# **Table of Contents**

|**1.**<br>INTRODUCTION<br>.......................................................<br>1|
|---|
|2.<br>EMPIRICAL ISSUES INVOLVED IN ANALYSIS OF TRADE DRIVEN BY INTRA-PRODUCT<br>SPECIALIZATION3|
|3.<br>CEECs TRADEIN PARTS........................................................<br>**9**|
|_3.1. Significance of parts in CEEC trade ........................................................_<br>_9_|
|_3.2. Growth of trade in parts ........................................................_<br>_10_|
|_3.3. Composition_**_of_**_trade in parts ........................................................_<br>_12_|
|_3.4. Geographic patterns: thee EUas a hub? ........................................................_<br>_15_|
|_3.5. Country patterns in trade in parts with the EU ......................................................._<br>_20_|
|4.<br>COMPARATIVE ADVANTAGE IN PARTS .......................................................<br>23|
|_4.1. Change in Comparative Advantage: an overview ......................................................._<br>_25_|
|_4.2. RCA indices: the scope of specialization in trade with the EU ...................................................._<br>_26_|
|_4.3. Specialization and trade in parts ......................................................._<br>_28_|
|_4.4. Concluding comment ........................................................_<br>_29_|
|5.<br>INTEGRATION<br>INTOEUPRODUCTION<br>SHARING ARRANGEMENTS<br>.................................................... 30|
|_5.1. Horizontal Trade Specialization ......................................................._<br>_30_|
|_5.2. Integration into global networks ofproduction and marketing ..................................................._<br>_32_|
|_5.3 Automotive network ......................................................._<br>_34_|
|_5.4. Information revolution' networks: offlice equipment and telecommunications_<br>_............ ................_<br>_40_|
|_5.5. Outsourcing: furniture ........................................................_<br>_47_|
|6. 'NETWORKS' AND OTHER PRODUCTION<br>SHARING ARRANGEMENTS<br>IN EU-CEEC TRADE.48|
|CONCLUSION<br>..<br>51|
|REFERENCES..53|
|STATISTICAL APPENDIX<br>..<br>55|

# **Tables**

|Table 1: Parts and products: selected product networks identifiable in SITC Rev. 2<br>.7<br>Table 2: Structure of Exports and Imports of CEEC' in 1993 and 1997 (in million of US dollars and percent) .9<br>Table 3: Developments in Trade of Intermediate, Parts & Components and Manufacturing Products in Central|
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|European Countries.<br>l<br>..|
|Table 4: CEEC-10 Export and Import Values and Shares of Parts, 1993 and 1997 (in million of US dollars and percent)<br>13|
|..............................................................................................................................................................................<br>.<br>Table 5: Imports of parts and the share of imported parts in a product group, 1993, 1997 and 1998 .............................. 14|
|Table 6: Direction of trade of CEEC in 1993, 1997 and 1998 (in million of US dollars and percent) ............................ 16|
|Table 7: Directions of trade in parts of CEEC-10 in 1998 (in million of US dollars and in percent) .............................. 17|
|Table 8: Intensities of Trade in Parts in 1997 ................................................................................<br>19|
|Table 9: Correlation coefficients of exports and imports from the EU, 1997 ..................................................................<br>21|
|<br>Table 10: Trade in parts with the EU and share in trade of manufactures, 1998 .............................................................<br>23|
|Table 11: Revealed Comparative Advantage Indices of Parts in CEEC trade with the EU .............................................<br>26|
|<br>Table 12: The share of products with a double comparative advantage, comparative advantage in exports and imports in<br>CEEC exports and imports of parts in 1997 (million of US dollars and percent) .................................................<br>28|
|<br>Table 13: Horizontal Trade Specialization Indices of Major Parts in CEEC Trade with EU, 1993 & 1997 ................... 31|
|<br>Table 14: Motor Vehicle EU-based networks, 1993 and 1997-98 (in million of US dollars) .........................................<br>35|
|Table 15: RCA Indices of products in automotive network, 1998 ................................................................................<br>39|
|<br>Table 16: Office machinery equipment EU-based networks, Czech Republic, Estonia, Poland, Hungary and total<br>CEEC-10 (in million of US dollars and percent) ...........................................................................<br>42|
|<br>Table 17: Trade in telecommunications<br>and recording equipment, 1993, 1997 and 1998 (million of US dollars and<br>percent) ...........................................................................<br>43|
|Table 18: 'Information Revolution' Networks in Trade of CEEC, 1993 (A) and 1998 (B), in million of US dollars and<br>percent ................................................................................<br>46|
|Table 19: Trade in furniture, 1993 (A) and 1998 (B) (in million of US dollars and percent) .........................................<br>48|
|<br>Table 20: Aggregate trade in networks, value, composition and share in EU-external exports and imports, 1993 and<br>1998 ...........................................................................<br>49|
|Table 21: The share of "production fragmentation" exports to the EU in exports of manufactures (excluding chemicals)<br>in 1993 and 1998 (in percent) ...........................................................................<br>51|