"p.13 ‘quu --\i|\‘\‘ 3- \le“u',,I iv W= 25¢ per day per item RETURNING LIBRARY MATERIALS: \- Place in book return to ream/e charge from circulation records © 1980 THU TIEN LE All Rights Reserved THE NATURAL RESOURCES CONTENT OF U. S. FOREIGN TRADE By Thu Tien Le A DISSERTATION Submitted to Michigan State University in partial fulfillment of the requirements for the degree of DOCTOR OF PHILOSOPHY Department of Economics 1979 ABSTRACT THE NATURAL RESOURCES CONTENT OF U. S. FOREIGN TRADE By Thu Tien Le This study seeks to identify the changes in the natural resource composition of U. S. foreign trade over the last twenty years (1956-1975). These changes will then be examined together with those found by Professor Vanek during the eighty-five previous years (1870-1955)1 in order to trace out the important forces that have influenced the structure of U.S. foreign trade over the last century, as well as to assess the relative abundance of this coun- try's natural resources as compared with the rest of the world. Based on the results of this study, it can be said that during the course of the seventy-five years before 1945, the United States shifted from a net exporter to a net importer of both renew- able and nonrenewable natural resources. Since the end of World War II the trade patterns of the two types of resources have gone in different directions. Over the thirty years between l945 and l975 during which this country still remained a net importer of nonrenew- able natural resources, it not only shifted back to a net exporter of renewable natural resources, but this shift became ever more pro- nounced. Thu Tien Le Our empirical analysis further suggests that the relative changes resulting from various technological advances, income increases and population growths between the United States and the rest of the world have been the main forces behind the movements found in the resource patterns of U. S. foreign trade during the last century. Under a set of simple assumptions, we are able to judge from these findings that since 1870 the United States has become steadily poorer in nonrenewable natural resources. Its renewable natural resources have been increasingly richer since 1945, thereby reversing the trend found in the period between 1870 and 1945, the period in which American renewable natural resources became increasingly scarcer as compared with the rest of the world. To reach these findings, we make use of Professor Vanek's methodology for constructing an index of the natural resource pattern of U. S. foreign trade. Owing both to statistical and conceptual difficulties, we follow Professor Vanek in substituting the value of resource products for economic rent as an index of resource contents of U. S. foreign trade. There is, however, a distinct conceptual difference between Professor Vanek's statistics and ours. Nhile Professor Vanek measured the direct and indirect resource product requirements of total U. S. trade, we are concerned with the direct and indirect resource product requirements per dollar of U. S. trade. The former index indicates the value of trade actually received Thu Tien Le from and paid to foreign countries for resource product exports and imports, while the latter is more suitable for judging the changing resource position of the United States. Another important difference between our work and Vanek's is that while we detailed our studied framework in input-output terms, Professor Vanek did not. Thus we were able to eliminate a discrepancy between theoretical framework and empirical findings which was found in Vanek's work. 1d. Vanek, The Natural Resource Content of United States Foreign Trade, 1870-1955 (Cambridge, Ma: MIT Press, 1963). To my parents and my sisters, Chi Yen, Chi Oanh, Cac em Lien, Mai my brothers, Anh Van, Anh Vuong, Cac Em Duc, Ngoc, Hung ii ACKNOWLEDGMENTS I wish to express my profound gratitude to Professor Anthony Koo who suggested the topic and provided freely his time and patient guidance. I am also very thankful to Professors Lawrence Officer, Milton Steinmueller, and Dennis Warner for their valuable comments and suggestions that have led to substantial improvement. I am deeply indebted to the University of Hue and the Asia Foundation which provided financial support during my first three years of graduate study. I would like to express my sincere appre- ciation to Mr. Michael Thorburn ()f the Asia Foundation and to every member of the University of Hue, particularly to the President and Vice-President of the University, Drs. Le Thanh Minh Chau and Nguyen Van Hai whose wisdom and experience, generously offered, have sus- tained me beyond measure. Special thanks are also due to the Agency of International Development for supporting my first course of study in the United States which lasted for more than four years. I am especially grateful to my former teachers, Professors P. Dale Bush and Grady Mullennix for their continuing interest in my understanding of economics. My sincere appreciation also goes to Dr. Rita Zemach, Technical Director of Michigan Cooperative Health Information System and to my MCHIS colleagues. Their intense inter- est in providing the public with accurate and meaningful data has instilled in me a similar desire to search for the best data sources available for this study. To all my friends, especially Thai Van Can, Duong Dinh Chau, Ton That Chieu, Pham K. Chung, Sashikant Gupta, Doan Thanh Hai, Nguyen Minh Hai, Nancy Heath, Ton That Hua, Thai Vinh Khiem, Nguyen Truong Lam, Dao My Lien, Arthur MacTaggart, Gail MacMillan, Dang Quoc Phu, Tran Huu Quoc, Ronald Sakamoto, John Quynh Schafer, Phan Thi Tinh, Bui Nhu Tru, and Gary Wright, I extend my sincere thanks. On many occasions over the last decade my spirits have been raised by their help and encouragement. I would like to add my special thanks to my friend Margaret Somosi for her contribution to the readability of this dissertation. Appreciation is also due to Professor and Mrs. Christopher Sower, Mr. and Mrs. Trinh Van Trac, Mr. and Mrs. Tran Tan Tanh and their families for providing me the family atmosphere throughout the course of this study. To the members of my family who have given me so much, I can only say that words will never be able to convey my feeling for their love, understanding, patience, and encouragement. They make everything worthwhile. iv TABLE OF CONTENTS LIST OF TABLES LIST OF CHARTS Chapter I. INTRODUCTION Measuring Resource Content of Trade: Summary of Professor Vanek's Statistical Method Outline of the Following Chapters II. DETERMINANTS OF THE RESOURCE PRODUCT PATTERN OF U. S. FOREIGN TRADE . Introduction . The Model . . Changing Resource Product Patterns of Trade Summary . . . . . . . . III. UNITED STATES INTERNATIONAL TRADE IN RESOURCE PRODUCTS . . . . . . . . . . Introduction . . . Percentage Share of Resource Products in U. S. Exports . . Percentage Share of Resource Products in U. S. Imports . Trends in Exports of Resource Products Trends in Imports of Resource Products Resource Products Balance and Relative Resource Product Requirements of Trade Trade, Domestic Output and Consumption of Resource Products . . . Regional Trade in Resource Products Summary . . (11M 10 18 20 20 21 25 40 47 52 63 Chapter IV. VI. VII. VIII. TRENDS IN PRICES AND THE RESOURCE PRODUCT PATTERN OF UNITED STATES FOREIGN TRADE . . Introduction . Export Prices of Resource Products Import Prices of Resource Products Commodity Terms of Trade . . Effect of Changes in Supply and Demand on U. S. Trade in Resource Products . . Summary DIRECT AND INDIRECT RESOURCE PRODUCT REQUIREMENTS OF U. S. FOREIGN TRADE . . Introduction . Measuring Direct and Indirect Resource Product Requiring of U. S. Foreign Trade . . Resource Product Requirements of U. S. Trade Relative Resource Product Requirements Per Dollar of Trade . . . . Summary INCOME, POPULATION, PRODUCTIVITY, AND THE RESOURCE PRODUCT PATTERN OF U. S. FOREIGN TRADE. . . Introduction . Changes in Demand Conditions Changes in Supply Conditions The Combined Effects RELATIVE ABUNDANCE OF NATURAL RESOURCES IN THE UNITED STATES . . Introduction . Professor Vanek' 5 Index of Resource Require- ments . Changing Resource Supplies in the United States Conclusion . . . SUMMARY APPENDICES . BIBLIOGRAPHY vi Page 85 85 86 89 105 114 115 115 116 123 127 132 132 133 137 139 141 145 214 TABLE 3.1 LIST OF TABLES Composition of U. S. Exports by Economic Classes: 1870-1975 . . . . . . . . . . . Composition of U. S. Imports, by Economic Classes: 1870-1975 . . . . . . . . . . . . Values of U. S. Exports of Resource Products, by Type of Products: For Selected Years: 1946-1975 . Percent Distribution of Resource Products Exports by Type of Commodity Class for Selected Years: 1956- 1975 . . . Percent Distribution of U. S. Renewable and Non- renewable Resource Products for Selected Commodi- ties and Selected Years: 1956-1975 Values of U. S. Imports of Resource Products by Type of Product for Selected Years: 1946-1975 . Percentage Distribution of Resource Products Imports by Type of Commodity Class for Selected Years: 1956- 1975 . . Values of U. S. Imports of Renewable and Nonrenew- able Resource Products by Type of Commodity and Their Percentage Distributions for Selected Years: 1956-1975 . . . . . . . . . . Net Exports of Resource Products by Type of Prod- ucts 1956-1975 . United States Resource Products, Production in Millions of Dollars, Valued at 1967 Price and Con- sumption as Percentage of Total Domestic Pro- duction . . . . . . . . . U. S. Export Unit Prices of Resource Products and Finished Manufactures Trends of Manufactured Price and Resource Prices, and the Relation Between the Two Prices for Selected Years: 1881-1971 vii Page 23 27 32 37 39 44 45 46 48 54 68 72 Table 4.3 Relative Increase or Decrease in Unit Value and Quantity of U. S. Exports and Imports of Resource Products Compared to Unit Value and Quantity of Total U. S. Exports and Imports: 1956-1975 Effects of Supply and Demand on U. 3. Trade in Resource Products: 1956-1975. Direct and Indirect Resource Product Requirements of Total U. S. Exports, by Type of Resource Products for 1965-1975 . . . . . Direct and Indirect Resource Product Requirements of U. S. Competitive Imports, by Type of Resource Products for 1965-1975 . . Direct and Indirect Resource Product Requirements of Total U. S. Exports by Major Commodity Class Trading for 1965-1975 . Direct and Indirect Resource Product Requirements of U. 5. Competitive Imports by Major Commodity Class Trading for 1965- 1975 . . Percent Distribution of Resource Product Require- ments of U. S. Domestic Exports, by Major Commodity Class of Exports for Selected Years: 1965-1975 Percent Distribution of Resource Product Require- ments of U. S. Domestic Exports, by Type of Resource Products for Selected Years 1965-1975 . . . Percent Distribution of Resource Product Contents of U. S. Competitive Imports, by Major Commodity Imports, for Selected Years: 1965-1975 . . Percent Distribution of Resource Product Contents of U. 5. Competitive Imports, by Type of Resource Products for Selected Years: 1965-1975 . . Net Exports Resource Products Traded Directly and Indirectly by Type of Resource Products for 1965- 1975 . . . . . . . . . . . . . . . Net Exports Resource Products Traded Directly and Indirectly by Major Economic Classes Trading for 1965-1975 . . . . . . . . viii Page 81 82 9O 91 92 93 94 95 101 102 106 107 Table 5.11 Direct and Indirect Resource Products Contained in $1000 Worth of U. 5. Domestic Exports and an Equivalent Worth of Competitive Imports in 1967 Dollars for Selected Years: 1899-1975 Relative Resource Proudct Requirements Per Dollar of U. S. Foreign Trade in 1967 Dollars for Selected Years: 1899-1975 . . . . . Annual Rates of Growth of Per Capita Gross Domestic Product at Constant Prices in the United States and the World for 1965-1975, by subperiods . Trends in Real Product per Man Hour in the U. S. Private Domestic Economy by Major Industry Divisions for 1966-1973, by Subperiods Annual Percentage Rates of Change of Productivity in Manufacturing, Mining, and Agriculture for Selected Countries, Areas for 1966-1975, by Subperiods . Value of U. S. Ecports, by Economic Classes: 1870- 1975 . . . . . . . . . . . . . Values of U. 5. Exports, by Economic Classes: 1956- 1975 Percentage Share of Value of U S. Exports by Econ- omic Classes: 1870-1975 . . . . . . Value of U. S. Exports of Resource Products by Type of Product: Crude Foods, Renewable Raw Materials, Nonrenewable Raw Materials,Renewable and Nonrenew- able Resource Products,l956-1975 Value of U. 5. Imports, by Economic Classes: 1870- 1975 . . . . . . . . . . . . Value of U. S. General Imports, by Economic Classes: 1956-1975 . . . . . . . . . Percentage Share of Value of U. S. General Imports by Economic Classes: 1870-1975 Value of U. S. Imports of Resource Products by Type of Product: Crude Foods, Renewable Raw Materials, Nonrenewable Raw Materials, Renewable and Nonrenew- able Resource Products,l956-1975 ix Page 109 111 119 126 128 152 153 154 155 156 157 158 159 Table Page A.9 Percentage Share of U. S. Resource Products by Type of Product and Type of Trade: 1956-1975 . . . . . 160 A.1O Value of U. S. Net Exports, by Economic Classes: 1956-1975 . . . . . . . . . . . . . . . 161 A.11 Value of U 5. Net Exports, by Economic Classes: 1956-1975 . . . . . . . . . . . . . . 162 A.12 Relative Resource Product Requirements of U. S. Foreign Trade by Type of Products: 1956-1975 . . . 163 A.13 U. S. Exports by Trading Regions and Commodity Classes: 1956-1975. . . . . . 164 A.l4 U S. Imports by Trading Regions and Commodity Classes: 1956-1975. . . . . . . . . . 165 8.1 Trends in Unit Export Prices of Resource Products and Manufactures: 1881-1975 . . . . . . . . . 168 8.2 Trends in Unit Import Prices of Resource Products and Manufactures: 1881-1975 . . . . . . . . . 169 8.3 Terms of Trade for Resource Products, Crude Foods, and for Raw Materials: 1881-1975 . . . . . . . 170 C.1 Gross Resource Product Requirements Per Dollar of Final Output of 309 Commodity Industries (in Dollars): U. S. Economy for 1967.. . . . . . . 176 C.2 Gross Resource Product Requirements per Dollar of Final Output of 192 Industries (in Dollars): U. S. Economy for 1947. . . . . . . . 188 C.3 Exports and Competitive Imports of Selected Industry Classes, 1967 (in Millions of Dollars) . . . . . 195 D.lA Per Capita Consumption of Foods, Consumer Price Indexes and Per Capita Disposable Income in the United States: 1956-1975 . . . . . . . . . . 209 0.18 Per Capita Consumption of Primary Energy. Consumer Price Indexes and Per Capita Disposable Income in the United States: 1965-1974 . . . . . . . . 210 Table Page 0.2 Per Capita Consumption of Foods, Primary Energy and Per Capita Gross Domestic Product in the Rest of the World and World Export Prices,1965-1974 . . . . . 211 0.3 Estimated Population and Gross Domestic Product in the United States and the Rest of the World,1965- 1974 . . . . . . . . . . . . . . . 212 0.4 Indexes of Productivity in Foods and Mining Industries as Compared to Manufactured Productivity in the United States and in the World as a Whole.1965-1975 . . . 213 0.5 Indexes of Renewable and Nonrenewable Resource Product Structures of Foreign Trade and Indexes Indicating Relative Change in Population and Productivity of Renewable Resource Product and Nonrenewable Resource Product, 1965 - 1975 . . . . . . . . . . . 214 BIBLIOGRAPHY . . . . . . . . . . . . . . . . 215 xi 3.10 3.11 LIST OF CHARTS Percentage Share of U. S. Exports by Economic Classes: 1956-1975 . . . . . . Percentage Share of U. S. Exports by Economic Classes: 1870-1955 . Percentage Share of U. S. Imports by Economic Classes: 1956-1975 Percentage Shares of U. S. Imports by Economic Classes: 1870-1955 . . . . . . U. S. Exports of Resource Products, in Current and 1967 Dollars: 1956-1975 . . . . . . U. S. Exports of Crude Foods: 1956-1975 U. S. Exports of Raw Materials: 1956-1975 U. S. Imports of Resource Products in Current and 1967 Millions of Dollars: 1956-1975 U. S. Imports of Crude Foods, 1955-1975 U. S. Imports of Raw Materials: 1956-1975 Relative Resource Product Requirements of U. S. Trade by Type of Product 1956-1975 Relative Resource Product Requirements of U. S. Foreign Trade, by Type of Product: 1870-1955 Trends of U. S. Consumption of Resource Products as Percentage of Production by Type of Product: 1950- 1969 . U. S. Exports of Crude Foods by Trading Regions, 1956-1975 U. S. Exports of Raw Materials by Trading Regions, 1956-1975 . . . xii Page 22 24 26 28 33 34 35 41 42 43 50 51 53 57 58 Chart Page 3.16 U. S. Imports of Crude Foods by Trading Regions, 1956-1975. . . . . . . 60 3.17 U. S. Imports of Raw Materials by Trading Regions, 1956-1975 . . . . . . . . . . . . . . . 61 4.1 Trends in Exports Unit Prices of Total Resource Products and Finished Manufactures for 1956-1975 . . 69 4.2 Trends in Export Unit Prices of Resource Products by Type of Product, 1956-1975 . . . . . . . . 70 4.3 Trends in Import Unit Prices of Total Resource Products and Finished Manufacture for 1956-1975 . . 73 4.4 Trends in Import Unit Prices of Resource Products by Type of Products for 1956-1975 . . . . . . . 74 4.5 U. 5. Terms of Trade for Total Resource Products and for Their Two Resource Commodity Classes 1956- 1975 . . . . . . . . . . . . . . . . 76 4.6 Four Possible Shifts in Supply and Demand Schedules . 80 5.1 Trends of Direct and Indirect Resource Products Con- tained in U. S. Domestic Exports, by Type of Resource Products, for 1965-1975 . . . . . . . . . . 97 5.2 Trends of Direct and Indirect Resource Products Con- tained in U. S. Competitive Imports, by Type of Resource Products, for 1965-1975 . . . . 99 5.3 Resource Products Balance Traded Immediately or Directly and Indirectly, by Type of Resource Product for 1965—1975 . . 104 5.4 Relative Resource Product Requirements per Dollar of U. S. Foreign Trade, by Types of Product in 1967 Dollars for 1965-1975. . . . . . . 112 xiii CHAPTER I INTRODUCTION Professor Vanek's attempt to explain the Leontief's scarce- factor paradox is familiar to all students of international econ- omics.1 His explanation relies on the assumption that capital and natural resources are complementary factors of production while labor and natural resources are not. This hypothesis has stimulated extensive empirical and theoretical studies such as those of D. Wahl (1961), R. Bharadwaj (1962), S. Naga (1965), L. Weiser (1967), R. Baldwin (197l),and 0. Humphrey and J. Moroney (1975). Essentially, each was concerned with the role of natural resources (or primary products) in the labor-capital structure of foreign trade. Another aspect of Vanek's work, one that has received rela- tively little attention, was his pioneering study concerning the natural resources structure of United States international trade.2 Using certain tools of measurement of natural resource contents, the 1947 input-output structure of the American economy, and a simple theoretical model, Professor Vanek was able to estimate and explain 10. Vanek, The Natural Resource Content of United States Foreign Trade, 1870-1955 (Cambridge, Ma: MIT Press, 1963), pp. 132- 135. 21bid., pp. 6-131. the changes in resource patterns of U. S. trade during 1870-1955. He then used these results to assess the relative abundance of American natural resources as compared with the rest of the world. The purpose of this study is to recapture the main character- istics of U. S. natural resource trade patterns over the 85 years considered by Professor Vanek and to find out how the trade pattern has changed over the last twenty years. That is, we wish to identify the changes in resource composition of U. S. foreign trade between 1956 and 1975, and then examine these changes together with those found by Professor Vanek during the 85 previous years in order to identify important forces that have shaped the resource patterns of U. S. foreign trade over the last century. To carry out this analysis, we first must design a tool to measure the resource contents in U. S. exports and imports. Here we adopt fully Professor Vanek's statistical method for measuring such contents, a method which will be presented in the following section. Measuring Resource Content of Trade: Summary of Professor Vanek's StatisticaT Method In searching for a meaningful and workable index of the resource content of U. S. foreign trade, Professor Vanek considered two alternatives: rent of land (i.e., the wage of natural resource factor of production) and the value of natural resource products. As a variable derived from the general equilibrium condi- tions, rent of land is the closest possible measure of the relative scarcity of the particular type of land to which it is attached. Thus, on theoretical grounds, economic rent would serve best as an index of natural resource content in a given bill of goods. Yet, Professor Vanek had to reject it as a workable device owing both to statistical and conceptual difficulties. He found that available data was not adequate to yield meaningful estimates of economic rent (rent of land). They were either too aggregative or were constructed in far from competitive conditions. Moreover, it was impossible in practices, to separate land and capital invested in land. As a result, the variation in statistically recorded rent over a long period of time might very well reveal only the changes in capital invested in land rather than those of economic rent. Although the statistical information of today is much richer and more detailed, we still face virtually the same difficulties that Professor Vanek did twenty-five years ago. Indeed, in a recent study of "substitution among capital, labor and natural resource products in American manufacturing," 0. Humphrey and J. Moroney made the following remarks concerning the nature of natural resources: . . . pure natural resources are an ill-defined collection whose elements depend in an essential way on mankind's technical knowledge. For example, pitchblende and uraninite were not regarded as natural resources earlier in this cen- tury because of limited knowledge of fission technology. And oil-rich shale has only recently become recognized as a potentially important, economically exploitable natural resource in this country. Thus, the definition of basic natural resources depends on technology and prices and is constantly changing in technologically progressive econ- omies.3 30. Humphrey and J. Moroney, "Substitution Among Capital, Labor, and Natural Resource Products in Natural Resource Products in American Manufacturing," Journal of Political Economy (February 1975): 57-82. Following Vanek's lead, we shall, therefore, substitute the value of resource products for economic rent as our index of resource contents of U. S. foreign trade. Resource products are defined to be commodities which are nearest to the initial stage of production process. This definition conforms to two currently accepted concept of statistical classification: 1. U. S. Department of Commerce classifies the foreign trade returns into five-commodity classes: crude foods, raw materials, manufactured foods, semi-manufactured products, and finished manu- factured products. The first two classes, according to our defini- tion, are essentially resource products. 