europe has more or less stable situation, but in the 1970s, began to reduce its share of the world taking in international trade: exports in 1948 occupied 45.3% in 1973 – 50.9% in 2011. – 37.1%, imports in 1948 occupied 45.3% in 1973 – 53.3% in 2011 – 38 of 1%.

World trade of services also tends to increase. Especially notable were the last 10 years, due to improvement of technology, social networks and transport systems.

Globalization, participation of countries in international relations, and especially international trade make grate affect on the openness and closeness of state. The openness of the economy does not mean the absence of state control and borders, but via-verce the government must control the international activities to provide favorable conditions for the expansion of world economic relations and defend the interests of the country.

That means that state provides greater access of foreign investments to various sectors, industries and economies when the economy is open. In open economy international economic relations increase and the volume of exported and imported goods and services is not controlled.

Thus, considering that international trade at goods and services is one of international economic relations form that’s why its development in the respective country will characterize the openness of the economy.

The degree of openness of the economy is determined by such indicators as export quota (Ek = E / GDP), import quota (I = I / GDP) and foreign trade quota (Fk = Fo / GDP).

The main indicator of economy openness is an export quota as it shows participation and involvement of the country in the global economy.

In 90's export quota in developed countries was only 27% in developing countries – 12%, and in countries with economies in transition – 5.5%. In the 50's – 70's the countries were considered to be open when the foreign trade quota was more than 20%, and in 90 years more than 90%. International world quota in the 90 years was 20%. Now the situation has changed and in 2011 it had reached 37%. At the same time there are countries where foreign quota exceeds 100% (Belarus, Belgium, Cambodia, Congo, Estonia, Iraq, Malaysia, Mongolia, Singapore) and there are very few countries with foreign trade quota lower than 40% (Japan, U.S., Afghanistan Argentina).

Conclusions.

International trade has all favorable conditions for further rapid development. The volume of foreign trade in the poorly developed countries and developing countries is increasing. They establish economic relations with other countries gradually, enter international markets and gain their share in world trade by weakening the leading position in major countries.

Therefore globalization develops, grows rapidly and it is international trade which is the indicator that shows us the best results and impact on this process. In determining the openness of the economy we should take into account such important factors as lack of high import and export restrictions.

So we can conclude that the economies of the world have become more open over the years and this process is accompanied by the strengthening of bilateral relations and increasing flows of goods and services.

With the development of national economies international relations’ develop, the volumes of international trade increases and it is accompanied by the phenomenon of increasing openness of the economy. But the feedback can also be observed here. In other words, countries with open economies weaken their borders, reduce taxes and international trade has a tendency to increase in such a case .