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# III. THE EC, THE UNITED STATES AND JAPAN IN COMPARISON.

16. In 1980, manufactures imports amounted to 4.8% of CDP and to 19.3% of manufacturing production in the US, and to 4.7% of GDP and 15.6% of manufacturing production in the EC. Given the larger sizes of the EC GDP and manufacturing sector, the degrees of openness were quite comparable.

17. US import ratios rose more sharply during the decade, to 7 percent of GDP against the Community's 6%. Two thirds of Canada's manufactures trade is with the United States, a higher ratio than that of intra-EC over total imports of EC members. Considering North America as a single zone reduces the 1990 North American ratio to 5.2 percent, for a GDP similar in size to the EC's; a decade earlier, the North American ratio was significantly lower than the EC's. The contrast relative to manufacturing production is even sharper, as the US import ratio doubled over the decade, to over 40 percent. The same ratio also doubled for North America as a vWhole, rising from 16 **to** almost 35 percent. Meanwhile, the ratio of manufactures imports to manufacturing production rose to 25 percent in the EC.

18. As Table 2 shows, manufactures imports into the US increased extraordinarily fast during this period, by more than 200% in value (the rise in Canada was a more sedate 125%). The United States also stands out in a different way, iy the contrast between the fast rise in its manufactures imports and the slow rise in its manufacturing production. In dollar value, US GDP doubled during the decade (a greater increase than the OECD average), manufacturing production (value added) rose by a mere 43% (less than the OCDE average) and manufacturing imports trebled.

19. able 2 brings out major changes in the relationships of imports and exports to each other and **to** manufacturing production in selected industrial countries. In most, the share of manufacturing in GDP fell during the 1980s. This was due more to supply than to demand conditions, as is shown by steep increases in manufactures imports. These were usually very large relative to the base year value of manufacturing production, and also relative to the increase in the value of manufacturing production during the period. All but three countries also show a reduction in their net manufactures export surplus. The US shares these syndromes fully, but not to an exceptional extent. Even the increase in its manufactures trade deficit by a quarter of its original manufactures production is exceeded by the U. K. and probably by Spain. One after another traditional "industrial countries", long net exporters of manufactures, turned into net importers. Such large import increases combined with deteriorating trade balances in manufactures signal difficult adaptation problems in the manufacturing sectors, and may well have contributed to them.

20. Three of the sample countries stand out as exceptions to the general tendency: Italy and, most strongly, Germany and Japan. Their manufactures imports also rose faster than production and exports; indeed, Japan's manufactures imports rose 2.4 times faster than its exports, the highest such ratio for the sample countries. However, their manufactures export surpluses at the beginning of the period were so high that they actually increased in absolute dollar values.