2. Resources for the Future, Inc., using the classification of the Bureau of Labor Statistics, defines 21 of 192 production sec- tors in the U. 5. economy as resource industries, which correspond almost exactly to the two-commodity classes of resource products mentioned above. Thus, the value of resource products, though theoretically inferior, is far more workable statistically. Admittedly, the real resource input in total unit value of product varies considerably between different resource products. However, it is very likely that the resource content in these commodi- ties is much greater than that of more highly fabricated commodities in which the productive contribution of land enters only indirectly. This is, indeed, a fundamental fact that allowed Professor Vanek to substitute the value of resource products for economic rent. Furthermore, there is a strong presumption that changes in factor supplies, technology, or demand conditions may affect the volume and value of exports (or imports) but will not affect the share of rent per dollar of exports (or imports). This presumption will permit us to establish the dynamic relationship between resource prod- uct contents and resource contents of trade. That is, changes in volume of an aggregate of resource products in total exports or imports will be roughly proportional to changes in resource contents. In closing, we wish to recall Professor Vanek's own remark concerning his statistical method of measuring resource contents: Admittedly, the statistical method explained here and the inferences drawn are very crude ones. . . . Nevertheless, we believe that even in the absence of more accurate statistical information and greater resources than those available to the present writer, our empirical work is not without signifi- cance.4 Outline of the Following Chapters The foregoing analysis has provided us with a tool to gather empirical data to describe changes in resource product pat- terns of U. S. foreign trade. Chapter II theoretically identifies the important forces that are mainly responsible for the changes found in the trade patterns. In essence, it is a comparative static analysis based on an imput-output model of three goods, three inter- mediate inputs and three primary inputs. The following three chapters are devoted to the empirical study of resource product composition of U. S. foreign trade between 4J. Vanek, The Natural Resource Content of United States Foreign Trade, 1870-1955, p. 13. 1870 to 1975. Chapter III concerns only resource products traded directly between the United States and the rest of the world. It does not take into consideration the resource products flow into and out of this country as input of nonresource products, namely, manufactured foods, semi and finished manufactured products. Conse- quently, statistics derived in this chapter do not seem to be satis- factorily fulfilled in reality. Nevertheless, they do reveal some important and interesting changes in U. S. foreign trade over the last century. The reader is referred to the summary of the chapter for the main findings. Chapter IV deals with the price movements of resource products. It is shown that the price information sheds very little light on our problems of measuring changes in the resource product patterns of foreign trade. Chapter V presents the key data for our analysis. Using the input-output method, we are able to compute the direct and indirect resource product requirements of U. S. exports and competitive imports for the eleven years between 1965 and 1975. These statis- tical results are then used to derive our index of relative resource product requirements per dollar of U. S. foreign trade, which is the ratio of the direct and indirect resource product requirements per $1,000 worth of U. S. exports to the direct and indirect resource product requirements in an equivalent amount of U. S. competitive imports. The analytical method used in this chapter is closely related to Professor Venek's, but there is a distinct difference. Here we are concerned with relative resource product requirements per dollar of trade, while Professor Vanek measured the relative resource product requirements of U. S. trade. The latter indicates the value of resources actually paid to foreigners for resource product imports, the former serves as an index of resource product intensiveness of United States foreign trade. Chapter VI attempts to empirically identify the important long-run forces which have influenced the resource product composi- tion of U. S. foreign trade over the last century. In so doing, we have made use of the theoretical results derived from our input- output model (Chapter II ), the trade patterns found in Chapter V, and some additional data concerning relative changes in productivity, population and income, between the United States and the rest of the world during the period examined. We found that not only has the American resource product trade pattern changed drastically between 1870-1955 and 1965-1975, but also that the three forces (technology, population, income) that influenced the trade pattern has shifted in almost exactly opposite directions between the two periods. The last chapter is devoted to the estimation of the rela- tive resource requirements per dollar of trade. The problem here is to link the nonmeasurable resource statistics to the already-computed resource product trade indexes by making further assumptions. Follow- ing Professor Vanek's analysis, we have laid out the conditions under which the changes in resource product pattern of trade will satis- factorily signify changes in resource structure of trade. The merit of this analysis is that it allows us to use the estimated resource indexes to make inferences concerning the relative abundance of U. S. natural resources as compared with the rest of the world. CHAPTER II DETERMINANTS OF THE RESOURCE PRODUCT PATTERN OF U. S. FOREIGN TRADE Introduction One of the basic problems in international trade is to explain the commodity composition of a country's foreign trade. The Ricardian answer is given in terms of comparative costs. The impor- tant contribution of Ricardo is his proof that not absolute but rela- tive differences in costs are the necessary condition for trade. This explanation, however, still begs the question of what makes for differences in comparative costs. A number of theories has been offered. Essentially, each of the theories pointed out one single factor as a vital force behind the structure of trade, be it the relative factor endowments, technological advances, demand conditions, environmental constraints, etc. Expectedly, all of the theories explain some of the trade data but none of them was able to pro- vide a satisfactory explanation of international exchange. The past decade, therefore, has observed a new direction in international trade theory which incorporates all explanatory factors into a general model.1 The merit of this general approach is that it comes 1P. B. Kenen and E. B. Yudin, "Skills, Human Capital and U. S. Foreign Trade," Columbia University International Economic Workshop Paper, December 1968, Mimeographed; R. E. Baldwin, "Deter- minants of the Commodity Structure of U. S. Trade," American 9 10 closer than ever before to a description of the real world. More- over, the relationship among any set of factors may now be examined as special cases in the general model. In line with this general approach, this chapter shall explore how relative changes in demand conditions, technology, and factor endowments may affect the resource product structure of trade. This task will provide us with an analytical framework to describe and explain the resource structure of U. S. foreign trade. The Modei2 Since we are interested in measuring the direct and indirect resource products contained in U. S. foreign trade, the model pre- sented here is one with an input-output technology in which all pro- duction functions are of input-output type. Consider country A which produces three products (X1, X2, X3), using three primary inputs (K, L, M), and three intermediate inputs. The output of any commodity is used either as final demand or intermediate input. Final demand includes exports and consumption of domestic produced goods. Besides pure competition, profit maximiza- tion in the production of all three commodities and perfect internal primary factor mobility, country A is assumed to operate under the following conditions: Economic Review (March 1971): 126-146; and A. Y. C. Koo, Environ- mental Repercussions on Trade and Investment, Chapter IV, Michigan State University International Business and Economic Studies, 1979, pp. 55-70. 2It will be evident that our model follows that developed by Professors R. Dorfman, P. Samuelson, and R. Solow (1958). 11 1. The production functions for the three goods are homo- geneous of degree one with fixed input-output coefficients. 2. All three primary factors are perfectly inelastic in supply in the short-run and L also in the long-run. Factors K and M, on the other hand, are subject to change over the long-run. To keep our analysis as simple as possible, we assume the stock of K is increasing and that of M decreasing over the long period of time. 3. Furthermore, X1 is assumed a K-factor intensive good, X2 a L-factor intensive, and X3 an M-factor intensive. 4. With respect to consumption, X1 has the hightest income elasticity while X2 the lowest one. Within the context of our resource product structure, X1, X2, and X3 may be thought as manufacture, renewable, and nonrenewable resource products, respectively. Factors L and M are renewable and nonrenewable resource inputs while K a composite dose of remaining factors. We define the following notations for i = 1, 2, 3 and j = l, 2, 3. X3 = Gross output of good j produced in A. X? = Net output of good j produced in A. XE = Total consumption of good j in A. X} = Amount of good j being traded (either exports or imports or imports but not both). 12 Y = Gross National Product of A. P. = Market price of good j. .1 k = Rent on factor K 1 = Rent on factor L m = Rent on factor M U = Population size in A. aij = The required amounts of the ith intermediate input per unit of the jth good. bKj = The required amounts of K per unit of the jth good. bLj = The required amounts of L per unit of the jth good. ij = The required amounts of M per unit of the jth good The following equations characterize country A's economy: 3 s s c 1 (l) O = I. O + I + O XJ 1E] aJ1 X1 X XJ 3 5 (2) 2 b 0 X. - K jg] KJ J 3 S 3) with 13 3 s z b . x. = M i=1 Ma J 3 xN = x3 - z a.. x? J J 1:1 31 1 K = K(t), dK/dt > O L = L(t), dL/dt = o M = M(t), dM/dt < O kK + 1L + mM = Y (4) (5) (6) (l3) 14 Equation (13) states the zero trade balance condition. When this condition is imposed, one can actually derive (13) from (11): Thus, one equation in (11) and (13) can be eliminated. The system of equations (1) - (13) therefore consists of 22 equations N C T j. xj. xj. K. L. M. Y. k/P]. 1/P], m/P], P2/P], P3/P1) and one exogeneous variable (U). By with 21 endogeneous variables (XE, X Walras' law, one of the 21 equations in (1) - (8), (10) - (13), may be eliminated. Our model is therefore consistent in the sense that there are the same number of equations and endogeneous variables (21). Assuming the existence of a unique positive solution, we wish to construct indexes of resource product contents of foreign trade. Let 7? denote the gross amount of good jth required to produce to meet X} (amounts of good j being traded), one can write: 5 3 71 = Z a .'Y§ + XT . ., j = 1-3 (14) J i=1J11 J Collecting all X§in (14) on the left hand side: J 15 —s _s .5 _ T (1 ‘ a11) X1 ' a12 x2 ' a13 x3 ‘ x1 _s .5 —s _ 1 ' a21 1 I (I ’ a22) x2 ‘ a23 x3 ’ x2 (‘5) ._s ._s —s _ 1 ' a31 X1 ' a32 X2 l (1 ' 333) x3 ' X3 In matrix notation, (15) can be written: (I - A) Y’ = T (16) or 75- (I - A)"T (17) Where I is the identity matrix and A is a matrix whose elements are a... 13 Let B = (I - A)", (17) becomes: x5 = BT (18) Since we are only interested in measuring the resource products contained in trade (7:, 7:), manufactured good contents of trade can be disregarded in (18): x2 b21 b22 b23 T1 = T2 (19) .5 x3 b31 b32 b33 T3 16 It is clear from (19) that given the value of the exogeneous variable (population), the amount of resource product contents of trade (73, 73) can be determined. Changes in 73, 73 over a period of time indicate changes in country A's resource product structure of trade. It should be noted that from this simple model, country A can either export or import one type of product, but it will not be simultaneously selling and buying the same product. Consideration of actual data on U. S. foreign trade would not reveal such a clear- cut trade pattern. It is mainly because in the real world there are not only three, but many products. Moreover, their export com- ponents are quite different from those of imports. Thus it is net trade or more precisely relative trade rather than the absolute level of trade that really reflects a country's trade pattern. Accordingly, our indexes of resource product structures of foreign trade, RP, may be defined as follows: 15 RPJ.=—_-'}, j=2,3 (20) XJ' Where 7? and 7% are, respectively, values of resource products con- _£ tained in $1,000 worth of country A's exports and imports. Xj and Y; are computed from (19). Changing Resource Product Patterns of Trade Our next task is to apply the general equilibrium analysis with interindustry flows described above to consider the effects of 17 changes in factor endowments, technology, consumption on the resource product structures of country A's foreign trade. An increase in the factor of production, say K, means that country A will be able to produce on an absolute level more of all three products, Xf, X3, and X3. However, because good X? is rela- tive K-intensive, it can be shown that the additional supply of K will result in an increase in the production of Xi, and reductions in the outputs of X3 and X3. This general result is the Rybczynski theorem, which states that an increase in one factor, holding all other parameters constant, will increase the output of those goods using that factor relatively intensively and will decrease the output of those goods not using that factor relatively intensively. An increase in production of manufactured goods and a decrease in that of resource products will probably bring about decreases in our indexes of resource product structures of trade (RP) due to the fact that more resource products are needed to produce resource products than are required in production of manufactures (see Input-Output Tables for U. 5. economy). To trace the impact of technological change on the production conditions, let us consider a case in which improved technology occurs in manufactured industry while leaving the resource product industries unaffected. Furthermore, we assume that innovation is neutral. Under these conditions, output of manufactured goods will rise and that of the resource products will decline. The impact of technological changes on the resource product trade pattern is thus similar to those of changing factor endowments discussed earlier. 18 To find what effect change in income will have on the trade pattern is a little more complicated. For it depends not only on the relative change in income, but also on income elasticities of the three products in country A as compared with those in the rest of the world. We shall discuss the income effects along with our esti- mates of income elasticities of resource products in Chapter VI. The effects of population growth will also be examined in that chapter. Summar This chapter is concerned with the theory underlying changes in resource product patterns of foreign trade. In essence, it is a comparative static analysis based on an input-output model of three primary inputs, three intermediate inputs, and three outputs. Our model has thus come closer than did Professor Vanek's two factor, two output model to a description of the real world. More impor- tantly, by detail our model in input-output terms, we have eliminated a serious discrepancy between theoretical framework and empirical results found in Vanek's work. Indeed, while no intermediate goods were explicitly stated in his model, his empirical findings which were based on the 1947 input-output table actually implied there existed intermediate goods in the economy.3 Admittedly, our model is still based on some rather simple assumptions such as constant return to scale production functions, 3I wish to acknowledge with gratitude the helpful comments of Professor Dennis Warner regarding this development. 19 neutral technological innovations, constant input-output coeffi- cients, perfect competition, etc. Clearly, some of the assumptions could be modified to show the effects of changes in factors such as consumer's tastes, government policy, biased technological advances, increasing return to scale etc., on the trade pattern. Under such conditions, the model would, however, become extremely difficult to operate and probably less illuminating. Furthermore, it would require a vast amount of data to test its explanatory hypothesis, and much of the necessary information is probably not available. CHAPTER III UNITED STATES INTERNATIONAL TRADE IN RESOURCE PRODUCTS Introduction The analysis presented in the previous chapters has provided us with tools for the measurement of the natural resource content in a given bill of goods, as well as the theory underlying the changes in the resource products structure of foreign trade. Our next task is to use the available data and information derived from it to describe, examine, and explain the changing natural resource structure of U. S. foreign trade. This empirical study involves a vast amount of data and computational effort, and will therefore be presented in this as well as the next two chapters. The present chapter is concerned only with resource products traded directly beween the United States and the rest of the world. As mentioned in Chapter I, crude foods and raw materials are the two-commodity classes which correspond to our definition of resource products. Statistics concerning U. S. foreign trade in these two-commodity classes will be our principal source of resource products for this chapter (see Statistical Appendix to the chapter). 20 MD? 21 Percentage Share of Resource Products in U. S. Exports Over the last twenty years, 1956-1975, resource products exports accounted for, on the average, 19 percent of total U. S. exports. Their share fluctuated between 16 and 21 percent with more declines and sharper fluctuations occurring in the second half of the period (Table 3.1 and Chart 3.1). The proportion declined even more markedly during the earlier years, 1870-1955. During the course of these 85 years, it fell from 59 percent to 20 percent (Chart 3.2). Within the two-commodity classes of resource products, the last twenty years (1956-1975) saw a gradual decrease in percentage share of raw materials exports. Their average share was 12 percent in the first five years, but it then fell to less than 11 percent for the period 1961-1965, and then to less than 10 percent during 1966- 1970. By 1975, the proportion was less than 8 percent. Taking a long view, we observe that the United States has, in fact, experienced declining relative importance of its raw materials exports since 1870. Crude foods, on the other hand, have gained their share in total exports during 1956-1975 period. They accounted for, on the average, about 7 percent of total exports between 1956 and 1960. The proportion rose to 9 percent during 1961-65 and then fell to less than 8 percent in the next five years. The largest share was 11 percent which was recorded in 1973, when the world faced serious production short-falls coupled with strong pressure on the demand side. As of 1975, crude foods stood for about 9 percent of total 22 133$ ‘A‘AA 'Vv" 50%)L ”s. . A 40% ' "e .' . I'. s o \ o I s 1’ g. ‘0 0' \“MQ " \ I o '0 V ‘.'. 'I Q ~...'" “. ’0' “a.“ a. .V' \‘ o ." "~ o'. . .1 ' \vf SEHI- MANUFACTURES “ \ 1 \..~ 30%" ‘ O Q . ... ’0 . .‘\..”' .V-.“ ’0’~. 0" ‘- '\ t o \o' NIANUPA ems-zap Foot-s. \. ".u.‘ s“ ’ ..‘I. \‘ “V" s‘ .o... ‘ 0‘ ’ . . ."o\‘ ['Io. 0"") I o o ‘ I O. o a o \ . ' \ O ‘ .' “ ’ 200’ .a' ‘5’... ‘9' fix .‘ I. ‘0. 1” “‘ I. Q."'O .‘ C1: 17:. 1700235 ‘~ a" "'1 U ‘ a" l' '\ u. r0 O. '0 ~.. O Q..‘." “ '..... 0"... ‘0‘.. 104) ‘QO" .."" 0" .'0. o-.. ‘ e.. C 1 “RAW M ATEK‘ A LS __‘ [#11413th MAN UFACT ucts AA__ _' 1956 1960 Chart 3.l.--Percentage Share of U. S. Exports by Economic Classes: 1956-1975. SOURCE: A v 1965 _'_Y 1970 1975 Appendix Table A2. 23 .N< «Pane xeeeeeee .Fe epeee xceeeeee .mmmcm>< apemm>~ "mumpiomwp ”mmmpionwp ”mmumsom m.nw m.Po ¢.Nm p.mm ~.wm o.mm o.on o.mp mugsuum$=cmz umcmmcmu o.—F _.mp N.m~ N.mp F.mp o.NF o.m o.m mmczuumwscwsiwemm w.m ¢.¢ m.¢ F.m 0.0 o.m o.mp o.mm mvoom tmgzuumwacmz mp03UOLQ mUL30mmL :oz m.u w.o~ N.o_ P.PP m.- o.m_ o.m o.mm mmeLmumz 3mm m.m ~.op ¢.n m.m ¢.~ o.m c.~ o.o~ muoow wuzgu n.mp o.~m o.np m.om m.o~ o.o~ o.m o.mm muozvosa mugzommm o.oop o.oop o.oop o.oop o.oo_ o.cop o.cop o.oop mugoaxm uwummeoo Punch mnmp whipnmp omimmop mmipmmp .omimmmp mmiommp meioemp owioump Ugommuwo A mumpiommp ”mommmpo uwsoeoum an mucom mzpm> Papa» mo ucmucmmv xm .m .2 Uo :owuwmoasouii.F.m u4m< xpgmm> cw mzpm> pouch $0 acmugmav ”mommmpo oweocoum an .mugoasH .m .2 we cowwmmanou--.N.m m4m<~ 28 _— Finisheq.yanufactures 75% ii.--"- ..-”“‘" ’,‘Semi-i-‘lanufactures :-l’lan.uf‘ac. Fo ds--o"‘--‘~~, "a"; 50% v .o"9 ,.,C_r_ude Foods ‘ 25% . "“.'o¢' \,OO --0\\ "' Raw Materials 0% I I L I I I I I I l870 l900 1925 1950 l960 SOURCE: J. Vanek, National Resources Content of U. S. Foreign Trade, l870-l955, Figure 5.3, p. 421 Chart 3.4.--Percentages Shares of U. S. Imports by Economic Classes: l870-l955 from 33 percent in 1945 to l8 percent of total imports in l960, and held roughly at this level during the next four years. Between 1965 and l97l the proportion fell again from l7 to ll percent. But the decline stopped there. With domestic resources, especially crude oils, being depleted as demand rose with economic growth, raw mate- rials began to advance faster than total imports. Thus their shared trend was being reversed. By l975, their share was over l6 percent. The period between 1870 and 1945 found it soaring from 17 to 23 per- cent. The picture of crude foods imports is much simpler to describe. While they fell in relative importance during the past twenty years (from 15 percent in 1956 to 5 percent of total imports in 1975), they gained slightly between l870 and l955 (from l6 to 20 percent). Thus, both raw materials and crude foods were generally responsible 29 for the rises and falls in percentage share of resource products imports over the last century. In regard to nonresource products, imports of manufactured foods did not advance as much as did the total imports over the entire period (1870-1975). This trend was even more pronounced during the last twenty years. The products accounted for, on the average, 21 percent of total imports during 1870-1880, but only 11 percent in 1956 and less than 7 percent in 1975. Low income elas- ticities of foods seem to be the best explanation for this decline. Another class which declined in the last twenty years was semi- manufactured products. Their share, which was nearly 23 percent in 1956, was reduced to less than 16 percent in 1975. It was neces- ary to note that the period between 1870 and 1955 saw semi-manufac— tured imports behave quite differently. They were the only class which constantly increased faster than total imports. Finished manufactured products, on the other hand, gained substantially in relative importance since 1945. Imports of the products exhibited not only the largest proportion in total imports, but also the fast- est rate of increase during the last thirty years. Their share which, on the average, was 18 percent during 1940-1945, soared to 55 percent in 1975. The earlier period (1870-1945) showed the pro- portion steadily declining from 33 to 18 percent. Thus, in the period following World War II the structure of U. S. exports has changed rather moderately and has remained domi- nated by finished manufactured products, while that of imports was 30 transformed radically. The composition of imports has shifted toward finished manufactures. As a result, the structures of exports and imports have become more similar to each other than ever before. The reasons for these structural shifts may be found in "The 1974 Inter- national Economic Report of the President:" Over the post-war period we have seen many nations rise and challenge our ability to produce and market various products on a global basis. The Europeans developed a grow- ing trading prowess during the late 1950's and the early 1960's. This was followed by the unprecedented rise in the Japanese ability to produce and market goods for world mar- kets. More recently we have seen some less-developed coun- tries--Hong Kong, Taiwan, South Korea, Spain, Mexico, and Brazil-~trade increasingly in manufactured goods. Other LDS's will undoubtedly follow their lead. They have not only developed efficient manufacturing establishments, but have also gained the ability to design and market products, and to provide after-sales service. Most of these LDCs first developed labor-intensive manu- factures requiring little capital investment and easily available know-how. But over the years each has moved up to more sophisticated products. For our part, we too have upgraded our product 1ine--a natural and beneficial process accompanying the expansion of the world trade. But our tra- ditional product leadership has been eroding faster than we have been developing new products, because it is easier to catch up with the leader than it is to push ahead the frontiers of innovation. This is true especially when measured by the value of our trade. Our most significant loss of market shares has been in mass-produced consumer items where the value of trade is very large. In the highly sophisticated products where we have gained an overwhelming market share, the unit prices are high but the total volume of sales is small. Taking a broader view, Monroe has discovered that the trade patterns of the world as a whole has also been heavily dominated by 1International Economic Report of the President (Washington, D.C.: U. S. Government Printing Office, 1974), p. 38. 31 manufactured products. His analysis may shed some light on the problem of understanding the changing structure of U. S. foreign trade: International trade in foodstuffs did not increase as fast as total world trade, partly because many countries purposefully chose to maintain some levels of domestic food production in a desire to maintain national independence and security, or to appease strong farm lobbies. It has also been argued that international trade in foodstuffs rose less rapidly than total trade for reasons related to Engel's law: out of a rising aggregate world income, a decreasing proportion of it was spent on acquiring food. . . Trade in raw materials and fuels historically did not rise very rapidly either. Again several reasons may be cited. Technological innovation and development of synthetics afforded substantial economies of scale in the use of raw materials and fuel in a wide variety of production processes. Moreover, there was generally little product differentiation among given types of raw materials and fuels, and except in extreme circumstances of war, there were almost always alternative sources of supply. Accordingly, prices of many raw materials and fuels tended to rise less rapidly over time than did prices of manufactured products. That.meantthat by value the share of raw materials and fuels entering international trade declined more rapidly than did the share of these same items in terms of volume.2 Given the changing trade patterns of the United States and the world described above, it appears that while the comparative advantage of U. S. crude foods has improved significantly, that of raw materials has constantly deteriorated since 1945. The period between 1870 and 1945, on the other hand, revealed a relative dis- advantage of both types of U. S. resource products. Having considered the distribution of U. S. foreign trade by economic classes, we wish now to examine more closely the export and import trends of resource products. 2Wilbur F. Monroe, International Trade Policy in Transition (Lexington: Lexington Books, 1975), pp. 27-28. 32 Trends in Exports of Resource Products The nominal value of U. S. exports of resource products in 1975 was nearly eleven times higher than that of 1946. As can be seen from Table 3.3, the largest increase occurred in 1973 when the TABLE 3.3.--Values of U. S. Exports of Resource Products, by Type of Products: For Selected Years: 1946-1975 (in nominal and real values) Exports of Resource Products 1946 1956 1960 1965 1970 1973 1975 Total (in nominal values) 2063 3847 4233 5475 7240 16630 22680 Crude Foods 648 1332 1645 2587 2748 8804 11805 Raw Materials 1415 2515 2588 2888 4492 7826 10884 Total (in real values) 2650 4015 4642 5615 6962 10318 9194 Crude Foods 605 1401 1792 2695 2776 5499 4858 Raw Materials 2045 2614 2850 2920 4186 4819 4336 SOURCES: Appendix Tables Al and A2 nominal value soared to $16,630 million, 85 percent above the pre- vious year's level. This reflects not only the large price increase but also a 35 percent increase in quantity, a rate unmatched for three decades. In the following two years while the real value of resource products exports declined by 11 percent and leveled off thereafter, the nominal value continued to rise and it reached $22,689 million in 1975. Before 1973, resource products exports showed no such growth. During these twenty seven years (1946-1972), In Millions of Dollars 22,303 1 7 21,000 ‘ 20,000 1 Y 19,000 1 18,000 17,000 1_ 16,000 ,. 10,000 9,000 1P 8,000 7,000 0 6,000 5,390 " 4,033 Chart 3.5.--U. S. Exports of Resource Products, in current and 1967 Dollars: 1956-1975. SOURCES: Appendix Tables Al and A2. 34 In Millions? [4 of Dollars , i 10,000 " i :' 3:: . -§: 1, ti is $3 11 4h ‘5: I ‘55 .2: 1. {E El 02 i :' o ‘1 : YA 49000 0 E gig i 3,? I fig} 3,000 1. 1, .’ .g; - \ I : 3 _ .150 2,000 0 ...... ,I' \...o J’." .- -.‘/' 1956 7' ' 72 1975 1956-1975 (in Chart 3.6.--U. S. Exports of Crude Foods: current and 1967 dollars). SOURCES: Appendix Tables Al and A2. 35 In Millions “ i“, of Dollars 5 10.000 ‘ 3: no 3 5,000 4,000 3,000 2,000 0 . ‘s‘o' 1,000 ° _ ‘ t 1956 1975 : 1956-1975 (in Chart 3.7.--U. S. Exports of Raw Materials current and 1967 dollars) SOURCE: Appendix Tables Al and A2. 36 annual rates of increase were less than 13 percent measured in nomi- nal term, and about 7 percent in real terms. Furthermore, fluctua- tions were found rather frequently in both trends (Chart 3.5). Tracing the trend of resource products to that of their two- commodity classes during the last twenty years (1956-1975) shows that resource products exports moved more comformably to raw mate- rials exports than to crude foods exports during the first seventeen years. The situation, however, was reversed in the remaining three years of the period (Charts 3.5, 3.6, and 3.7). We observe that while the nominal value of raw materials exports changed less sharply than crude foods, it suffered more fluctuations from year to year. This result could be expected because of the comparatively higher income elasticity of raw materials and the existence of business cycles in the world economy. Table 3.4 compares the distribution of resource products exports by type of commodity class. While raw materials took larger shares than crude foods in every year during the period 1956-1975 except in 1966, 1973, and 1975, nonrenewable raw materials (which is as same as nonrenewable resource products) accounted for the smallest proportion in total resource products exports. The proportion was less than 27 percent throughout the period. In other words, the share of renewable resource products (which consist of crude foods and renewable raw materials) remained larger than 73 percent of the aggregate in every year. Their largest share was 20 percent in 1973. 37 ¢< mpnah xwucmaa< "uuazom m.mp m.m_ m.m P.mm w.m_ o.mp m.m~ mpuauoaa aue=Ommm a_naza:mccoz P.0m ~.¢w P.0m m.o~ N.om ¢.om m.¢~ mgasuoea mUL=Omam mpnmzmcam o.Nm ~.m¢ m.~m o.mm ¢.om m.mm 0.4m mecca auseu m.m_ w.mp m.m _.mm w.m_ o.m_ m.m~ mFaPpras 3mg mpnazmcaecoz _.wN o.mm _.~m m.mm m.mm m.N¢ m.mm mpm_taoas sat m_amzmcam o.we w.Pm o.~e o.~e m.m¢ ..~o ¢.mm m_mwcauaz 3am o.oo_ o.oo_ o.oop o.oop o.oop o.oo_ o.oo_ mpuauoca «baseman _moo» m~m_ ¢~m_ mum_ cum. woo_ omm_ oma_ mpeoaxm mmwpwuoesou mump-mmmp "mtam> cmbumpmm Lea mmmpu auwuosaou do maze an mugoaxm muoauoga mogsommm mo cowuanwgumwa pcmugma--.¢.m ~4m oapum.mm new mmVBPUOEEou ompum_am Let mwu=UOLa mULSOmmm mFQMBmchcoz Ucm mpnmzwcmm .m .3 ho cowusnwLume “COULwQII.m.m udm Poms cmv Punch mommm mommy moms emmm “mom Npom nmom Nmnp mpmwgmumz 3mm Nemm Pmnm Nmmm momm cusp omnp mmom v—m muoou muzgu opwnw omnmm nempp mmmw mmmv Nmuc mmpm memm Ammapm> —m:weo: cmv Pouch mmmp «nap mnmp mmmp Nomp comp mmmp o¢mp muuzuogm mugzommm mo muganH Amcmppoo we mcowppwz Romp cw can ucmgcau :PV mumplmemF "mgmm> umpumpmm Low puzuoca do max» >2 mpozcoga mogsomom mo mucanH .m .2 we mmspm>-u.o.m ~4m cmuumpmm Lo» mmmpu xuwcoEEou to maxh >3 mucoqu muoauocq mucaommm do cowuanwgumwo mmmucmugma--.n.m m4m<~ 46 TABLE 3.8.--Values of U. S. Imports of Renewable and Nonrenewable Resource Products by Type of Commodity (in Nominal Values, One Millions of Dollars) and Their Percentage Distributions for Selected Years: 1956-1975 Comdities Imports 1956 1960 1965 1970 1971 1973 1975 Renewable Resource Products 3238 2664 3241 3714 3666 4829 5521 Coffee 1442 1012 1058 1160 1167 1566 1562 Cocoa 162 167 120 201 181 212 324 Fish, shelfish 173 228 385 638 720 1185 1150 Fruits, nuts 148 175 267 343 345 412 458 Wheat and other cereals Oil seeds 51 70 63 53 48 64 37 Crude rubber 407 333 194 241 219 347 368 Raw silk 38 27 20 7 2 6 5 Nonrenewable Resource Products 1885 2068 2476 2991 3322 6518 21689 Crude minerals 221 226 246 248 220 303 324 Iron ores 250 322 444 480 451 534 860 Nonferrous ores 471 460 395 522 461 507 773 Crude petroleum 841 951 1212 1449 1879 4581 19250 Percentage Distribution Renewable Resource Products 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Coffee 44.5 38.0 32.6 31.2 31.8 32.4 28.3 Cocoa 5.2 6.3 3.7 5.4 4.9 4.4 5.9 Fish, shelfish 5.3 8.5 11.9 17.2 19.6 24.5 20.8 Fruits, nuts 4.6 6.6 8.2 9.2 9.4 8.5 8.3 Crude rubber 12.6 12.5 6.0 6.5 6.0 7.2 6.7 Nonrenewable Resource Products 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Crude minerals V 11.7 10.9 9.9 8.3 6.6 4.6 1.5 Iron ores 13.3 15.6 17.9 16.0 13.6 .2 4.0 Nonferrous ores 25.0 22.2 15.9 17.4 13.9 7.8 3.6 Crude petroleum 44.6 46.0 48.9 48.4 56.6 70.3 88.7 SOURCE: Appendix Table A8. 47 is it surprising to point out that the sharp upturn between 1973 and 1975 was due to the quickly increasing import values of nonrenewable resource products, especially crude petroleum. During these three years nonrenewable resource products grew from 57 percent to 80 per- cent of total resource products measured in nominal terms. During the same period, the share of crude petroleum imports rose from 40 to 71 percent. Because of this substantial increase of crude petroleum, no other resource products imports were growing in rela- tive importance. However, most of the commodities were still in upturn movements. Some exceptions include crude rubber, raw silk, oil seeds, wheat and other cereals. This information is presented in Table 3.8. Resource Products Balance and Relative Resource Product Requirements of Trade Reflecting the differences in growth patterns of exports and imports, the balance in resource products trade varies widely from year to year. Over the twenty years examined, 1956-1975, a deficit was recorded consistently in the first half of the period, but it only occurred in four years during the second half (Table 3.9). The sharpest change in balance was observed in the last three years, when the United States trade of resource products shifted from its largest surplus of $5283 million in 1973 to its biggest deficit of $4521 million in 1975. The deficit was due almost entirely to trade in nonrenewable resource products. Their balance 48 TABLE 3.9.--Net Exports of Resource Products by Type of Products 1956-1975 (value in millions of dollars) Resource Products Year Renewable Nonrenewable T Resource Products Resource Products otal 1956 -371 -905 -1276 1957 115 ~904 ~798 1958 - 46 -1231 -1277 1959 -110 -1450 -1560 1960 993 -1492 -499 1961 1305 -1454 -149 1962 913 -1532 -619 1963 1265 -1327 -62 1964 1413 -1538 -125 1965 1412 -1654 -242 1966 2080 -1750 330 1967 1720 -1520 200 1968 1211 -1716 -505 1969 1058 -1763 -705 1970 1852 -1317 535 1971 2167 -1915 252 1972 3420 -2664 756 1973 10153 -4870 5283 1974 13280 -15439 -2159 1975 12650 -17171 -4521 SOURCE: Appendix Tables Al and A8 49 was persistent in deficit throughout the period. In contrast, trade in renewable resource products has been in surplus since 1960. In relative terms, the relative resource product requirements of trade, that is, the ratio of resource products exports to resource products imports) shows that between 1956 and 1972 the relative renewable resource product requirements of trade fluctuated but generally increased overall. It then combined substantially in the following two years before slightly declining in 1975. The nonrenew- able series moved much smoother; after falling during the first two years, it climbed slowly for almost 11 years between 1959 and 1970. The following four years found it declining rather sharply before weakly rebounding in 1975 (Chart 3.11). Taking a longer view, we observe that the United States has, in fact, experienced a rapid growth in its relative renewable resource product requirements of trade since the end of World War II. As for nonrenewable resource product requirements, a slightly increasing trend is apparent during the period 1945-1970. The period between 1870 and 1945, on the other hand, found both indexes falling sharply (Chart 3.12). By extending forward Professor Vanek's studied period (1870- 1955) for twenty years, (1956-1975), we have thus been able to clarify his findings concerning the United States resource product structure of trade; while he concluded that both renewable and nonrenewable resource product requirements of trade continuously declined during 50 300 " 200 . *0 3’5 6 l ' {1172.4 "1 I : liv---..3'Iv 100 4. ‘0‘ s..-. I dud ”’0 .‘ p O“ r a 9 .6- o 5 ‘ ..r:£.._50uf’c< if. 0.6“ \‘5dc ' J e I} . «4:21:51. ,3.) \o-fl"""“."~.o‘. Q 0‘1'0 1970 1975 1956 ° 1960 1955 Chart 3.ll.--Relative Resource Product Requirements of U. S. Trade by Type of Product 1956-1975. SOURCE: Appendix Table A12. 51 1000 - 800 "' IN~~ ’ ~ 600— ,/ ”\ 500 - lTIlinerol reso ce \ 01' 400 5 requirements /‘\ A 300—- reloiive ‘“~-v’ \ ‘\, /”\ zoo - .‘ \ .. \ ~~_“ \’ \ ~~~~ \ -.-‘~~ \ Ioo- “‘\_.__\ \\ 80 L- \\/’I‘\ P\ 60 " \\ I, \ 50- \ I 40 '- Renewable resource / 30.. requirements, relative 20 F- '0 L L l 1 I 1 1 1 J 1870 1880 1890 1900 1910 1920 1930 1940 1950 1960 Chart 3.12.--Relative Resource Product Requirements of U. S. Foreign Trade, by Type of Product: 1870-1955. SOURCE: J. Vanek, Natural Resources Content of U. S. Foreign Trade: 1870-1955, Figure 8.5, p. 104. 52 1870-1955,3 both indexes in fact did reverse their courses by the end of World War II. It is important to note that the relative resource product requirements of trade indicates the value of resource products actually paid to foreigners for resource products imported. It does not, however, show how dependent the U. S. economy is on resource products of the rest of the world. In Chapter V, we shall deal with the gross resource products requirements per dollar of U. S. foreign trade which is more suitable for judging the changing resource product position of the United States. Let us continue this general survey chapter by turning to another important question, that is, how important, in absolute terms, trade in resource products is for American domestic production and consumption. Trade, Domestic Output and Consumption of Resource Products We shall concentrate on some important aggregates of resource products, namely crops, livestock, wildlife products, forest products, metalic ores, mineral fuels, and other minerals. During the course of twenty years, 1950-1969, over-all real output of resource products in the United States increased by 37 per- cent while consumption of these products rose by 39 percent (Table 3.10). The difference between the increases of consumption and 3J. Vanek, The Natural Resources Content of U. S. Foreigg Trade, 1870-1955 (Cambridge, Ma.: The MIT Press, 1963), p. 105. 53 FiSHE RY AND 5.33:: 200% 1 p 4. . wnLDuFE PRODUCTS -.‘.'°'-., 0 .0 . L~h 5‘ 0“ 3‘ . ‘0'." | ,3 ' 3'." ;.. a: METAL 01255 ..e" I n“.' 0.. fiflm ‘ .03.. ...-f. " an 2,;-.3c; :‘f'-':.'. IHNRTS .10... .' 8.93:... .2: O o: L? -. :.l'.I :‘C‘:.:: it. I '0 I. a. '. " a. . \‘ NET 50“ .. I...‘:g: “...-. .. .0 ::‘o: .\\\\\ Exvok‘l’s iffy. :uf- '- :'~:"= “2‘“; ‘1 5"... ' . a.- 1" ..e‘. . .....-' ;.::;'o;-..'1 I.’.. lb.)o '- L. 3.01:. :‘; P“..- .d: 2:: :‘o .. O "‘ 6*"1 -: :.-.- c: :- . '....;;'.. 1......) '.:-:- 3.5”}: 'iiE'IE'.‘ I-"is'; "1L: : .~E i...“ .oe‘ .0: vh. b :- 0. :.'-'..:. ;‘.‘:' L.':~:" P: :- .'." .::' .11 3:":-: ‘-'.-’.:'---1 . :1“ 'L: n'{-,—" .‘ :a': 135.0. :41N‘R/sl. FU‘L '0. ...'§":.-. 0.. e... :. ' TOTAL RtsouPCE “-3225 :- .-.--' 1 ;.-. -;. .‘v ' a... 'u; .. .0. ..‘0. .: ., . ‘1' "O‘DUCTS a..:. 5:... z’: ’r". €'::o: ~ ...‘ u .0. '8: 2w, cxors ;y .= ; 5;.;; :3 . ~ rat": 7: u -‘-I.-'- ' .. : n . '... . n ‘_'.. .a ‘ ..-; :- 23933:. .34, ,.::.=-‘.'-- huff-~13 FEET 3"“ 100% " lm§ 1950- 1355- 2950- L965 1950- 196.5 1950' 2.9651 1950' 196} [1954 106-9 1954 1969 11954 19(9 1954 1969 1954 1959 7* Chart 3.13.--Trends of U. S. Consumption of Resource Products as Percentage of Production by Type of Product: 1950- 1969. SOURCE: Table 3.10. 54 TABLE 3.lO.--United States Resource Products. Production in Millions of Dollars, Values at 1967 Price and Consumption as Percentage of Total Domestic ProductiOn Agricultural All Resource Products Fishery Minerals and Forest lter and Year Resource Wildlife Products Products . Metallic Mineral Other Total Crops Livestock Products Total Ores Fuels Minerals Production 1950-54 44.402 26,199 10.085 16.114 490 2,983 14,730 1.869 10.846 2.015 l955-59 49.489 29,191 11,090 18,101 478 2.975 16.845 1.971 12.210 2.665 1960-64 53.483 31.554 11,997 19,557 478 2.941 18.510 2,148 13.199 3.163 1965-69 60.677 34.609 13,265 21,344 549 3.207 22.311 2.332 16.042 3.937 Imports 1950-54 6.858 3.415 2.802 613 342 390 2.712 1,488 1,007 215 1955-59 8.216 3,572 2,876 696 399 424 3.821 1.897 1.652 271 1960-64 9.205 3.956 2.974 982 565 502 4.183 1.632 2.212 336 1965-69 11.219 4.247 3,153 1094 805 610 5.557 2,103 2.992 463 Exports 1950-54 3,703 2.445 1,990 456 45 98 1,115 370 644 101 1955-59 4,937 3.329 2.628 701 56 124 1.429 578 708 143 1960-64 6.325 4,650 3.825 824 68 172 1.435 804 437 194 1965-69 7.157 5,123 4.335 788 111 268 1.655 835 533 267 Consumption 1950-54 46.856 26.637 10.231 16.406 787 3.275 16.157 2,936 11.096 2.126 l955-59 51.856 29.434 11.338 18.096 821 3.276 18.983 3.119 13.073 3.79: 1960-64 56,483 30.854 11.209 19.645 974 3.271 21.383 3.142 14.942 3.30: 1965-69 65.002 33.758 12.141 21,618 1243 3.549 26.451 3.939 18.401 4,111 ConsumptiOn (Percentage of ProductiOn) 1950-54 105.52 101.67 101.44 101.81 160.61 109.79 109.65 157.09 102.30 105.51 1955-59 104.80 100.83 102.23 100.89 171.75 110.11 112.69 158.24 107.07 34.69 1960-64 105.61 97.78 93.43 100.45 203.76 111.22 115. 2 146.27 113.20 104.33 1965-69 107.12 97.54 91.52 101.28 226.41 110.66 118.55 168.91 114.70 104.4: SOURCE: tatistical Abstract of the United States. 1972. 0. 605. 55 output is explained by the net balance of exports and imports. We observe that although the United States became increasingly dependent upon foreign supplies of resource products, its dependence on the whole was modest; at its highest,consumption of resource products (1965-1969) was only 7 percent above the domestic production. These over-all figures, however, conceal much more pronounced trends and absolute scarcities in particular sectors. As was expected, crops were the only natural resource prod- ucts in which the United States produced more than it consumed. During 1965-1969 the U. S. consumption of crops was about 10 percent less than its domestic production. In livestock--the most important component of the aggregate--the United States consumed slightly more than it produced throughout the period. Fishery and wildlife prod- ucts, on the other hand, shared the smallest pr0portion in the aggre- gate with respect to both production and consumption. Yet it is in these two sectors the United States found itself most dependent on foreign supplies; during 1965-1969, its consumption exceeded its production by about 70 percent. Although the U. S. dependence was much less serious in the case of mineral fuels (about 15 percent), its production and consumption of the products have increased sub- stantially throughout the period (48 percent and 66 percent, respectively during 1950-1969). Mineral fuels have remained the second most important component in both consumption and production of resource products. The United States has experienced an even faster growth in the production of "other minerals," but its 56 dependence on foreign supplies has somewhat declined over the period. Thus, during the last twenty years, 1950-1969, American dependence on foreign supplies of resource products was rather modest. Statistical evidence, however, seems to indicate that this country became increasingly dependent on resource products imports. Furthermore, break-up of total trade and output into their component parts shows that a number of nonrenewable resource industries has been losing its self-sufficiency at a rapid rate. Finally, it should be remembered that, as Professor Vanek has pointed out the quantitative dependence on foreign supply is only a poor measure of the contribution of imports to national welfare. The size of such benefits cannot be appraised without know- ing how much it would cost to produce substitutes for resource imports domestically. In the case of tropical fruits and metallic minerals, such costs could be extremely high.4 Regional Trade in Resource Products We shall close this chapter by briefly examining the distribu- tion of resource products traded among different regions: namely, North America, South America, Western Europe, Asia, and Africa. Charts 3.14 'to 3.17 summarize the relevant information. Over the course of twenty years examined, 1956-1975, the United States' major trading partners of resource products have been gradually changing. Nevertheless, its sources of supply and demand are still highly concentrated. 4J. Vanek, The Natural Resources Content of U. S. Foreigg Trade, 1870-1965, p. 70. 57 F————"1 OTHEK °THER OTHER ..____.1 . AFRiCA OTHER AFRiCA AFKI'CA (4.27.) (67.) F—'—“ AsiA 1451.0. .4501. (2.7. 27.1 (31.4%) Isa-$2.1 AFRICA (5 ’/. ‘, AsiA ( 55.6%) .._.___—— —_. WESTERN WESTERN EUROPE EUROPE ” ‘ (43.67.) (30.7%)- “51‘5“ 509.01'5 (30.9%) wzsrtim EUROPE (25.87,) ———i 1_____.— SOUTH . . H . AMLTUCA Sour AMERICA , \ 599*" AMER1CA {9 5?“ (10.3%" AMER.“ (117.) ‘ " (12.97.) NORTH NO'R'TH N057“ AMERlCA AHER'CA AMER1CA . 01‘ (11_8’.) NORTH (got) 111°3'4' / AMEKlCA /0 (55-67.) ___.__._.__1 1956-60 1961-65 1966-70 1971-75 CHART 3.14.--U. S. Exports of Crude Foods by Trading Regions, 1956-l975. SOURCE: Appendix Table A13. 58 oTH we F————1 [—-— 1P—I—— OTOO‘k 1.2223“..— m— 0T6!!! MCI? OTHE‘ . . 7.:sz A81». ASIA ASIA (437.1 (30.37.? (as. 87.1 ASlA (43.6}: wzsrsku cutors (56.121 wearers: Eunors (47. .27.) wssreun EUROPE. (ti-1.7%) WESTERN EURO?E ," \ \35' 8):) . SouTh Airgz‘lA AMEYMCA Sou'ri-l AMERitLA SOUTH Nauru Norma ”on.“ AMERICA AMERiCA AMERlCA AMERiCA o ) ' 15 e, e ”‘0‘?” (14' 5/0 \ ’8’.) (158/.7 AMERKA (10.4%) 1956-60 1961-65 1966-70 1971-75 Chart 3.15.--U. S. Exports of Raw Materials by Trading Regions, 1956-l975. SOURCE: Appendix Table A13. 59 On the export side, although Western Europe remained a major customer, its share declined sharply from 44 percent to 26 percent in regard to crude foods, and 56 percent to 36 percent with respect to raw materials between 1956-1960 and 1971-1975. Asia. which gained at the expense of Western Europe,became a growing market for American exports of resource products. During the same period, Asia's share climbed gradually from 28 percent to 36 percent for crude foods and 23 to 42 percent for raw materials. Thus, Asia became the major customer for both types of resouce products. Closer to home, North America's share (mainly Canada's) of U. S. crude foods exports increased over the first seventeen years, then declined in the last three years. This accounted for about 4 percent by 1975. Sales of raw materials to the region also decreased considerably from over 14 percent to about 10 percent between 1956-60 and 1971-75. South America shared about 4 percent of U. S. raw materials exports and the proportion has been quite stable during the last twenty years. Its share of U. S. crude foods, on the other hand, has increased from 11 percent to 13 percent. Exports of U. S. resource products to Africa still remained unimportant although the situation has been improved considerably. On the import side, South America remained the largest sup- plier of crude foods to the United States. Its share, however, declined from 68 to 51 percent between 1956-1960 and 1971-1975. Virtually all other regions gained from these South American losses, but the largest gains went to Asia and Africa whose shares jumped, AFRICA (£15474) ASiA (7.47.) ’oruez I W. EUROPE SOUTH AMERRA (68.17.) ‘1 NORTH AMERi CA 1 *— AFRICA (1.6-67.) AslA {9.520 OTHER . W. EUROPE SOUTH AMERiCA °/ (594/3 HotTH AMEMQA (10.1%) (9.57.) 1956-60 1961—65 60 OTHER AFRiC-A (18.17.) A$1A (117,) w. EuRoPE SOUT’H AMERKA (55.4%) OTHER Arxiu (17);) A51». ('12 35% ‘. w.EuRoPE (sex) NORTH AMeMcA (9.7%) SOUTH Anemia. (522x) Nauru AME 1'.ch (toya) 1966-70 1971-75 Chart 3.l6.--U. S. Imports of Crude Foods by Trading Regions, 1956-1975. SOURCE: Appendix Table A14. 61 OTHER OTHER “—-—— ornew. OTHER AFRicA (187) . ‘ . :41:ch A‘m 5* AFRBCA ,7. 9',1 \. ., .. . AsLA (283‘1 - _ A ASlA AS'A (10.87,) (14.334) ——" AsiA WESTERN (37- 17.) WESTERN EU‘RoPE , EUROPE (13.9%) WESTERN (11.3/‘(1 EUROPE ( 9.7%) WESTERN SOUTH SOUTH SOUTH 'Euskgl-e; AMERiCA AMERlCA Anemia ° A (38.6%) (55.37.) (29.370 SOUTH AMERICA (£12) H, .—“ NORTH NORTH NORTH AMERlCA AMERI'CA NORTH AMER‘CA (277.) (927.) AMERICA (19.7%) (L4.3°/.) 1956-60 1961-65 1966-70 1971-75 Chart 3.l7.--U. S. Imports of Raw Materials by Trading Regions, 1956-1975. SOURCE: Appendix Table A14. 62 respectively, from 7 to 12 percent, and from 11 to 17 percent of total U. S. crude foods imports. Western Eur0pe has increased con- siderably its crude foods sales to the U. S. market. Its share (about 7 percent in 1975), however, was still minor. The changes in American trading partners were much more pro- nounced in regard to raw materials imports. In the early years (1956- 1960) more than 38 percent of raw materials purchases come from South America and only less than 8 percent from Africa. By 1971-1975 the former's average share was 21 percent while the latter's jumped to 23 percent. Most of these African increases were due to the rise in U. S. purchase of crude petroleum from Nigeria. North American share of U. S. raw materials imports advanced in the first fifteen years, then declined in the last five years. By 1971-1975, its yearly average share was 22 percent. Asia's share of U. S. imports of raw materials, on the other hand, decreased during the first fifteen years, then rose substantially during the last five years thus becoming the largest supplier of the products to the United States. Needless to say, the increase was mostly due to the rise in sale values ofcrude petroleum that the United States paid to the Middle East oil exporting countries. The evidence presented in this section is thus consistent with what professor Vanek has observed in his study: . regions experiencing a rapid rate of industrial develop- ment were gradually reducing their mutual dependence on each 63 other's natural resources, turning to other sources in less developed areas where the pressure of domestic demand on natural resources was not so strong. Summary The main features of U. S. foreign trade in resource products, as detailed above, may be summarized as follows: 1. Since the end of World War II, the composition of U. S. imports has shown a remarkable shift away from resource prod- ucts and toward finished manufactures. During the same period, exports have changed rather moderately with finished manufactures remaining a predominant component. As a result, the structures of U. S. exports and imports have become more similar to each other than ever before; by 1966 both sides of trade have become dominated by manufactured products. A quite different picture of trade was found between 1870 and 1945. During these 75 years, exports underwent much more pronounced changes than did imports. Additionally, while the former moved away from resource products and toward finished manufactures, the latter changed in just the opposite direction. 2. Within the two-commodity—classes of resource products, the last century (1870-1975) observed a continued decrease in per- centage share of raw materials in total exports. Raw materials imports, on the other hand, grew at faster rate than did total imports during the first seventy five years (1870-1945). The period between 1945 and 1971 found their share reduced considerably before rebounding in the last four years. With respect to crude foods, the 5J. Vanek, The Natural Resources Content of U. S. Foreigg_ Trade, 1870-1965, p. 54. 64 products exports did not grow as fast as the total exports during 1870-1945. The situation was, however, being reversed in the last thirty years. The share of crude foods imports changed somewhat in Opposite directions. It gained slightly during 1870-1955 and then fell sharply thereafter. 3. In terms of net trade, the last twenty years (1956-1975) found resource products balance in deficit f0r 14 times. The deficit was due almost entirely to trade in nonrenewable resource products. Their balance was persistent in deficit throughout the period. In contrast, trade in renewable resource products has been in surplus since 1960. The relative resource product requirements of trade (the ratio between exports and imports of resource products) shows that the United States has experienced an increase in its relative renew- able resource product requirements of trade since 1945. As for nonrenewable resource products, a slightly increasing trend is apparent during 1945-1970 before declining rather sharply thereafter. The period between 1870 and 1945, on the other hand, found both indexes falling considerably. 4. Given the above changes in U. S. trade partners coupled with the structural changes in the world economy which resulted in relatively more trading opportunities for manufactures as compared to resource products, it appears that since 1945 the United States has increasingly gained in comparative advantage for its renewable resource products, which is quite contrary to its disadvantageous 65 position during 1870-1945. Regarding nonrenewable resource products, this country has experienced a shift from an advantageous to a com- paratively disadvantageous position during the first 75 years (1870— 1945) and it has remained in the disadvantageous position in the next three decades. 5. With respect to U. S. trading partners of resource products, the statistical evidence during the last century strongly indicates that the United States has shifted away from regions experiencing a rapid rate of industrial development and turning to less developed areas where the pressure of domestic demand on natural resources was not so strong. CHAPTER IV TRENDS IN PRICES AND THE RESOURCE PRODUCT PATTERN OF UNITED STATES FOREIGN TRADE Introduction By examining changes in values of resource products traded between this country and the rest of the world, we have seen in the last chapter the changing resource product patterns of U.S. foreign trade over the last century. This chapter will deal with the price behavior of resource products. Taking the trend of finished manu- factured price as a standard of comparison, we shall call attention to some of the empirical regularities of export and import resource price movements. The commodity terms of trade for the products will also be discussed. Our main concerns in this chapter, however, are not so much with the descriptive aspect of price movements, but rather with their meaning in respect to changes in the trade pattern. The last section in the chapter will show that changes in resource prices, however interesting they may seem to be, will not bring about any consistent changes (either increase or decrease) in a country's net trade in resource products. Thus, they cannot serve as indicators of changes in resource product requirements of foreign trade. 66 67 Export Prices of Resource Products Trends in export prices of resource products and finished manufactures as well as the ratios between the two prices are pre- sented in Table 4.1, Table B1 in the Appendix and Charts 4.1 and 4.2. We observe that for most of the years between 1945 and 1970 the export price of resource products increased much less than that of manufactured products. During these twenty-five years, the former rose less than 9 percent coupled with sharp fluctuations, while the latter showed an increase of more than 75 percent with no retarda- tions except one in 1963, when it declined slightly. After 1970 resource price rose progressively; the four years, 1971-1974, showed it rising at a much faster rate than manufactured price (resource prices rose by 125 percent as compared with a 29 percent increase of manufactured price). This is due mainly to an exceptional upsurge of world demand for U. S. wheat and other foodstuffs, which gave rise to sharply higher prices of crude foods. Furthermore, the steep price increase of imported oil during 1973-1974 also resulted in a considerable rise in prices of U. S. raw material exports. Whatever the reasons may be, this shift in relative prices represents a distinct change in U. S. price structure. One has to go far back to a period between 1881 and 1920 to find a similar relation between changes in the two prices. 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S. exports described above were due almost entirely to those of renew- able resource product requirements. As shown in Chart 5.1, the two series fluctuated up and down simultaneously (except in 197l) during the eleven-year period (l965-l975). The nonrenewable series, on the other hand, behaved quite differently. It showed a steady increase with only one minor interruption occurring in 1971 (Chart 5.l). Among the four major commodity export classes (i.e., resource products, manufactured foods, semi and finished manufactured products), resource products accounted for the largest share of resource product requirements of total exports, ranging from 64 percent to 70 percent. The percentages of nonresource products classes were rather minor; about l4 percent for manufactured foods and 15 percent for semi and finished manufactured exports combined (Table 5.5). A further comparison of distribution among the four-commodity classes also revealed some interesting aspects of American exports. As can be seen from Table 5.6, while resource products and manu- factured foods content considerably more renewable resource product requirements than nonrenewable ones, the opposite was true regarding semi and finished manufactured classes. These differences, however, have been less pronounced during the last eleven years as the share of nonrenewable resource product requirements of U. 5. resource products exports increased from l8 percent to 22 percent, and that of semi and finished manufactured exports was shrunk from 73 to 63 percent and 73 to 69 percent, respectively. 97 1967 Millions of Doll§r§ P L I“ 0 o‘ 1' ‘. I “ L I, ‘\ 15,000 ' ‘\ I . “Co--1 L '. J l I I . I b ; .\ g I \ , I \ ’1 .' \ I, I, ‘\ b cw“) I' .' ‘s o , .~. I a \ Q( O .‘50’ .. ‘ I \ l ' \ b c" l : ‘ I'T L 6;," 9' ‘\ "I a R b I x ' ’ {0*‘. <1 ’ U 10 000 ’ ,..-._ ’,40‘ .....l 3.: , ’l’ \-¢l 2.. I (O ' '1 & ’l I p 901’ < I new; \c 91’ ‘ \‘3 0" r" 5 tell?! # I'I~~~- "'~‘ if], ’ “ " I 1' " .‘J l 5,000 l b l’“--‘ l ‘h(c ‘3 ’ ’5‘- -\U I ’ 1"" “ fogm-crtc. Fret“, 3,000 NWII" ‘ '-.----- 0'9"" cc.””" 2,00 1965 1970 1975 Chart 5.l.--Trends of Direct and Indirect Resource Products Con- tained in U. 5. domestic Exports, by type of Resource Products, for l965-l975. Source: Table 5.1. 98 Let us now turn our attention to imports. Direct and indirect resource product requirements of U. S. competitive imports exhibited a growth pattern different from those of exports over the same period (1956-1975). They showed none of the sharp fluctuations that were present in exports and no retardation except in 1975. The first six years of the period found them climbing slowly but consistenly from $8361 million to $10378 million. They then expanded substan- tially over the next two years, reached their peak at $14231 million in 1974 before declining slightly in the following year as the United States experienced the most severe recession of the postwar period (Chart 5.2). within the aggregate, nonrenewable resource product require- ments of imports increased much more rapidly than renewable ones. This comparison was particularly true during 1971-1975 as the non- renewable trend expanded vigorously while the renewable series fell sharply. Over the period as a whole, the former rose by more than 100 percent from $4471 million to $9448 million, while the latter declined slightly from $4491 million to $4155 million. A comparison of the resource product requirements of the four different commodity import classes also reveals some interesting prospects of American imports. During the last eleven years imports of resource products, as was to be expected, accounted for more than one half of resource product requirements of total competitive imports, ranging from 52 to 65 percent. Over the same period, resource product requirements of finished manufactured imports increased sharply from less than 1967 Millions of Dollars 99 15000 n ’0‘ , s I’ ~“ 'I. ‘s‘ I I I «b I I I I I I I D ‘9" I .\."I Idol, 1» LDQ:”’ E 1250):": a .-" 10000 . «at I 0000000 ~--- I’ I, ~ I, ’I (y ”’0' I, nnnnnn ' ’ 0-. I I 4r 1’ :~"x 23" O I 4‘.’ v I 1” 1 gfil” I g r C I ' \ t3 v .v‘ is Ré'nc I" I ‘ Cbk‘ ‘s r01": ''''' I " q( “\ 5000 . ........... , 4.0 ~. ’ --- ..- ’.;:llfl ..k;’”cwabI€ Q65. 3“,! \~.. (:or ' ”’ 0' c‘ 4000 1 “xx" 3000 . 2000 1000 J J 44 . 1965 1970 1975 Chart 5.2.--Trends of Direct and Indirect Resource Products Con- tained in U. S. Competitive Imports, by Type of Resource Products, for 1965-1975 (1967 millions of dollars). SOURCE: Table 5.2. 100 12 percent to 18 percent of resource product requirements of total competitive imports. Certainly, this increase is due to the fact that there was an increasing share of manufactured imports in total imports as shown in Chapter III. The percentages of the other two nonresource product classes, namely manufactured foods and semi- manufactured imports were rather small. Moreover, they showed a sharp decline during the last five years. By 1975 the two classes combined accounted for about 16 percent of resource product require- ments of total competitive imports as shown in Table 5.7. Table 5.8 further conveys the import picture by comparison of distribution between its renewable and nonrenewable resource product requirements. Unlike exports, the import distribution strongly favored the nonrenewable resource product requirements whose share climbed from less than 50 percent to nearly 70 percent of the total resource product requirements during the last eleven years. In addition, there are two other important differences between exports and imports. One is that resource products imports as a whole contains more nonrenewable resource products than renewable ones; the other, that there was a substantial increase in the share of nonrenewable resource products in total resource product require- ments of manufactured imports. This latter finding is, in fact, con- sistent with that of Robert Lipsey. Indeed, in his study of price and quantity trends of U. S. foreign trade, Lipsey found that between 1949 and 1960 the composition of U. 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New. _~m_ o~a_ oom— moo— New. com. meg. meeaeeea weeeemez .eeeuez 11'1“”. F ii.“ n.' ”33 “w“ Iln “:41qu 34.1; "I.” 53".: Amgowpoc wo meow_—wz ~22_ cwv mum—-momp wo muuavoga mucaomma wo wnaw 22 xpuuogw2:_ 2cm xpuumewo 2625c» muuauoce muezommm mueoaxu uaz--.m.m m2m 22222.22 22w 222..22 N22. 2. 222225. 2>222222ee2 we 22223 222.2>.222 22 222 22Le2x2 2.22252: .2 .2 we 52223 222.2 :2 222222222 22222222 22222222 22222222 2:2 2222.2:u....2 222 0.195 0.174 l.l90 0.958 Given the above figures, the rate of changes in demand for resource products (3R, 3”) can easily be computed as follows: dR (3,. 0.735 0.815 122 Although we do not estimate the income elasticities of manu- factured goods in both the United States (es) and the rest of the world (an), the following inequality holds: A eM< w eM It then follows that: 6R < 1 (13) BM < 1 (14) 0M < l (15) Inequalities (l3) - (l5) clearly indicate that the relative changes in income during the last eleven years have brought about a relatively higher demand for goods abroad than here at home. Thus far, we have not considered the effects of population growth in our demand analysis. As indicated in Table D3 in the Appendix, the last decade saw a relative increase in the world's population as compared to that in the United States. These figures imply that, other things being equal, the pressure of demand is weaker in America than abroad. The effects of changes in income and population have thus reinforced each other to call for increasing relative resource product requirements per dollar of U. S. trade, a conclusion which is compatible with our findings on renewable resource product trade 123 pattern during the entire period, l965-l975. The two effects, how- ever, only verified the behavior of the nonrenewable resource product trade index during the first six years, l965-1970; it failed to explain the declining part of the series during the later years, l970-l975. Furthermore, due to the fact that Y was larger during l970-l973 than it was during l966-l970, the renewable resource product requirements per dollar of trade would rise faster in the earlier years. This expected impact was, however, not shown in our findings. Consequently, we have reasons to believe that the supply conditions of the economy or other factors were also responsible for the changes in the resource product patterns of U. S. trade during the examined period. Changes in Supply Conditions Recall from our theoretical model, the production function for good j, X3, is of the input-output type: xS xS x5. K L x? = .ll. .21. .31. _J_. _J_. _J_. ) = 1 2 3 J 1111" (a , a 9 a 9 9 9 b 9 e] 9 J 9 9 13 23' 33' K.) L.) M.) ‘ where 6 represents the state of technological knowledge. L and M denote renewable and nonrenewable resource inputs while K is a composite dose of remaining factors. Changes in factor supplies or technology will theoretically induce changes in the resource struc- ture of trade. We wish now to empirically examine these relations. Owing both to conceptual and statistical difficulties that prevent us from obtaining meaningful data for natural resource inputs 124 (which were discussed in Chapter I), we shall only examine in this section the effects of technological changes and will make some inferences concerning the changing relative abundance of natural resources in the next chapter. Our first task here is to obtain data representing changes in technology in the United States as well as in the rest of the world during the past decade. Following Professor Vanek, we use data show- ing productivity changes to describe the state of change in tech- nology. It should be noted, however, that productivity data is far from perfect. Before approaching the actual data, let us briefly discuss some of the problems concerning the measurement of productiv- ity itself. Labor productivity and total factor productivity are the two most widely used measures of productivity in Economics. The former is only a partial index which compares output with labor without giving explicit recognition to the contribution of their inputs. Changes in such an index reflect, among other things, changes in the substitution of one input for another. The latter measure (total factor productivity), on the other hand, is designed to reflect changes in productivity efficiency and leave out the effects of factor substitution. This method of estimating productivity, however, runs into problems of weighting of productivity indexes of each factor into a single index. Over and above these measurement problems, there are concep- tual problems that are inherent in any available method of estimating 125 productivity growth. Firstly, any productivity estimate is deduced either explicitly or implicitly from a production function. Some of the assumptions that are required for identification of production function, impose unrealistic constraints such as perfect substitu- tion between old and new capital, a constant rate of depreciation, etc. Secondly, most of the productivity indexes employ private sector real gross national product as the output component. But GNP does not adequately register improvements in the quality of goods and it is largely unaffected by the introduction of new products. As a result, the growth of real output and productivity is under- stated. Thirdly, on the input side, the chief conceptual problem is how to relate technical progress with labor and capital inputs via a measure of quality. Many attempts have been made to get around this problem, but none have given a satisfactory answer. In essence, each, as Professor Vanek put it, "only shift the problem to another plane and do not eliminate the basic difficulty."3 Thus, the present productivity estimates are only crude approximations of perfect measures. Nevertheless, we must use such estimates, hoping that certain magnitudes derived from statistical observation actually reflect the true state of technological changes. We shall rely on the rates of changes in real product per man hour as estimated by John Kendrick as evidence of productivity changes in agriculture, mining, and manufacturing in the United 3J. Vanek, The Natural Resources Content of U. 5. Foreign Trade, 1870-l955, p. 94. 126 States between 1966 and l973. This is not to ignore total produc- tivity index which is somewhat more appropriate for comparison of productivity performance among different industries, but such a measure is not as plentiful as the measure of output per man hour. As can be seen from Table 6.2 while agricultural sector has grown at a considerable higher average rate than manufacturing, the mining industry has remained quite behind that of the other two SECtOY‘S. TABLE 6.2.--Trends in Real Product per Man Hour in the U. S. Private Domestic Economy by Major Industry Divisions (Average Annual Percentage Rates of Changes, l966-l973, by sub-periods) Economic Sector l966-l969 1969-l973 Private Domestic Economy 1.7 2.9 Agriculture 6.7 5.3 Mining l.8 0.2 Manufacturing 2.7 4.5 SOURCE: John Kendrick, "Productivity Trends and Prospects," U. S. Economic Growth from l976 to l986: Prospects, Problems, and Patternsg Vol. l. Productivity (Joint Economic Committee 94th Congress, 2nd Session, Washington, D.C., l976), p. l9. Although statistics concerning the rest of the world are less accurate, we have reasons to believe that over the last ten years productivity in agriculture rose at a faster rate in the United States than abroad. The U. S. advances in manufacturing and mining, on the 127 other hand, were much slower than that in the rest of the world (Table 6.3). It is interesting to note that this comparatively advantageous pattern was almost exactly opposite to that during l870- 1955.4 The evidence concerning relative productivities during the last ten years, through the mechanism of our model, is consistent with the increase of renewable resource product requirements of trade, but it only partially explains the behavior of the nonrenew- able resource product requirements. That is, with all other condi- tions unchanged and taking into account the changes in technology, nonrenewable resource product requirements per dollar of trade should have declined for the entire period. Our findings, however, showed it increased during the first five years, l965-l97O before declining thereafter. Thus, none of the factors explain satisfactority the behavior of both renewable and nonrenewable resource product structure of U. S. trade. This result is not too surprising in view of the fact that our trade indexes may be affected by simultaneous changes of many factors, including the three that we have examined. The Combined Effects We shall, therefore, close this chapter by briefly consider- ing the impacts of the combined changes in all three factors on the U. S. pattern of trade over the last ten years. For renewable 4J. Vanek, The Natural Resources Content of U. S. Foreign Trade, l870-1955. PP. 94-lOl. 128 TABLE 6.3.--Annual Percentage Rates of Change of Productivty in Manufacturing, Mining, and Agriculture for Selected Countries, Areas for l966-l975, by Subperiods A. Manufacturing (Real Product per Manhour) Country l966-75 1970-74 l974-75 The United States 2.0 2.7 -0.2 Canada 3.9 3.6 l.5 Japan 9.0 7.l -3.1 France 4.9 5.0 -4.3 Germany (F.R.) 5.3 5.8 3.3 Italy 5.8 7.6 -3.0 Sweden 5.8 5.8 -3.4 United Kingdom 3.3 4.4 -3.1 B. Mining and Quarring (Real Product per Employee) Country, Area l966-70 1970-73 The World 7.72 5.05 The United States 5.l7 0.l3 The Developed Market Economy 7.86 4.35 The Developing Market Economy 8.56 3.24 Centrally Planned Economy 6.88 7.22 C. Agriculture Area l966-l970 l970-l975 The World 2.22 2.l6 The United States 8.ll 8.77 Europe 6.22 5.l3 North America 2.40 3.06 South America l.96 2.50 Asia 2.55 1.88 Africa 2.04 0 SOURCES: Table 6.3A: Bureau of Labor Statistics. Table 6.38: Data computed from production index and employee index, United Nations, Yearbook of Industrial Statistics, 1976 Edition. Table 6.3C: Data computed from agricultural produc- tion index and economically active population in Agriculture, FAO, Production Yearbook l977, Vol. 3l. 129 resource products, the effects of changes in the three factors have reinforced each other to call for increasing relative renewable resource product requirements of trade. This expected trade pattern is generally compatible with our findings. Moreover, the fact that U. S. agricultural productivity rose more slowly during 1966-1970 than during 1970-1973 seems to be responsible for the sharper increase found in the renewable trade index during the latter years. In the case of nonrenewable resource products, just how to weigh the opposite effects of the three factors on our trade pattern cannot be firmly determined in this analysis. What evidence there is, however, suggests that over the last ten years while relative change in income and population were mainly responsible for the rising part of the relative nonrenewable resource product requirements of trade (1965—1970) technological changes seem to be the main forces behind the declining part of the index (1970-1975). Furthermore, that the two effects have offset each other is compatible with the more moderate rate of change found in the nonrenewable index as com- pared to that of the renewable one. The evidence concerning relative changes in productivity, income, and factor endowments during the earlier period, 1870-1955, also led Professor Vanek to believe that the three factors were the main forces behind the decline of both renewable and nonrenewable resource product requirements of trade during his examined period: The evidence concerning relative productivities is entirely compatible with the decline of replaceable resource require- ments of trade, but it cannot explain the trend of the mineral resource requirements. 130 In the case of nonreplaceable resources, we have argued that it is mainly the growing scarcity of mineral resources which offsets the impact of productivity. Another cause of a steeper decline of mineral resource requirements of trade can be seen in different income elasticities of mineral and nonmineral resource products, combined with a faster growth 5 of the American economy and a higher absolute level of income. Admittedly, neither Professor Vanek's analysis nor ours has fully explained the changing resource product structures of U. S. foreign trade. A lack of data for sufficiently long periods of time has been our main difficulty. Indeed, our statistical attempts to relate changes in resource product structures of trade to simul- taneous variations in technology, population, and income have not 6 been successful. Nevertheless, we share with Professor Vanek his 5J. Vanek, The Natural Resources Content of U. S. Foreign Trade, 1870-1955, p. 114. 6By fitting annual data for the 1965-1975 period through the use of a single equation least-squares method, we obtain the following results: RRP = 209.86 + 0.596 TR/ - 0.l38Y - 1.476 U (0.631) TM (1.044) (1.961) (1) R2 = .715 NRP = -l67.02 + 2.176 TN/ - 2.975 Y + 3.456 U (2) (0.443) TM (0.566) (1.409) R2 = .904 where: RRP = Index of renewable resource products structure of U. S. trade (1970 = 100) NRP = Index of nonrenewable resource product structure of U. S. trade (1970 = 100) T = Index of relative change in productivity in U. S. renewable resource product sector as compared to that of the world (1970 = 100) 131 view that "in the absence of more accurate statistical information and greate resources than those available to the present writer, our empirical work is not without significance." A brief comparison of Professor Vanek's findings with ours indicates that not only has the U. S. pattern of trade in resource products changed drastically between 1870-1955 and 1965-1975, but also that the factors (that influence the trade pattern) shift in almost exactly opposite directions between the two periods. Finally, it should be noted that while our trade indexes were based on direct and indirect resource product requirements of trade, those of Pro- fessor Vanek were actually estimated from the immediate resource products traded between the United States and the rest of the world. In other words, he did not consider the resource products flowing into and out of this country as inputs of nonresource products. Thus, we have reasons to believe that our trade indexes are more meaningful than those calculated by Professor Vanek. T = Index of relative change in productivity in U. S. nonrenewable resource product sector as compared to that of the world (1970 = 100) TM = Index of relative change in productivity in U. S. manufactured sector as compared to that of the world (1970 = 100) Y = Index of relative change in U. S. gross domestic products as compared to that of the world (1970 = 100) U = Index of relative change in U.S. population as com- pared to that of the rest of the world (1970 = 100) Figures in parentheses are standard errors of the coefficients. For a detailed description of the data, see Appendix D to this chapter. CHAPTER VII RELATIVE ABUNDANCE OF NATURAL RESOURCES IN THE UNITED STATES Introduction Having studied the changes in resource product pattern of U. S. foreign trade over the last century, we wish now, based on these changes, to draw some inferences about the actual changes in the natural resource pattern of trade. Specifically, we would like to discover the conditions under which changes in the indexes of relative resource product requirements per dollar of U. S. trade indicate changes in the natural resource pattern of trade itself. The merit of this examination is that it may allow us to use the indexes to infer the relative abundance of U. S. natural resources as compared with that of the rest of the world. The analytical approach used in this chapter is closely related to Professor Vanek's,1 but there is a conceptual difference between Professor Vanek's statistics and ours. While Professor Vanek dealt with the resource requirements of total trade, here we are concerned with relative resource requirements per dollar of trade. The former index indicates the value of trade actually received from and paid to foreign countries for resource exports 1J. Vanek, The Natural Resources Content of U. S. Foreign Trade, 1870-1955, pp. 120-139. 132 133 and imports, while the latter is more suitable for judging the chang- ing resource intensities of the United States foreign trade. Professor Vanek's Index of Resource Requirements Let Rx and Rm be, respectively, the direct and indirect resource product requirements per $1,000 worth of U. S. exports and imports. Following Professor Vanek, we assume that both Rx and Rm can be decomposed into two parts: (1) the part imputable to the productive services of natural resource (L), and (2) that inputable to the services of other factor (T). Using the corresponding sub- scripts, we can write: R=LX+T (1) R = Lm + T (2) The index we are interested in is the rate at which productive services of domestic natural resources exchange for productive ser- vices of foreign natural resources through an equal amount of exports and imports, namely, the relative resource requirement per dollar of trade: RR 7— f— X (3) S If the share of income of natural resources in the direct and indirect resource product requirements is stable over time, i.e., L/R = K, where K is a constant, then (3) becomes: 134 RR = K Rx (4) where Kx and Km are some constants but not necessarily equal. If only changes in relative resource requirements per dollar of trade, RR, are being considered, then it is clear from (4) that the more stable the share of income of natural resources in gross R resource product requirements, L/R, the better -§-will be as an Rm estimator of RR. Although the conditions under which L/R is stable are rarely met in reality, there is a strong presumption that changes in factor supplies, technology, or demand conditions may affect the volume and value of trade but will not seriously affect the share of rent per dollar of trade. That is, changes in volume of an aggregate of resource products in total exports or imports will be roughly pro- portional to changes in resource contents. Let us now turn our attention to the problems of computing g:-. A great deal of data concerning the flows of resource commod- ities into other industries within the U. S. economy as well as R throughout the world is required to construct the true value of-§5 . m As indicated in Chapter V, such information is not available. To avoid this bottleneck, we, following Professor Vanek's lead, turn to consider the indexes of relative resource product requirements per dollar of trade, RR that was computed in Chapter V, namely, 135 70 (5) x a nlx where R; is the gross resource product requirements in $1,000 worth of competitive imports. R Essentially, RR is different from fii in two aspects. First, m the method of computation of RR implies that resource product con- tents per dollar of resource products and nonresource products remain unchanged over the entire period under consideration. Clearly this is not so in reality. Technological advances could alter the input coefficients of the input-output table from year to year, thus hav- ing some effect on the validity of our findings. In addition, relative changes in input prices or policy constraints imposed by government also induce changes in the input coefficients. These changes, however, as shown in Chapter V, do not cause serious error. The second source of bias comes from the fact that only com- petitive imports were taken into account in computing RR complemen- tary imports have been excluded from the calculation. Naturally, our import statistics would have been larger if both types of imports had been considered. The latter, however, could not be included in the calculation because they are not produced in the United States and thus the type of technology used to produce them is unknown. Considering this second source of bias, Professor Vanek discovered that if only changes in relative natural resource requirements per dollar of trade, RR, are concerned, then we shall not commit any 136 serious error by imputing the resource product requirements of com- petitive imports replacement of resource commodities to all product imports. This is because of the following two reasons:2 1. The bulk of American complementary imports has con- sisted of resource products; only a negligible part of complementary imports falls into the group of manu- factured commodities. 2. The bulk of resource requirements embodied in a resource product is the particular product itself, whether produced in the United States or elsewhere. It follows from the above analysis that if we are concerned only with changes in RR over time, then given our simple model, rela- tive resource product requirements per dollar of trade, RR, would well serve as an estimator of RR. Based on the results of our findings about RR in Chapter V, we may now make the following conclusion about the natural resource patterns of U. 3. foreign trade during the course of the 45 years before 1945 the United States shifted from a net exporter to a net importer of renewable and nonrenewable resources. Since the end of World War II the trade patterns of the two types of resources have gone in different directions. Over these thirty years while this country still remained a net importer of nonrenewable resource, it has not only shifted back to a net exporter of renewable resources, but this shift has become ever more pronounced. It should be noted that due to the crude nature of our estimator, we should be cautious in trusting the absolute level of the indexes at each point in time. 2J. Vanek, The Natural Resources Content of U. S. Foreign Trade, 1870-1955, pp. 126-127. 137 Changing Resource Supplies in the United States We wish now, based on our estimators of relative resource requirements per dollar of trade, to infer about the relative abun- dance of U. S. natural resources as compared with the rest of the world. Economic theory dealing with this relation has been known as the factor proportions theory which was first introduced by E. F. Hechsher and B. Ohlin. The theory states that a country's exports use intensively the country's relative abundant factors. In terms of our analysis, we may state that the relative endowments of a country engaging in foreign trade will be reflected in the relative factor requirements of its exports and imports. If we were living in a world in which all of the assumptions of the factor-proportions theory were fulfilled, our conclusion con- cerning the relative abundance of U. S. natural resources would be quite straightforward. That is, over the last thirty years (1945- 1975), the United States became relatively richer in renewable resources while it became poorer in nonrenewable resources. The period from 1900 through 1945, on the other hand, found both types of natural resources becoming increasingly scarce in the United States as compared with the rest of the world. As is well known, the factor proportions theory holds only if special assumptions are made, assumptions such as identical pro- duction functions throughout the world for each good, constant return to scale of all production functions, identical consumption patterns among countries at a given set of commodity prices, perfect 138 markets, no transportation costs, complete international immobility of productive factors, etc. Clearly, not all of the above assumptions hold true in the real world. As seen in the last chapter, changes in population, incomes and technological differences were all responsible to some extent for the changing resource product pattern of trade. Whether these factors could explain the entire trends of U. S. natural resource trade indexes is extremely doubtful. Argued Professor Vanek: It is not that we should be willing to defend the view that each minor deviation from theoretically prescribed conditions would make an empirical inference invalid (or impossible). If this were so, the economic theorist's value of marginal product would be very low indeed. But the least we can do is to keep these disparities between the real world and our assumptions clearly in mind and, if possible, learn in what ways they affect our conclusion. In closing, let us briefly discuss the effect of nonzero transportation costs, various costs, and inequality between tech- nologies in the two trading partners on the resource structure of trade. Nonzero transportation costs can generally be expected to bias trade against resource products. But the bias is likely to operate equally strongly on exports and imports. It might accentu- ate the changes in relative resource intensities of foreign trade but could hardly reverse their directions. 3J. Vanek, The Natural Resources Content of U. S. Foreign Trade, 1870-1955. 139 Regarding the production functions, it is hard to judge to what extent they actually resemble the conditions of constant costs for we can only be sure of constant costs whenever there exists perfect competition in all industries. But decreasing costs are certainly a vital force in international trade. They explain the increasing specialization of the United States as well as of the world in manufacturing. But it is doubtful that these decreasing costs could explain the entire trends of U. S. natural resources trade indexes. Equality between technologies in the two trading partners may be the most unrealistic assumption. As seen in the last chapter, technological differences do exist between the United States and the rest of the world. Very often we find technologies which are known in one country but not yet in use in other parts of the world. This leads to the concept of "new goods" which are subject to a strong demand pull. But new goods are most often of the manufactured goods; almost all resource products belong to the group of traditional goods (old goods). Conclusion We have thus constructed in this chapter the indexes of natural resource structure of U. S. foreign trade and have used them to assess the relative abundance of U. S. natural resources as com- pared with the rest of the world. Under a set of simple assumptions, it may be inferred that since 1870 the U. S. has become steadily 140 poorer in nonrenewable resources while its renewable resources have been increasingly richer since 1945, reversing its early trend between 1870 and 1945. During these 75 years, American renewable natural resources were increasingly scarcer as compared with the rest of the world. To reach these above features, we make use of Professor Vanek's methodology of constructing indexes of natural resource structure of U. S. foreign trade. His problem was to link the non- measurable relative natural resource requirements per dollar of trade to the measured relative resource product requirements per dollar of trade by making certain assumptions. As Professor William Branson once wrote "choosing the right assumptions and making the right linkage is the crucial art in empirical economics."4 Professor Vanek's statistical method presented in this chapter is, indeed, an excellent example of the practice of this art. 4William H. Branson, Macroeconomic Theory and Poligy (New York: Harper and Row, Publishers, 1972), p. 178. CHAPTER VIII SUMMARY The main features of United States Resource Product Struc- tures, as detailed in this study, may be summarized as follows: 1. Since the end of World War II, the composition of U. S. imports has shown a remarkable shift away from resource products and toward manufactures. During the same period, exports have changed rather moderately with finished manufactures remaining a predominant component. As a result, the structures of U. S. exports and imports have become more similar to each other than ever before. A quite different picture of trade was found between 1870 and 1945. During these 75 years, exports underwent much more pronounced changes than did imports. Moreover, while the former moved away from resource products and toward manufactures, the latter changed in just the opposite direction. 2. Within the resource product structures of trade, our findings indicate that during the course of the 75 years before 1945, the United States shifted from a net exporter to a net importer of both renewable and nonrenewable resource products. Since the end of World War II, the trade patterns of the two types of resource products have gone in different directions. Over the thirty years 141 142 between 1945 and 1975 during which this country still remained a net importer of nonrenewable resource products, it not only shifted back to a net exporter of renewable resource products, but this shift became ever more pronounced. 3. With respect to United States trading patterns of resource products, the statistical evidence during the last century strongly indicates that this country has shifted away from regions experiencing a rapid rate of industrial development and turning to less developed areas where the pressure of domestic demand on natural resources was not so strong. 4. Our empirical analysis further suggests that relative changes resulting from various technological advances, income increases and population growths between the United States and the rest of the world have been the main forces behind the movements found in the resource patterns of U. S. foreign trade during the examined period. 5. Under a set of simple assumptions, one could infer from the above findings that over the last thirty years (1945-1975), the United States became relatively richer in renewable natural resources while it became poorer in nonrenewable natural resources. The period from 1900 through 1945, on the other hand, found both types of natural resources becoming increasingly scarce in the United States as compared with the rest of the world. To reach these findings, we make use of Professor Vanek's methodology of constructing an index of natural resource pattern of 143 U. 5. foreign trade. Owing both to statistical and conceptual diffi- culties, we follow Professor Vanek in substituting the value of resource products for economic rent as an index of resource contents of U. S. trade. There is, however, a distinct conceptual difference between Professor Vanek's statistics and ours. While he measured the direct and indirect resource product requirements of total U. S. trade, we are concerned with gross resource product requirements per dollar of trade. The former index indicates the value of trade actually received from and paid to foreign countries for resource product exports and imports, while the latter is more suitable for judging the changing resource product position of the United States. Another important difference between our work and Vanek's is that while we detailed our studied framework in input-output terms, Pro- fessor Vanek did not. Thus we were able to eliminate a discrepancy between theoretical framework and empirical findings which were found in Vanek's work. Admittedly, the statistics presented in this study and the inferences drawn, like those shown in Vanek's twenty years earlier, are still very crude ones. Neither Vanek's nor ours has fully explained the changing resource product structures of U. S. foreign trade. A lack of reliable data for sufficiently long periods of time has been our main difficulty. Indeed, our statistical attempts to relate changes in resource product structures of trade to simultane- ous variations in technology, population, and income have not been successful (Chapter VI). Nevertheless, we share with Professor Vanek 144 his view that "in the absence of more accurate statistical informa- tion and greater resources than those available to the present writer, our empirical work is not without significance." APPENDICES 145 APPENDIX A STATISTICAL APPENDIX TO CHAPTER III '146 APPENDIX A STATISTICAL APPENDIX TO CHAPTER III Notes on Tables Al and A5 The information presented in these tables has been taken from (1) J. Vanek, The Natural Resources Content of U. S. Foreign Trade, 1870-19551 for the period between 1870 and 1955; (2) Indexes of U. S. Exports and Imports by Economic Class: 1919 to 19712 for the period between 1956 and 1971; (3) the foreign trade section of the Statistical Abstract of the United States, 19773 for 1972-1975. Note that the Vanek's information is itself from the Statistical Abstract of the United States. For certain periods he had computed the five-year averages. Others were already available. Notes on Tables A2 and A6 In computing the values of trade in real terms (1967 millions of dollars), we have used unit value as a price index. The necessary 1J. Vanek, The Natural Resources Content of the U. S. Foreign Trade, 1870-l955 (Cambridge, Ma.: The MIT Press, 1963), Chapter 5, Tables 5.4-5.9, pp. 59-64. 2U. S. Department of Commerce, Indexes of U. S. Exports and Imports py_Economic Class: 1919 to 1971 (Washington, D.C.: Govern- ment Printing Office, 1972). 3U. S. Department of Commerce, Statistical Abstract of the United States, 1977 (Washington, D.C.: Government Printing Office, 1978). 147 148 data for the information contents in these tables are from (1) Indexes of U. S. Exports and Imports by Economic Class: 1919 to lgzl_for 1956-1971 period; and (2) the foreign section of the Statistical Abstract of the United States, 1977 for 1972-1975. Notes on Tables A4 and A8 Data on exports (or imports) of nonrenewable resource prod- ucts were estimated by adding the export (or import) values of crude minerals, iron ores, nonferrous ores, silver ores, platinum ores, rough and uncut diamonds, coal, and crude petroleum. Estimated value of exports (or imports) of renewable resource products was simply the total value of resource products exports (or imports) minus the estimated value of nonrenewable resource products exports (or imports). The principal sources of data for these tables are from the United States exports and imports section of the United Nations Commodity Trade Statistics Accordipg to the Standard International Trade 4 Classification. Notes on Tables A13 and A14 Data for Table A13 and A14 are also taken from the U. S. exports and imports section of the United Nations Commodity Trade Statistics according to the Standard International Trade Classifica- tion. In estimating the U. S. trade of crude foods, raw materials 4United Nations, CommoditypTrade Statistics According to the Standard International Trade Classification (New York, published annually),’1956-1975. 149 for each region, we have based our calculations on the following commodities which have been classified by the U. S. Department of 5 Commerce as principal components of resource products: Crude Foods Exports Grains, unmilled Vegetables, fresh or dried Fruits, fresh Nuts, edible, fresh, or dried Shellfish, fresh, frozen, or salted Poultry, live Other crude foods Raw Materials Exports Soybeans and other oilseeds Coal, coke, and briquettes Nonferrous ores and concentrates Tobacco Cotton and lintens Fertilizers, crude Animal fats and oil Hides and skins, undressed Iron ores and concentrates Pulpwood in chip form Petroleum, crude 5U. S. Department of Commerce, Indexes of U. S. Exports and Imports by Economic Class: 1919 to 1971(Washington, D.C.: Govern- ment PrintTngTOffice, 1972), Tables 82 and B3, pp. 23, 26. 150 Hops, fresh or dried Flaxseed or linseed Wood and other animal hair Other crude materials Crude Foods Imports Raw Coffee, green Fish, fresh, dried, or frozen Fruit and nuts, fresh Cocoa beans Live animals Tea Spices Barley, unmilled Other crude foods Materials Imports Petroleum, crude Nonferrous ores, concentrates Iron ores Natural rubber and similar natural gums Precious stones, unwroght Asbestos and other nonmetallic minerals Tobacco Wool and other animal hair Hides and skins, undressed Platinum 151 Oilseeds Natural abrasives Crude vegetables Pulpwood logs Rough timber Raw cotton Silk Other crude materials 152 TABLE Al.--Va1ue of U. S. Exports, by Economic Classes: 1870-1975 (In Millions of Dollars) a gig—fl Period Resource Products :23::. 32:3; aggiihed T t 1 Ending Eggg: ngerials Total Products Progucts 0 a $3 Sgars) Yearly Averages 1880 117 216 333 129 26 87 575 1890 136 269 405 189 39 117 750 1900 183 296 479 256 82 189 1006 1910 165 493 658 317 205 409 1589 1915 205 717 922 334 359 716 2332 1920 588 1159 1757 1133 987 2540 6417 1925 420 1187 1607 601 537 1566 4310 1930 300 1144 1444 456 663 2126 4689 1935 77 601 678 177 289 847 1989 1940 119 603 722 175 611 1658 3167 1945 165 573 738 1154 931 7098 9922 1950 972 1629 2601 1161 1295 6612 11672 1955 1080 1976 3056 775 1765 9590 15189 1956 1332 2515 3847 1264 2780 11054 18945 1957 1332 3110 4442 1163 3254 11823 20682 1958 1280 2139 3419 1102 2283 10947 17751 1959 1448 1913 3361 1078 2477 10534 17450 1960 1645 2588 4233 1117 3534 11473 20357 1961 1898 2545 4443 1151 3286 11838 20718 1962 2010 2234 4244 1366 3041 12753 21404 1963 2273 2579 4852 1496 3381 13373 23102 1964 2540 2897 5437 1687 4226 14947 26297 1965 2587 2888 5475 1590 4114 16008 27187 1966 3198 3143 6341 1582 4368 17703 29994 1967 2595 3293 5881 1596 4489 19265 31238 1968 2334 3467 5801 1671 5117 21609 34195 1969 2085 3475 5560 1782 5774 24345 37461 1970 2748 4492 7240 1921 6866 26563 42596 1971 2677 4563 7240 2021 5678 28553 43492 1972 3737 5242 8979 2324 6162 31513 48979 1973 8804 7826 16630 3524 9250 40820 70223 1974 10390 11171 21561 4195 14193 57197 97146 1975 11805 10884 22689 4221 12815 66431 106156 SOURCES: 1870—1955: J. Vanek. The Natural Resource Content of the U. 5. Foreign Trade. 1870-1955, Tables 5.4, 5.5, 5.6. 5.7, 5.8, and 5.9, pp. 59-64. Also, 1956-1971: U. S. Department of Commerce, Indexes of U. S. Exports and imports by Economic Classes: 1919 to 1971, and 1972-1975: U. S. Department of Commerce, Statistical Abstract of the United States. 1977. 153 TABLE A2.--Va1ues of U. S. Exports, by Economic Classes: 1956-1975 (in 1967 Millions of Dollars) F033: Sizerials Total FOOdS Products Products 1956 1401 2614 4015 1378 2394 14172 21959 1957 1413 3209 4622 1222 2859 14279 22982 1958 1378 2247 3625 1142 2238 13017 20022 1959 1571 2086 3657 1214 2368 12277 19516 1960 1792 2850 4642 1281 3372 13127 22422 1961 2011 2670 4681 1298 3184 13256 22419 1962 2083 2334 4417 1566 3097 14281 23361 1963 2298 2709 5007 1700 3544 15009 25260 1964 2555 3043 5598 1872 4402 16589 28461 1965 2695 2920 5615 1674 4053 17139 28481 1966 3234 3057 6291 1563 4241 18402 30497 1967 2595 3293 5888 1596 4489 19265 31238 1968 2439 3541 5980 1659 5352 20718 33709 1969 2158 3489 5647 1754 6002 22294 35697 1970 2776 4186 6962 1823 6771 22978 38534 1971 2552 3920 6472 1842 5627 23954 37895 1972 3552 4099 7651 1946 6187 25830 41614 1973 5499 4819 10318 1943 7243 31668 51172 1974 4281 4910 9191 2003 7256 38310 56760 1975 4858 4336 9194 2103 6417 37384 55098 SOURCES: 1956-1971: U. S. Department of Commerce, Indexes of U. S. Exports and Imports by Economic Classes: 1972-1975: 1919 to 1971. Statistical Abstract of the United States, 1977. A1509 154 TABLE A3.—-Percentage Share of Value of U. 5. Exports by Economic Classes: 1870-1975 Period Resource Products rangf' aimi; :gnizhed Ending Eggs: Sizerials Total 00 S Prggucts Prgzucts $8 ggars) In Nominal Values--Year1y Averages 1880 20 39 59 22 5 15 1890 18 36 54 25 5 16 1900 18 3O 48 26 8 18 1910 11 31 42 20 13 26 1915 9 31 4O 14 15 31 1920 9 18 27 18 15 40 1925 10 28 38 14 12 36 1930 6 24 3O 10 14 45 1935 4 3O 34 9 15 43 1940 4 19 23 6 19 52 1945 2 6 8 12 9 70 1950 9 14 23 10 11 57 1955 7 13 2O 5 12 63 Year In Real Terms 1956 6.38 11.90 18.28 6.28 10.90 64.54 1957 6.15 13.96 20.11 5.31 12.44 62.13 1958 6.88 11.22 18.10 5.70 11.18 65.01 1959 8.05 10.69 18.74 6.22 12.13 62.91 1960 8.04 12.70 20.74 5.71 15.03 58.51 1961 8.97 11.91 20.88 5.79 14.20 59.13 1962 8.92 9.99 18.91 6.70 13.26 61.13 1963 9.10 10.72 19.82 6.73 14.03 59.42 1964 8.98 10.69 19.67 6.58 15.47 58.28 1965 2.46 10.25 19.71 5.88 14.23 60.17 1966 10.60 10.02 20.62 5.12 13.91 60.34 1967 8.23 10.44 18.67 5.06 14.23 61.08 1968 7.23 10.50 17.73 4.92 15.88 61.46 1969 6.05 9.77 15.82 4.91 16.81 62.45 1970 7.20 10.86 18.06 4.73 17.57 59.63 1971 6.73 10.34 17.07 4.86 14.85 63.21 1972 8.53 9.85 18.38 4.68 14.87 62.07 1973 10.74 9.41 20.15 3.79 14.16 61.88 1974 7.54 8.65 16.19 3.53 12.78 67.49 1975 8.82 7.87 16.69 3.82 11.65 67.85 SOURCES: 1870-1955: Table A1 1956-1975: Table A2 1555 .x__e:::e vmgmm—nza I- zit. 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NN. eo. eo. ooN NoN NnN .NN nnn .on omN Nmn Noe swoon; ovaco Nn .m em Ne we no om mN no no no om oe mm om oN mN mm oe .m moumm ..o oN oN NN Nm nm om eo no. No oN. n.. eo. N.. No. oo oo mo .o oN oN wozcu .mc.xm can oN oo eo mo Nm .m No oN .o oo on on no oo eo .N No em oe oo oozeu .moo.: Nen eoN No. No. no ... N.. me. No. Nn. .N. o.. oo .o. e.. o.. N.. mo. oo oo umgooueoscosca .ouuoooN oNo. oo.. NNN. n.N. Nmo. mn.. o.N. NNn. ooN. oNN. nnN. .NN. NN.. moo oeo eeo .... ooo NN.. NoN. m.e.souaz 3mm o.ooxo:u¢ NomnN oooo. moNN emnm eNne oN.e eN.e N.oe NoNn eoon ooNn onn .oo.n Noam mNoN N.on Noon ooNN ..Nn Noon m.~.guuez 3am mNo. eNo. nNo. NNo. .No. oNo. ooo. ooo. Noo. ooo. moo. eoo. noo. Noo. .oo. ooo. omo. omo. Nmo. omo. wagons. mouaoogo ouc20mmm | a u u u u "N MM u c l NRIIWLWhIId n uni”: u ”“131.” Efgnfite.nfi.luwbchn~ at.“ HungfifilWafit flEflfl‘flv‘i“-. ‘51::«h1nd "“111 I a. I HWId‘I-“vflnl '3 U. '1' .‘§*'.~na'u4dj .mgo..oo oo moo....z o.. mNo.-omo. mouoooco moeaomom o.oezmcwecoz oco m.oezm:om .m.e.cmoez 3mm w.oo3o:mgcoz .m.m.gmoez zoo m.oezmcmm .moooo moogo uuuooogo oo won. no muuooogo mugoommo oo wagons. .m .o oo m=.a>-.o< ooo<. 160 TABLE A9.--Percentage Share of U. S. Rescurce Products by Type of Product and Type of Trade: 1956-1975 (in current value) Exports of Resource Products Imports of Resource Products Year Total Renewable Nonrenewable Total Renewable Nonrenewable Resource Products Resource Products Resource Products Resource Products 1956 100.0 74.53 25.47 100.0 63.21 36.79 1957 100.0 73.32 26.68 100.0 60.07 39.93 1958 100.0 80.40 19.60 100 O 59.52 40.48 1959 100.0 84.05 15.95 100.0 59.64 40.36 1960 100.0 86.39 13.61 100.0 56.30 43.70 1961 100.0 86.92 13.08 100.0 55.68 44.32 1962 100.0 86.81 13.19 100.0 56.98 43.02 1963 100.0 84.85 15.15 100.0 58.04 41.96 1964 100.0 85.86 14.14 100.0 58.52 41.48 1965 100.0 84.99 15.01 100.0 56.69 43.31 1966 100.0 86.22 13.78 100.0 56.35 43.65 1967 100.0 83.32 16.68 100.0 56.03 43.97 1968 100.0 83.21 16.79 100.0 57.34 42.66 1969 100.0 79.30 20.70 100.0 53.49 46.51 1970 100.0 76.88 23.12 100.0 55.39 44.61 1971 100.0 80.57 19.43 100.0 52.46 47.53 1972 100.0 83.55 16.45 100.0 49.64 50.36 1973 100.0 90.09 9.91 100.0 42.56 57.44 1974 100.0 84.23 15.77 100 O 20.57 79.43 1975 100.0 80.09 19.91 100.0 20.29 79.71 SOURCE: Tables A4 and A8. 161 TABLE A10.--Value of U. S. Net Exports, by Economic Classes: 1956- 1975 (in Millions of Dollars) Y Resource Products Manuf. Semi- Finished T ggggg 1121...“, m.- Foods 133335.28 3333-16-5 °"“ 1956 —704 - 572 -1276 97 - 225 7833 6429 1957 -688 - 110 - 798 - 109 56 8296 7445 1958 —656 - 621 -1277 - 402 - 786 7050 4585 1959 -376 -1184 -1560 - 521 -1251 5366 2034 1960 - 75 - 424 - 499 - 449 79 6211 5342 1961 181 - 330 - 149 - 451 - 99 6757 6058 1962 234 - 853 - 619 - 426 - 600 6805 5160 1963 584 - 610 - 62 - 502 - 395 6991 6032 1964 506 — 631 - 125 - 132 225 7581 7549 1965 579 - 821 - 242 - 287 - 850 7137 5758 1966 1081 - 751 330 - 727 -1252 6025 4376 1967 614 - 414 200 - 922 -1103 6174 4349 1968 40 - 545 -505 -1211 —2024 4712 972 1969 - 56 - 649 -705 -1261 - 994 4378 1418 1970 169 366 535 -1598 - 397 4099 2639 1971 63 189 252 -1675 -2880 2231 -2072 1972 868 -112 756 -2003 -4102 -1256 -6605 1973 5252 31 5283 -1970 -3793 1582 1102 1974 6669 -8828 -2159 -2615 -7884 8807 -3851 1975 8163 -12684 -4521 -1751 -4506 19997 9219 SOURCES: Table A1 and Table A5. 162 TABLE A11.--Value of U. S. Net Exports, by Economic Classes: 1956- 1975 (in 1967 Millions of Dollars) Resource Products Manuf. Semi- Finished Year E333: Mixerials Total F°°d5 $33356-s gigfllc-s Teta] 1956 - 448 - 318 - 766 O - 417 10756 9573 1957 - 459 266 - 193 — 212 - 187 10601 10009 1958 - 522 - 464 - 987 - 575 - 956 8884 6367 1959 - 447 - 935 -l382 - 616 -1507 6791 5861 1960 - 143 - 5 - 148 - 542 - 146 7651 6815 1961 - 11 - 168 - 179 - 558 - 324 8007 6946 1962 - 54 - 772 - 826 - 520 - 856 8013 5811 1963 222 - 480 - 258 - 439 - 592 8291 7002 1964 531 - 474 57 - 116 155 8827 8923 1965 687 — 774 - 87 — 375 -1007 7821 6352 1966 1181 - 825 356 - 798 -1453 6449 4554 1967 614 - 414 200 - 922 -1103 6174 4349 1968 170 - 459 - 289 -1186 -1588 3872 890 1969 117 - 442 - 325 -1101 — 499 3040 1115 1970 669 268 937 -1305 174 2957 2763 1971 312 - 183 129 -1313 -1880 2236 -828 1972 1248 - 720 528 -1496 -2303 835 -2436 1973 3173 - 850 2323 -1632 -1511 5422 4602 1974 2130 - 819 1311 -1327 - 760 12308 11532 1975 2711 -2126 585 - 648 173 15574 15684 SOURCE: Table A2 and Table A6. 163 TABLE A12.--Re1ative Resource Product Requirements of U. S. Foreign Trade by Type of Products: 1956-1975 Renewable Resource Products Nonrenewable Resource Products Total Resource Products Year Exports Imports RRR* Exports Imports NRR** Exports Imports TRR*** (l) (2) (3) (4) (5) (6) (7) (8) (9) 1956 2867 3238 88.54 980 1885 52.00 3847 5123 75.09 1957 3257 3142 103.66 1185 2089 56.73 4442 5231 84.91 1958 2749 2795 98.35 670 1901 35.24 3419 4696 72.81 1959 2825 2935 96.25 536 1986 26.99 3361 4921 68.30 1960 3657 2664 137.27 576 2068 27.85 4233 4732 89.45 1961 3862 2557 151.04 581 2035 28.55 4443 4592 96.75 1962 3684 2771 132.95 560 2092 26.77 4244 4863 87.27 1963 4117 2852 144.35 735 2062 35.64 4852 4914 98.74 1964 4668 3255 143.41 769 2307 33.33 5437 5562 97.75 1965 4653 3241 143.57 822 2476 33.20 5475 5717 95.77 1966 5467 3387 161.41 874 2624 33.31 6341 6011 105.49 1967 4907 3187 153.97 981 2501 39.22 5881 5688 103.39 1968 4827 3616 133.49 974 2690 36.21 5801 6306 91.99 1969 4409 3351 131.57 1151 2914 39.50 5560 6265 88.75 1970 5566 3714 149.86 1674 2991 55.97 7240 6705 107.98 1971 5833 3666 159.11 1407 3322 42.35 7240 6988 103.61 1972 7502 4082 183.78 1477 4141 35.67 8979 8223 109.19 1973 14982 4829 310.25 1648 6518 25.28 16630 11347 146.56 1974 18160 4880 372.13 3401 18840 18.05 21561 23720 90.90 1975 18171 5521 329.12 4518 21689 20.83 22689 27210 83.38 SOURCES: Table A4 and Table A8. *RRR 8 Relative Renewable Resource product requirements of trade. **NRR Relative Nonrenewable Resource product requirements of trade. ***TRR Relative Resource Product requirements of trade. (3) g) x 100, (6) = %§%-x 100, (9) = éé; x 100 164 TABLE A13.--U. S. Exports by Trading Regions and Commody Classes: 1956-1975 (Value in Millions of Dollars and Percentages) Description of Statistics 1956-60 1961-65 1966-70 1971-75 Total U. 5. Exports Value (Millions of Dollars) 19,037.00 23,741.60 35,096.20 73,199.2C Raw Materials Exported Value (Millions of Dollars) 2,453.00 2,628.60 3,574.00 7,937.20 Percentage of total value 12.88 11.07 10.18 10.84 Percentage of total Raw Materials exported to North America 13.96 15.46 13.75 10.48 Other America 4.16 3.49 4.22 4.47 Europe 55.79 48.27 43.70 40.66 Asia 22.48 29.67 36.10 42.02 Oceania 1.47 1.42 1.05 0.59 Africa 1.43 1.65 0.88 0.87 Crude Foodstuffs Exported Value (Millions of Dollars) 1,407.40 2,261.60 2,592.00 7,482.60 Percentage of total value 7.39 9.52 7.38 10.22 Percentage of total crude foods exported to: North America 9.16 11.29 12.08 5.94 Other America 10.99 9.53 10.42 13.09 Europe 47.08 40.67 33.41 35.7? Asia 28.14 32.24 39.55 36.16 Oceania 0.05 0.14 0.19 0.16 Africa 2.57 6.11 4.29 5.07 Semi-Manufactures Exported Value (Mi1lions of Dollars) 2,865.60 3,609.60 5,322.80 9,619.60 Percentage of total value 15.05 15.20 15.17 13.14 Percentage of total semi-manufactured exported to North America 17.55 15.03 15.76 17.53 Other America 19.46 14.52 15.45 19.81 Europe 40.20 39.37 38.36 32.25 Asia 17.85 25.00 24.15 24.30 Oceania 1.81 2.76 2.48 2.78 Africa 2.77 3.20 2.68 3.25 SOURCE: United Nations, Commodity Trade Statistics according to the Standard International Trade Classification (New York, publishedTannuaTTy), 1956-1975. 165 TABLE A14.--U. S. Imports by Trading Regions and Commodity Classes: 1956-1975 (Value in Millions of Dollars and Percentages) Description of Statistics 1956-60 1961-65 1966-70 1971-75 Total U. 5. Imports Value (Millions of Dollars) 13,868.20 17,630.20 32,345.40 73,640.40 Raw Materials Imported Value (Millions of Dollars) 3,033.40 3,277.60 3,972.60 12,218.00 Percentage of total value 21.87 18.59 12.29 16.60 Percentage of total raw materials imported to North America 13.55 19.48 27.31 21.94 Other America 36.65 34.61 29.39 21.04 Europe 9.82 11.72 14.67 5.5: Asia 27.12 20.73 15.15 27.17 Oceania 3.63 4.28 3.75 1.20 Africa 6.98 7.86 9.66 23.05 Crude Foodstuffs Imported Value (Millions of Dollars) 1,907.20 1,852.00 2,222.40 3,279.60 Percentage of total value 13.75 10.50 6.87 4.45 Percentage of total crude foods imported to North America 9.56 10.11 9.66 10.05 Other America 68.21 59.10 55.42 51.25 Europe 3.02 2.67 3.45 6.16 Asia 7.21 9.52 11.01 12.26 Oceania 0.46 1.24 2.12 2.93 Africa 11.37 16.60 18.10 16.98 Semi-Manufactures Imported Value (Millions of Dollars) 3,291.00 3,953.40 6,476.80 14.252.60 Percentage of total value 23.73 22.42 20.02 19.35 Percentage of total semi-manufactured imported to North America 32.65 33.52 30.14 20.96 Other America 23.71 24.60 20.63 24.64 Europe 30.00 23.56 25.98 28.6C Asia 9.41 13.87 19.40 19.77 Oceania 1.14 0.64 1.46 1.97 Africa 2.98 3.72 2.34 3.99 SOURCE: United Nations, Conmodity Trade Statistics according to the Standard International .— Trade Classification (New York: published annually177195611975. APPENDIX B STATISTICAL APPENDIX TO CHAPTER IV 166 APPENDIX B STATISTICAL APPENDIX TO CHAPTER IV Sources of Data Statistical information in this chapter except unit price of total resource products is taken directly from (1) Indexes of U. 5. Exports and Imports by Economic Classes: 1919 to 1971; (2) the foreign section of the Statistical Abstract of the United States; (3) Annual Fisher price indexes, major classes. Sources (1) and (2) supply the price indexes between 1956 and 1975. Source (3) gives the data for the period between 1881 and 1955. In computing unit value of resource products as a whole, we have divided their nominal trade value by their real trade value. Data for Table 4.3 was derived by comparing the relative changes in resource product prices and quantities with those of all products from year to year between 1956 and 1975. Data for Table 83 (Terms of Trade for Resource Products, 1) are computed by the following formula: T = Export Price of Resource Products x 100 Import Price of Resource Products 167 168 TABLE Dl.--Trends in Unit Export Prices of Resource Products and Manufactures. And the Relation of Resource Prices to Manufactured Price: 1881-1975 (in 1967 Price) Export Unit Price Resource Product Price Indexes as % of Finished Y Finished Resource Products Manufactured Price Index ear . Manufac- tured Crude Raw Crude Raw Goods Total Foods Materials Total Foods Materials 1975 177.7 246.8 243.0 251.0 138.9 136.7 141.2 1974 149.3 234.6 242.7 227.5 157.1 162.6 152.4 1973 128.9 161.2 160.1 162.4 125.0 124.2 126.0 1972 122.0 117.4 105.2 127.9 96.2 86.2 104.8 1971 119.2 111.9 104.9 116.4 93.8 88.0 97.6 1970 115.6 104.0 99.0 107.3 89.9 85.6 92.8 1969 109.2 98.5 96.6 99.6 90.2 83.5 91.2 1968 104.3 97.0 95.7 97.9 93.0 91.8 93.8 1967 100.0 100.0 100.0 100.0 100.0 100.0 100.0 1966 96.2 100.8 98.9 102.8 104.8 102.8 106.9 1965 93.4 97.5 96.0 98.9 104.4 102.8 105.9 1964 90.1 97.1 99.4 95.2 107.8 110.3 105.7 1963 89.1 96.9 98.9 95.2 108.7 111.0 106.8 1962 89.3 96,1 96.5 95.7 107.6 108.1 107.2 1961 89.3 94.9 94.4 95.3 106.3 105.7 106.7 1960 87.4 91.2 91.8 90.8 104.3 105.0 103.9 1959 85.8 91.9 92.2 91.7 107.1 107.5 106.9 1958 84.1 94.3 92.9 95.9 112.1 110.5 113.2 1957 82.8 96.1 94.3 96.9 116.1 113.9 117.0 1956 78.0 95.8 95.1 96.2 122.8 121.9 123.3 (Period Eng:39 (Yearly Average) Years 1955 73.9 103.0 104.5 99.6 139.4 141.4 134.8 1950 66.0 95.8 112.9 84.0 145.1 171.1 127.3 1945 56.1 64.3 76.1 55.6 114.6 135.6 99.1 1940 37.6 45.1 47.6 39.9 119.9 126.6 106.1 1935 34.9 40.6 45.7 35.1 116.3 130.9 100.6 1925 57.3 82.5 86.1 75.3 144.0 150.3 131.4 1920 66.2 99.8 128.9 83.3 150.8 194.7 125.8 1915 39.2 44.8 64.3 36.8 114.3 164.0 93.9 1910 39.3 39.9 51.6 33.6 101.5 131.3 85.5 1900 36.5 31.4 44.5 24.8 86.0 121.9 67.9 1890 46.0 39.5 52.2 32.6 85.9 113.5 70.9 SOURCE: See Appendix B to the Chapter. 169 TABLE BZ.--Trends in Unit Import Prices of Resource Products and Manufactures. And the Relation of Resource Prices to Manufactured Prices: 1881-1975 (in 1967 Price) Import Unit Price Resource Product Prices Indexes as % of Finished Price Finished Resource Products Manufactured Price Index Manufac- C d R tured Crude Raw ru e aw Goods T0t31 Foods Materials Total Foods Materials 1975 212.9 316.0 169.0 364.7 148.4 79.6 171.3 1974 186.1 301.0 173.0 349.1 161.7 92.9 187.6 1973 149.5 141.9 152.7 137.5 94.9 102.1 92.0 1972 131.1 115.4 124.5 111.1 88.0 95.0 84.7 1971 121.2 110.2 116.7 106.6 90.9 96.3 87.9 1970 112.2 111.3 122.4 105.3 99.2 109.1 93.8 1969 103.7 104.9 104.9 104.9 101.2 101.2 101.2 1968 100.3 100.5 101.1 100.3 100.3 100.8 100.0 1967 100.0 100.0 100.0 100.0 100.0 100.0 100.0 1966 97.7 101.3 103.1 100.3 103.6 105.5 102.7 1965 95.2 100.3 100.0 100.4 105.3 105.0 105.5 1964 94.9 100.4 100.6 100.3 105.8 105.9 105.7 1963 95.0 93.3 83.1 100.0 98.2 87.5 105.3 1962 94.9 92.7 83.1 99.4 97.7 87.6 104.7 1961 96.8 94.5 84.9 101.3 97.6 87.7 104.6 1960 96.1 98.8 88.9 105.5 102.8 92.5 109.8 1959 94.2 97.7 90.4 102.5 103.7 96.0 108.8 1958 94.3 101.8 101.9 101.8 108.0 108.1 107.9 1957 95.9 108.6 107.9 109.1 113.3 112.5 113.8 1956 94.3 107.1 110.1 105.3 113.6 116.8 111.7 (Period Egdlngo Yearly Average Years) 1955 94.6 111.6 115.4 108.9 118.0 122.0 115.1 1950 79.6 77.6 70.9 82.4 97.5 89.1 103.5 1945 48.2 46.9 31.9 61.1 97.3 66.2 126.8 1940 34.0 33.2 20.4 44.1 97.6 60.0 129.7 1935 33.4 26.4 20.4 31.3 79.0 61.1 93.7 1930 53.8 61.0 39.6 74.8 113.4 73.6 139.0 1925 58.7 60.1 33.3 79.1 102.4 56.7 134.7 1920 65.2 69.2 34.9 98.5 106.1 53.5 151.1 1915 35.9 46.1 26.1 64.2 128.4 72.7 178.8 1910 34.4 40.0 19.8 62.0 116.3 57.6 180.2 1900 31.8 37.3 26.6 50.2 117.3 83.6 157.9 1890 35.8 40.9 28.5 59.4 114.2 79.6 165.9 SOURCES: See Appendix B to the Chapter. 170 TABLE 83.--Terms of Trade for Resource Products, Crude Foods, and for Raw Materials: 1881-1975 (Terms of Trade 1967 = 100) U. S. Terms of Trade Year Resource Product Crude Foods Raw Materials 1975 78.09 143.28 68.82 1974 77.93 140.29 65.17 1973 113.56 104.85 118.11 1972 101.67 84.50 115.12 1971 101.54 89.89 109.19 1970 93.44 80.88 101.90 1969 93.85 92.09 94.95 1968 96.44 94.66 97.61 1967 100.00 100.00 100.00 1966 99.54 95.93 102.49 1965 95.17 96.00 98.51 1964 96.75 98.91 94.91 1963 103.83 119.01 95.20 1962 103.59 116.13 96.28 1961 100.46 111.19 94.08 1960 92.29 103.26 86.07 1959 94.11 101.99 89.46 1958 92.61 ‘ 91.17 93.52 1957 88.47 87.40 88.82 1956 89.43 86.38 91.36 (Period Ending Yearly Average 5 -10 Years) 1955 92.29 90.55 91.46 1950 123.45 159.24 101.94 1945 137.10 238.56 91.00 1940 135.84 233.33 90.48 1935 153.79 224.02 112.14 1930 108.69 204.80 75.94 1925 137.27 258.56 95.20 1920 144.22 374.71 84.57 1915 97.18 246.36 57.32 1910 99.75 260.61 54.19 1900 84.18 167.29 49.40 1890 96.58 183.16 54.88 SOURCES: See Appendix B to the Chapter. APPENDIX C STATISTICAL DATA T0 CHAPTER V 171 APPENDIX C STATISTICAL DATA T0 CHAPTER V Notes on Tables 5.1 and 5.2 In line with our theoretical framework presented in Chapter II (equations 19), the direct and indirect values of resource product requirements of American domestic exports and competitive imports in Tables 5.1 and 5.2 were obtained in the following way: Let M be the 309 direct and indirect requirement matrix for 309 detailed U. S. commodity industries which ranged from dairy farm products industry to miscellaneous manufactured industry. M is actually constructed by taking the first 309 rows and 309 columns from the 367 by 367 input-output Table T prepared by the U. 5. Depart- ment of Commerce. 1 shows direct and indirect requirements for all 367 detailed commodity and service industries. Of the 309 commodity industries contained in M, 19 were resource products ones. They can be identified either by a code number or by industry name: 1.01 Dairy farm products 1.02 Poultry and eggs 1.03 Meat animals and miscellaneous livestock products .01 Cotton .02 Food feed grains and grass seeds .03 Tobacco NNNN .04 Fruits and tree nuts 172 OOCDNO‘O‘UWCDNNN d 20. .05 .06 .07 .00 .00 .01 .02 .00 .OO .00 .OO 01 173 Vegetables, sugar, and miscellaneous crops Oil bearing crops Forest, greenhouse, and nursery products Forestry and fishery products Iron and fenoalloy ores mining Copper ore mining Nonferrous metal ores mining, except copper Coal minning Crude petroleum and natural gas Stone and clay mining and quarrying Chemical and fertilizer mineral mining Logging camps and logging contractors From Matrix M, we form the 19 by 309 resource product requirement matrix N. The 19 rows in N consist only those 19 resource product industry rows in M. Thus we have: 1,1 N19 1, ................ N19 309 174 Each column in N shows the amount of resource products required both directly and indirectly from each of the 19 resource product industries named at the beginning of the rows for a dollar of deliveries to final demand by the industry named at the head of the column. Thus, N is nothing but the 2 by 3 matrix shown in (19) of Chapter II, except that it has been extended to 19 by 309 matrix. Our next task is to estimate the annual values of exports and competitive imports for each of the 309 industries, which shall result in 22 export and import vectors, Xt and);t with t = 1965-1975. + -> t Xt (M ) consists of 309 columns showing the actual value of exports (imports) of the 309 industries. As an illustration, Table C3 pre- sents the two foreign trade vectors for 1967. And as our basic source of data for this computational effort, we used the U. S. exports and imports of commodities based on the Standard Industrial Classification (SIC) series prepared by the Department of Commerce. The main reason for using this foreign trade series is that the industry classification of the input-output table was also based on the same standard (SIC). Note that in computing the export and import vectors for 1928 and 1937, Professor Vanek had to rely on the detailed trade return presented in the pre-world War II volumes of 1 the Statistical Abstract of the United States. This source of data, we found, did not classify commodities in terms of the SIC. Thus 10. Vanek, The Natural Resources Content of U. S. Foreign Trade, 1870-1955, p. 83. 175 we may claim that our estimation of foreign trade vectors are some- what superior to those estimated by Professor Vanek. The gross output of particular resource product Ri (i = 1, 2 . . ., 19) required for a given set of exports or imports will -> -> then be obtained as the inner product of ith row of N and Xt or Mt i.e., x _ . t M _ t where i = 1, . . ., 19 j = 1, . . ., 309 1965 - 1975 (I.- II The results of this computation are presented in Tables 5.1 and 5.2 and the net trades are shown in Table 5.9. Notes on Tables 5.3 and 5.4 To compute statistics for Table 5.3 and 5.4, we used the same resource product requirement matrix N and the same foreign trade vectors 1: and M and same method of calculation that used above, except that the vectors and matrix are being subdivided into four parts according to four major economic classes: resource products, manufactured foods, semi-manufactures and finished manu- factures. 176 TABLE C1.--Gross Resource Product Requirements Per Dollar of Final Output of 309 Commodity Industries (in Dollars): U. S. Economy for 1967 Number Industry Renewable Nonrenewable 1 Dairy Farm Products 1.429 0.026 2 Poultry and egge 1.463 0.034 3 Meat animals 1.895 0.030 4 Cotton 1.103 0.046 5 Food feed grains and grass seeds 1.179 0.053 6 Tobacco 1.032 0.028 7 Fruits and tree nuts 1.079 0.024 8 Vegetables, sugar and other craps 1.106 0.024 9 Oil bearing crops 1.155 0.023 10 Forest, greenhouse, nursery products 1.133 0.023 11 Forestry and fishery products 1.187 0.017 12 Iron and Ferroalloy ores mining 0.006 1.102 13 COpper ore mining 0.009 1.243 14 Nonferrous metal ore mining 0.006 1.134 15 Coal mining 0.017 1.166 16 Crude petroleum and natural gas 0.005 1.037 17 Stone, clay mining and quarying 0.005 1.069 18 Chemical and fertilizer mineral 0.006 1.096 19 Logging 1.555 0.022 20 Complete guided missiles 0.006 0.010 21 Ammunition, except small arms 0.009 0.039 22 Tanks and tank components 0.009 0.039 23 Sighting and fire control equipment 0.010 0.015 24 Small arms 0.012 0.016 25 Small arms ammunition 0.012 0.058 177 TABLE Cl.--Continued Number Industry Renewable Nonrenewable 26 Other ordinance and accessories 0.009 0.026 27 Meat products 1.312 0.028 28 Creamery butter 0.996 0.027 29 Cheese, natural and processed -0.698 0.023 30 Condensed and evaportated milk 0.646 0.025 31 Ice cream and frozen desserts 0.470 0.020 32 Fluid milk 0.811 0.023 33 Canned and cured sea foods 0.421 0.018 34 Canned specialties 0.227 0.024 35 Canned fruits and vegetables 0.224 0.024 36 Dehydrated food products 0.371 0.018 37 Pickles, sauces and salad dressing 0.247 0.022 38 Fresh or frozen packaged fish 0.563 0.016 39 Frozen fruits and vegetables 0.301 0.019 40 Flour and cereal preparation 0.427 0.027 41 Prepared feeds for animals and fowls 0.491 0.032 42 Rice milling 0.825 0.041 43 Wet corn milling 0.437 0.038 44 Bakery products 0.132 0.016 45 Sugar 0.207 0.016 46 Confectionery and related Products 0.108 0.015 47 Alcoholic beverages 0.064 0.015 48 Bottled and canned soft drinks 0.049 0.019 49 Flavoring extracts and surups 0.097 0.014 50 Cottonseed oil mills 0.780 0.036 51 Soybean oil mills 0.879 0.025 52 Vegetable oil mills, n.e.c. 0.291 0.013 53 Animal and marine fats and oils 0.458 0.023 178 TABLE Cl.--Continued Number Industry Renewable Nonrenewable 54 Roasted coffee 0.011 0.010 55 Shortening and cooking oils 0.468 0.027 56 Manufactured ice 0.011 0.025 57 Macaroni and spaghetti 0.149 0.018 58 Food preparations, n.e.c. 0.193 0.017 59 Cigarettes, cigars 0.177 0.010 60 Tobacco steannfing and redrying 0.785 0.023 61 Broadwoven fabric mills 0.168 0.025 62 Narrow fabric mills 0.043 0.023 63 Yarn mills and finishing of textiles 0.179 0.027 64 Thread mills 0.135 0.026 65 Floor coverings 0.110 0.024 66 Felt goods, n.e.c. 0.079 0.018 67 Lace goods 0.026 0.020 68 Padding and upholstery fillings 0.029 0.016 69 Processed textile waste 0.028 0.014 70 Coated fabrics, not rubberized 0.036 0.028 71 Tire cord and fabric 0.045 0.038 72 Scouring and combing plants 0.635 0.018 73 Cordage and twine 0.060 0.015 74 Textile goods, n.e.c. 0.019 0.011 75 Hostery 0.043 0.017 76 Knit apparel mills 0.068 0.017 77 Knit fabric mills 0.072 0.028 78 Apparel made from purchased materials 0.070 0.013 79 Curtains and draperies 0.076 0.017 80 House furnishings, n.e.c. 0.112 0.021 81 Fabricated textile products, n.e.c. 0.054 0.016 179 TABLE Cl.--Continued Number Industry Renewable Nonrenewable 82 Sawmills and planning mills, general 0,485 0.018 83 Hardwood dimensions and flooring 0.256 0.016 84 Special product sawmills, n.e.c. 0.369 0.011 85 Millwork 0.149 0.015 86 Veneer and plywood 0.379 0.015 87 Prefabricated wood structure 0.135 0.019 88 Wood preserving 0.423 0.030 89 Wood products, n.e.c. 0.134 0.017 90 Wooden containers 0.194 0.014 91 Wood household furniture 0.088 0.015 92 Upholstered household furniture 0.063 0.015 93 Industrial inorganic and organic chemicals 0.008 0.136 94 Agricultural chemicals, n.e.c. 0.013 0.081 95 Miscellaneous chemical products 0.049 0.059 96 Plastics materials and resins 0.015 0.077 97 Synthetic rubber 0.012 0.087 98 Celluloric man-made fibers 0.036 0.052 99 Organic fibers, noncellulasic 0.017 0.043 100 Ferlilizer 0.015 0.181 101 Glass and glass products except containers 0.011 0.029 102 Glass container 0.014 0.048 103 Cement, hydraulic 0.006 0.158 104 Brick and structural clay tile 0.007 0.083 105 Ceramic wall and floor tile 0.008 0.088 106 Clay refactories 0.010 0.213 107 Structural clay products 0.008 0.116 108 Vitreous plumbing fixtures 0.008 0.049 180 TABLE C1.--Continued Number Industry Renewable Nonrenewable 109 Food utensils, pottery 0.008 0.055 110 Porcelain electrical supplies 0.005 0.050 111 Pottery products, n.e.c. 0.008 0.092 112 Concrete block and brick 0.006 0.139 113 Concrete products, n.e.c. 0.006 0.072 114 Ready-mixed concrete 0.005 0.179 115 Lime 0.009 0.151 116 Gypsum products 0.029 0.119 117 Cut stone and stone products 0.009 0.154 118 Abrasive products 0.021 0.035 119 Asbestos products 0.013 0.115 120 Gaskets and insulations 0.021 0.063 121 Minerals, ground or treated 0.009 0.357 122 Mineral wool 0.013 0.042 123 Nonclay refractories 0.008 0.133 124 Nonmetallic mineral products 0.014 0.060 125 Blast furnaces and basic steel products 0.005 0.148 126 Iron and steel founderies 0.006 0.036 127 Iron and steel forgings 0.004 0.075 128 Primary metal product 0.004 0.058 129 Primary copper 0.005 0.393 130 Primary lead 0.005 0.296 131 Primary zinc 0.004 0.318 132 Primary aluminum ' 0.005 0.128 133 Primary nonferrous metal 0.002 0.095 134 Secondary nonferrous metal 0.005 0.041 135 C0pper rolling and drawing 0.005 0.156 136 Aluminum rolling and drawing 0.006 0.077 137 Nonferrous rolling and drawing, n.e.c. 0.005 0.062 181 TABLE C1.--Continued Number Industry Renewable Nonrenewable 138 Nonferrous wire drawing and insulating 0.008 0.091 139 Aluminum castings 0.005 0.054 140 Brass, bronze, copper castings 0.005 0.092 141 Nonferrous castings, n.e.c. 0.004 0.066 142 Nonferrous forgings 0.006 0.057 143 Metal cans 0.012 0.067 144 Metal barrels, drums, pails 0.013 0.067 145 Metal sanitary ware 0.012 0.034 146 Plumbing fittings and brass 0.009 0.060 147 Heating equipment, except electric 0.009 0.033 148 Fabricated structural steel 0.007 0.061 149 Metal doors sash and trim 0.010 0.043 150 Fabricated plate work 0.006 0.052 151 Sheet metal work 0.009 0.055 152 Metal household furniture 0.018 0.036 153 Mattresses and bedsprings 0.043 0.023 154 Wood office furniture 0.071 0.018 155 Metal office furniture 0.012 0.031 156 Public building furniture 0.037 0.023 157 Wood partions and fixtures 0.053 0.017 158 Metal partions and fixtures 0.014 0.039 159 Venetian blinds and shades 0.025 0.031 160 Furniture and fixtures, n.e.c. 0.042 0.025 161 Pulp mills 0.198 0.033 162 Paper mills, except building paper 0.137 0.040 163 Paper board mills 0.209 0.041 164 Envelopes 0.051 0.020 165 Sanitary paper products 0.066 0.022 182 TABLE C1.--Continued Number Industry Renewable Nonrenewable 166 Wallpaper, building paper 0.170 0.057 167 Converted paper and products 0.055 0.026 168 Paperboard containers and boxes 0.085 0.027 169 Newspaper 0.031 0.013 170 Periodicals 0.027 0.014 171 Book printing and publishing 0.025 0.013 172 Miscellaneous publishing 0.016 0.010 173 Commercial printing 0.031 0.020 174 Manifold business firms, binders 0.036 0.016 175 Greeting card publishing 0.019 0.011 176 Miscellaneous printing services 0.013 0.016 177 Drugs 0.015 0.018 178 Cleaning preparations 0.035 0.047 179 Toilet preparations 0.020 0.025 180 Paints and allied products 0.045 0.062 181 Petroleum refining and related product 0.005 0.508 182 Paving mixtures and blocks 0.007 0.233 183 Asphalt felts and coatings 0.029 0.121 184 Tires and inner tubes 0.012 0.030 185 Rubber footwear 0.027 0.018 186 Reclaimed rubber 0.017 0.016 187 Miscellaneous plastics products 0.015 0.032 188 Leather tanning and industrial leather products 0.007 0.016 189 Footwear cut stock 0.049 0.017 190 Footwear except rubber 0.015 0.012 191 Other leather products 0.020 0.015 192 Architectural metal work 0.008 0.056 193 Miscellaneous metal work 0.007 0.070 194 Screw machine product, bolts, nuts, washers 0.005 0.043 183 TABLE C1.--Continued Number Industry Renewable Nonrenewable 195 Metal stampings 0.007 0.053 196 Cutlery 0.009 0.018 197 Hand and edge tools including saws 0.009 0.028 198 Hardware, n.e.c. 0.007 0.038 199 Coating, engraving and allied services 0.008 0.034 200 Miscellaneous fabricated wire products 0.008 0.079 201 Safes and vaults 0.007 0.029 202 Steel springs 0.005 0.054 203 Pipe, valves and pipe fittings 0.005 0.043 204 Collapsible tubes 0.006 0.049 205 Metal foil and leaf 0.018 0.037 206 Fabricated metal products 0.007 0.050 207 Steam engines and turbines 0.006 0.030 208 Internal combustion engines, n.e.c. 0.006 0.025 209 Farm machinery 0.006 0.029 210 Construction machinery 0.006 0.029 211 Mining machinery 0.007 0.033 212 Oil field machinery 0.005 0.029 213 Elevators moving stairways 0.006 0.030 214 Conveyors and conveying equipment 0.006 0.031 215 Florists, cranes and monorails 0.005 0.032 216 Industrial trunks and tractors 0.007 0.028 217 Machine tools, metal cutting types 0.005 0.018 218 Machine tools, metal forming types 0.006 0.027 219 Special dies and tools and machine tool accessories 0.006 0.025 220 Metal working machinery, n.e.c. 0.007 0.024 184 TABLE C1.--Continued Number Industry Renewable Nonrenewable 221 Food products machinery 0.011 0.023 222 Textile machinery 0.015 0.024 223 Woodworking machinery 0.007 0.021 224 Paper industries machinery 0.007 0.029 225 Printing trades machinery 0.007 0.021 226 Special industry machinery 0.007 0.027 227 Pumps and compressors 0.007 0.025 228 Ball and roller bearings 0.006 0.035 229 Blowers and forms 0.007 0.029 230 Industrial patterns 0.028 0.016 231 Power transmission equipment 0.006 0.029 232 Industrial furnaces and ovens 0.006 0.038 233 General industrial machinery 0.008 0.028 234 Machine shop products 0.006 0.028 235 Computing and related machines 0.010 0.014 236 Typewriters 0.007 0.013 237 Scales and balances 0.008 0.023 238 Office machine, n.e.c. 0.009 0.018 239 Automatic merchandising 0.011 0.027 240 Commercial laundry equipment 0.010 0.028 241 Refrigeration machinery 0.009 0.032 242 Measuring and dispensing pumps 0.008 0.025 243 Service industry machines 0.008 0.030 244 Electric measuring instruments 0.007 0.012 245 Transformers 0.010 0.042 246 Switchgear and switchboard apparatus 0.007 0.023 247 Motors and generators 0.008 0.030 248 Industrial controls 0.007 0.018 249 Welding apparatus 0.006 0.043 250 Carbon and graphite products 0.007 0.054 185 TABLE Cl.--Continued Number Industry Renewable Nonrenewable 251 Electrical industrial apparatus, n.e.c. 0.014 0.024 252 Household cooking equipments 0.010 0.034 253 Household refrigerators 0.011 0.030 254 Household laundry equipment 0.010 0.036 255 Electric housewares 0.013 0.029 256 'Household vacuum cleaners 0.008 0.023 257 Sewing machines 0.008 0.017 258 Household appliances, n.e.c. 0.011 0.037 259 Electric lamps 0.007 0.015 260 Lighting fixtures 0.010 0.031 261 Wiring devices 0.007 0.037 262 Radio and television receiving sets 0.013 0.013 263 Phonograph records 0.012 0.018 264 Telephone and telegraph 0.005 0.016 265 Radio and television communi- cations 0.006 0.012 266 Electron tubes 0.007 0.016 267 Semiconductors 0.008 0.017 268 Electronic components 0.009 0.020 269 Storage batteries 0.008 0.088 270 Primary batteries 0.006 0.048 271 X-ray apparatus and tubes 0.006 0.012 272 Engine electrical equipment 0.006 0.027 273 Electrical equipment, n.e.c. 0.008 0.028 274 Truck and bus bodies 0.010 0.032 275 Truck trailers 0.019 0.034 276 Motor vehicles and parts 0.007 0.027 277 Aircraft 0.006 0.015 278 Aircraft engines and parts 0.007 0.022 186 TABLE Cl.--Continued Number Industry Renewable Nonrenewable 279 Aircraft propellers and parts 0.011 0.025 280 Aircraft equipment, n.e.c. 0.006 0.017 281 Shipbuilding and repairing 0.007 0.028 282 Boatbuilding and repairing 0.024 0.022 283 Locomotives and parts 0.005 0.026 284 Railroad and street cars 0.010 0.050 285 Motorcycles, bikes, parts 0.006 0.021 286 Trailer coaches 0.007 0.027 287 Transportation equipment, n.e.c. 0.010 0.036 288 Engineering scientific instrument 0.009 0.019 289 Mechanical measuring devices 0.010 0.021 290 Automatic temperature control 0.008 0.022 291 Surgical and medical instruments 0.011 0.026 292 Surgical appliances and supplies 0.030 0.015 293 Dental equipment and supplies 0.008 0.026 294 Watches, clocks and parts 0.007 0.016 295 Optical instruments and lenses 0.007 0.013 296 Opththalmic goods 0.009 0.014 297 Photographic equipments and supplies . 0.007 0.018 298 Jewelry 0.006 0.020 299 Musical instruments and parts 0.042 0.018 300 Games, toys, etc. 0.025 0.021 301 Sporting and athletic goods 0.021 0.022 302 Pens, pencils, etc. 0.023 0.025 303 Artificial flower 0.027 0.018 304 Buttons, needles, pins 0.012 0.028 305 Brooms and brushes 0.060 0.022 306 Hard surface floor covering 0.031 0.033 307 Mortician goods 0.044 0.024 187 TABLE C1.--Continued Number Industry Renewable Nonrenewable 308 Signs and advertising displays 0.019 0.025 309 Miscellaneous manufactures 0.029 0.026 SOURCE: U. S. Department of Commerce, Input-Output Structure of U. S. Economy: 1967. For detailed calculation, see the text and the Appendix to this chapter. 188 TABLE C2.--Gross Resource Product Re uirements per Dollar of Final Output of 192 Industries Vin dollars): U. S. Economy for 1947 Number Industry Renewable Nonrenewable 1 Meat animals and products 1.663 0.021 2 Poultry and eggs 1.718 0.028 3 Farm dairy products 1.470 0.023 4 Food grains and feed crops 1.134 0.033 5 Cotton 1.298 0.029 6 Tobacco 1.031 0.019 7 Oil-bearing crops 1.168 0.028 8 Vegetables and fruits 1.077 0.021 9 All other agricultural products 1.079 0.025 10 Fisheries, hunting, and trapping 1.032 0.014 11 Iron ore mining 0.013 1.025 12 Copper mining 0.012 1.029 13 Lead and zinc mining 0.015 0.029 14 Bauxite mining 0.005 0.023 15 Other metal mining 0.020 1.035 16 Coal mining 0.017 1.020 17 Crude petroleum and natural gas 0.001 1.018 18 Stone, sand, clay, and abrasives 0.004 1.051 19 Sulphur 0.001 1.012 20 Other nonmetallic minerals 0.004 1.061 21 Meat packing and wholesale poultry 1.336 0.021 22 Processed dairy products 0.906 0.026 23 Canning, preserving, and freezing 0.431 0.027 24 Grain mill products 0.611 0.027 25 Bakery products 0.285 0.021 26 Miscellaneous food products 0.316 0.022 27 Sugar 0.402 0.039 28 Alcoholic beverages 0.198 0.023 189 TABLE C2.--Continued Renewable Nonrenewable Number Industry (P) (N) 29 Tobacco manufactures 0.491 0.017 30 Spinning, weaving, and dyeing 0.404 0.023 31 Special textile products 0.248 0.014 32 Jute, linen, cordage, and twine 0.152 0.011 33 Canvas products 0.182 0.016 34 Apparel 0.163 0.012 35 House furnishing and other non- apparel 0.237 0.021 36 Logging 1.019 0.029 37 Sawmills, planing and veneer mills 0.189 0.025 38 Plywood 0.208 0.019 39 Fabricated wood products 0.073 0.018 40 Wood containers and cooperage 0.103 0.021 41 Wood furniture 0.078 0.021 42 Metal furniture 0.065 0.034 43 Partitions, screens, shades, etc. 0.055 0.033 44 Pulp mills 0.305 0.051 45 Paper and board mills 0.125 0.052 46 Converted paper products 0.063 0.037 47 Printing and publishing 0.026 0.015 48 Industrial inorganic chemicals 0.017 0.180 49 Industrial organic chemicals 0.067 0.102 50 Plastic materials 0.090 0.062 51 Synthetic rubber 0.039 0.117 52 Synthetic fiber 0.054 0.050 53 Explosives and fireworks 0.049 0.050 54 Drugs and medicines 0.062 0.026 55 Soap and related products 0.288 0.039 56 Soap and related products 0.288 0.039 190 TABLE C2.--Continued Renewable Nonrenewable Number Industry (P) (N) 57 Gum and wood chemicals 0.388 0.029 58 Fertilizers 0.030 0.176 59 Vegetable oils 0.797 0.029 60 Animal oils 0.746 0.035 61 Miscellaneous chemical industries 0.118 0.083 62 Petroleum products 0.005 0.598 63 Coke and products 0.011 0.508 64 Paving and roofing materials 0.037 0.149 65 Tires and inner tubes 0.104 0.062 66 Miscellaneous rubber products 0.055 0.043 67 Leather tanning and finishing 0.027 0.013 68 Other leather products 0.041 0.012 69 Footwear (excluding rubber) 0.030 0.012 70 Glass 0.011 0.050 71 Cement 0.007 0.152 72 Structural clay products 0.003 0.171 73 Pottery and related products 0.009 0.062 74 Concrete and plaster products 0.014 0.128 75 Abrasive products 0.049 0.075 76 Asbestos products 0.019 0.130 77 Other nonmetallic minerals 0.006 0.211 78 Blast furnaces 0.009 0.440 79 Steel works and rolling mills 0.006 0.175 80 Iron foundries 0.005 0.065 81 Steel foundries 0.006 0.099 82 Primary copper 0.010 0.700 83 Capper rolling and drawing 0.007 0.366 84 Primary lead 0.014 0.805 85 Primary zinc 0.007 0.412 86 Other primary metals 0.013 0.671 191 TABLE C2.--Continued Renewable Nonrenewable Number Industry (p) (N) 87 Nonferrous metal rolling 0.007 0.271 88 Primary aluminum 0.006 0.124 89 Aluminum rolling and drawing 0.005 0.083 90 Secondary nonferrous metals 0.003 0.126 91 Nonferrous foundries 0.004 0.079 92 Iron and steel foundries 0.004 0.103 93 Tin cans and other tin ware 0.013 0.100 94 Cutlery 0.010 0.030 95 Tools and general hardware 0.007 0.039 96 Other hardware 0.006 0.047 97 Metal plumbing and vitreous fixtures 0.009 0.071 98 Heating equipment 0.007 0.047 99 Structural metal products 0.005 0.058 100 Boiler shop products and pipe bending 0.005 0.061 101 Metal stampings 0.008 0.059 102 Metal coating and engraving 0.005 0.066 103 Lighting fixtures 0.010 0.042 104 Fabricated wire products 0.007 0.116 105 Metal barrels, drums, etc. 0.007 0.080 106 Tubes and foils 0.009 0.063 107 Miscellaneous fabricated metal products 0.005 0.054 108 Steel springs '0.007 0.074 109 Nuts, bolts, screw machine products 0.005 0.065 110 Steam engines and turbines 0.004 0.046 111 Internal combustion engines 0.005 0.043 112 Farm and industrial tractors 0.008 0.047 113 Farm equipment 0.010 0.050 192 TABLE 02.-—Continued Renewable Nonrenewable Number Industry (P) (N) 114 Construction and mining machinery 0.005 0.038 115 Oil-field machinery and tools 0.005 0.045 116 Machine tools and metalworking machinery 0.004 0.030 117 Cutting tools, jigs, and fixtures 0.004 0.025 118 Special industrial machinery 0.009 0.035 119 Pumps and compressors 0.005 0.039 120 Elevators and conveyors 0.005 0.039 121 Blowers and fans 0.005 0.036 122 Power transmission equipment 0.005 0.038 123 Other industrial machinery 0.007 0.044 124 Other commercial machinery and equipment 0.007 0.024 125 Refrigeration equipment 0.009 0.045 126 Valves and fittings 0.004 0.052 127 Ball and roller bearings 0.003 0.035 128 Machine shops 0.003 0.035 129 Wiring devices and graphite products 0.011 0.060 130 Electrical measuring instruments 0.007 0.033 131 Motors and generators 0.007 0.049 132 Transformers 0.016 0.069 133 Electrical control apparatus 0.008 0.040 134 Electrical welding apparatus 0.018 0.049 135 Electrical appliances 0.010 0.041 136 Industrial wire and cable 0.017 0.176 137 Engine electrical equipment 0.008 0.062 138 Electrical lamps 0.007 0.032 139 Radio and related products 0.015 0.030 140 Tubes 0.005 0.044 193 TABLE C2.--Continued Renewable Nonrenewable Number Industry (P) (N) 141 Communication equipment 0.009 0.036 142 Storage batteries 0.029 0.129 143 Primary batteries 0.007 0.087 144 X-ray apparatus 0.006 0.021 145 Motor vehicles 0.021 0.054 146 Truck trailers 0.031 0.040 147 Automobile trailers 0.028 0.036 148 Aircraft and parts 0.006 0.026 149 Ships and boats 0.012 0.027 150 Locomotives 0.007 0.046 151 Railroad equipment 0.010 0.054 152 Motorcycles and bicycles 0.011 0.034 153 Instruments, etc. 0.008 0.030 154 Optical, ophthalmic, and photo equipment 0.014 0.030 155 Medical and dental instruments and supplies 0.096 0.028 156 Watches and clocks 0.007 0.030 157 Jewelry and silverware 0.007 0.116 158 Musical instruments and parts 0.021 0.018 159 Toys and sporting goods 0.027 0.027 160 Office supplies 0.027 0.018 161 Plastic products 0.055 0.024 162 Cork products 0.009 0.023 163 Motion picture products 0.005 0.010 164 Miscellaneous manufactured products 0.054 0.027 165 Excluded 166 Excluded 167 Electric light and power 0.003 0.118 168 Natural, manufactured, and mixed gas 0.001 0.198 194 TABLE C2.-—Continued Renewable Nonrenewable Number Industry (P) (N) 169 Railroads 0.006 0.066 170 Trucking 0.007 0.036 171 Warehousing and storage 0.026 0.013 172 Ocean shipping 0.007 0.034 173 Other water transportation 0.006 0.084 174 Air transportation 0.007 0.044 175 Pipeline transportation 0.001 0.027 176 Wholesale trade 0.007 0.009 177 Retail trade 0.005 0.013 178 Local and highway transportation 0.003 0.031 179 Telephone and telegraph 0.005 0.003 180 Eating and drinking places 0.261 0.017 181 Banking, finance, and insurance 0.003 0.004 182 Hotels 0.009 0.012 183 Real estate and rentals 0.006 0.052 184 Laundries and dry-cleaning 0.015 0.019 185 Other personal services 0.010 0.022 186 Advertising, including radio and television 0.019 0.013 187 Business services 0.004 0.007 188 Automobile repair services and garages 0.010 0.031 189 Other repair services 0.006 0.023 190 Motion pictures and other amusements 0.003 0.013 191 Medical, dental, and other profes- sional services 0.047 0.010 192 Nonprofit institutions 0.010 0.013 SOURCE: J. Vanek, The Natural Resources Content of U. 5. Foreign Trade, 1870-1955, pp. 85—88. 195 TABLE C3.--Exports and Competitive Imports of Selected Industry Classes, 1967 (in Millions of Dollars) Number Industry Egggitlc cngggiilve 1 Dairy Farm Products --- --- 2 Poultry and eggs 7.46 9.93 3 Meat animals 82.57 308.44 4 Cotton 465‘28 27.81 5 Food feed grains and grass seeds 2319.27 56.96 6 Tobacco 486.92 161.76 7 Fruits and tree nuts 181.80 177.00 8 Vegetables, sugar and other crops 87.18 101.01 9 Oil bearing crops 742.02 6.11 10 Forest, greenhouse, nursery products 22.49 90.07 11 Forestry and fishery products 31.53 667.24 12 Iron and ferroalloy ores mining 128.01 537.29 13 Copper ore mining 22.89 27.76 14 Nonferrous metal ore mining 10.58 136.55 15 Coal mining 482.47 1.99 16 Crude petroleum and natural gas 117.51 1207.99 17 Stone, clay mining and quarrying 106.13 176.40 18 Chemical and fertilizer mineral 182.35 160.89 19 Logging 203.91 30.89 20 Complete guided missiles 33.97 --- 21 Amunition, except small arms 93.63 --- 22 Tanks and tank components 147.17 0.47 23 Sighting and fire control equipment --- --- 24 Small arms 27.94 39.96 25 Small arms ammunition 26.49 34.49 26 Other ordinance and accessories 24.36 --- 27 Meat products 310.46 721.87 28 Creamery butter 2.05 0.44 29 Cheese, natural and processed 4.07 64.83 196 TABLE C3.--Continued Number Industry Taggitlc Comgggifilve 30 Condensed and evaporated milk 107.47 26.13 31 Ice cream and frozen desserts --- --- 32 Fluid milk 2.66 2.81 33 Canned and cured sea foods 37.33 102.32 34 Canned Specialties 7.27 2.66 35 Canned fruits and vegetables 100.91 146.56 36 Dehydrated food products 60.33 9.54 37 Pickles, sauces and salad dressings 10.38 3.05 38 Fresh or frozen packaged fish 25.79 --- 39 Frozen fruits and vegetables 23.37 --- 40 Flour and cereal preparation 155.17 8.07 41 Prepared feeds for animals and fowls 47.34 14.61 42 Rice milling 317.66 0.10 43 Wet corn milling 35.67 14.40 44 Bakery products 6.63 19.72 45 Sugar 7.73 631.48 46 Confectionary and related products 20.71 69.34 47 Alcoholic beverages 21.02 533.36 48 Bottled and canned soft drinks 1.37 0.41 49 Flavoring extracts and syrups 36.66 7.61 50 Cottonseed oil mills 12.03 11.67 51 Soybean oil mills 320.07 --- ‘ 52 Vegetable oil mills, n.e.c. 23.51 103.78 53 Animal and marine fats and oils 166.72 78.72 54 Roasted coffee 18.32 31.61 55 Shortening and cooking oils 83.16 --- 56 Manufactured ice --- --- 57 Macaroni and spaghetti 0.35 2.97 58 Food preparations, n.e.c. 56.60 59.91 TABLE C3.--Continued 197 Number Industry giggitlc co?figgiilve 59 Cigarettes, cigars 137.04 7.73 60 Tobacco stemming and redrying --- --- 61 Broadwoven fabric mills 225.03 320.90 62 Narrow fabric mills 16.99 11.56 63 Yarn mills and finishing of textiles 8.22 50.03 64 Thread mills 5.38 1.88 65 Floor coverings 19.60 46.45 66 Felt goods, n.e.c. 4.04 1.44 67 Lace goods 6.39 11.43 68 Padding and upholstery fillings 1.50 --- 69 Processed textile waste --- 11.69 70 Coated fabrics, not rubberized 20.70 3.25 71 Tire cord and fabric 19.52 1.08 72 Scoring and combing plants 5.70 55.18 73 Cordage and twine 5.64 42.23 74 Textile goods, n.e.c. 13.57 224.26 75 Hostery 7.17 3.68 76 Knit apparel mills -—- --- 77 Knit fabric mills 21.74 13.59 78 Apparel made from purchased materials 133.51 634.71 79 Curtains and draperies 3.25 --- 80 House furnishings, n.e.c. 24.88 45.97 81 Fabricated textile products, n.e.c. 50.18 10.08 82 Sawmills and planning mills, general 141.66 395.80 83 Hardwood dimensions and flooring 6.17 10.33 84 Special product sawmills, n.e.c. 13.19 26.35 85 Millwork 5.68 11.07 198 TABLE C3.--Continued Number Industry giggitlc cngggitlve 86 Veneer and plywood 19.04 185.47 87 Prefabricated wood structure 1.37 --- 88 Wood preserving --- --- 89 Wood products, n.e.c. 24.15 87.98 90 Wooden containers 3.29 2.25 91 Wood household furniture 11.18 --- 92 Upholstered household furniture 3.62 --- 93 Industrial inorganic and organic chemicals 1127.95 430.27 94 Agricultural chemicals, n.e.c. 74.78 16.63 95 Miscellaneous chemical products 347.43 97.53 96 Plastics materials and resins 447.63 22.49 97 Synthetic rubber 170.03 21.51 98 Cellulosic man-made fibers 19.17 21.90 99 Organic fibers, noncellulasic 104.92 50.65 100 Fertilizer 141.87 40.46 101 Glass and glass products except containers 106.94 102.03 102 Glass container 21.09 14.76 103 Cement, hydraulic 4.45 14.70 104 Brick and structural clay tile 2.15 1.25 105 Ceramic wall and floor tile 1.18 23.01 106 Clay refactories 26.40 --- 107 Structural clay products 0.52 --- 108 Vitreous plumbing fixtures 4.82 1.00 109 Food utensils, pottery 2.59 59.01 110 Porcelain electrical supplies 11.92 16.67 111 Pottery products, n.e.c. 3.42 25.81 112 Concrete block and brick 2.17 --- 113 Concrete products, n.e.c. --- 0.99 199 TABLE C3.--Continued Number Industry giggifilc Comgggitlve 114 Ready-mixed concrete 2.85 0.03 115 Lime 2.85 2.80 116 Gypsum products 2.30 0.07 117 Cut stone and stone products 1.20 14.49 118 Abrasive products 47.38 39.57 119 Asbestos products 11.02 11.48 120 Gaskets and insulations 19.14 --- 121 Minerals, ground or treated 9.29 5.17 122 Mineral wood 14.86 0.41 123 Nonclay refactories 20.79 7.32 124 Nonmetallic mineral products 3.68 7.67 125 Blast furnaces and basic steel products 478.15 1374.09 126 Iron and steel founderies 53.11 5.81 127 Iron and steel forgings 28.51 14.63 128 Primary metal product 10.13 11.34 129 Primary copper 170.40 525.29 130 Primary lead 2.52 90.94 131 Primary zinc 4.72 62.47 132 Primary aluminum 141.38 195.45 133 Primary nonferrous metal 72.98 558.26 134 Secondary nonferrous metal --- --- 135 Copper rolling and drawing 18.77 99.85 136 Aluminum rollowing and drawing 82.78 43.93 137 Nonferrous rolling and drawing, n.e.c. 66.22 43.93 138 Nonferrous wire drawing and insulating 49.07 47.97 139 Aluminum castings 3.16 --- 140 Brass, bronze, copper castings 0.68 --- 200 TABLE C3.--Continued Number Industry Domestic Competitive Exports Imports 141 Nonferrous castings, n.e.c. 3.78 --- 142 Nonferrous forgings 10.49 --- 143 Metal cans 12.30 6.28 144 Metal barrels, drums, pails 3.89 --- 145 Metal sanitary ware 4,75 --_ 146 Plumbing fittings and brass 11.02 0.94 147 Heating equipment, except electric 40.16 4.56 148 Fabricated structural steel 35.68 27.59 149 Metal doors sash and trim 10.62 --- 150 Fabricated plate work 151.49 3.68 151 Sheet metal work 7.92 --- 152 Metal household furniture 5.79 --- 153 Mattresses and bedsprings 4.11 0.12 154 Wood office furniture 0.93 --- 155 Metal office furniture 9.98 --- 156 Public building furniture 1.52 --- 157 Wood partions and fixtures 0.74 --- 158 Metal partions and fixtures 4.69 --- 159 Venetian blinds and shades 0.93 --- 160 Furniture and fixtures, n.e.c. 2.73 93.57 161 Pulp mills 247.93 396.23 162 Paper mills, except building paper 135.94 914.61 163 Paper board mills 212.96 4.59 164 Envelopes 0.51 0,27 165 Sanitary paper products 6.27 --- 166 Wallpaper, building paper 3.01 5.62 167 Converted paper and products 77.58 22.42 168 Paperboard containers and boxes 23.66 1.69 169 Newspaper 2.87 3.51 201 TABLE C3.--Continued Number Industry giggifilc Comgggitlve 170 Periodicals 76.43 3.84 171 Book printing and publishing 143.73 69.54 172 Miscellaneous publishing 0.28 --- 173 Commercial printing 56.23 20.56 174 Manifold business forms, binders 2.86 4.09 175 Greeting card publishing 2.14 2.26 176 Miscellaneous printing services 2.49 0.83 177 Drugs 338.02 107.66 178 Cleaning preparations 89.47 8.04 179 Toilet preparations 36.37 12.49 180 Paints and allied products 51.54 0.62 181 Petroleum refining and related products 509.39 1054.87 182 Paving mixtures and blocks 1.46 -—- 183 Asphalt felts and coatings 10.50 0.09 184 Tires and inner tubes 75.05 86.90 185 Rubber footwear 1.04 82.17 186 Reclaimed rubber 103.24 13.51 187 Miscellaneous plastics products 92.02 96.59 188 Leather tanning and industrial products 43.16 67.06 189 Footwear cut stock 1.57 2.01 190 Footwear except rubber 8.23 180.11 191 Other leather products 7.96 54.45 192 Architectural metal work 1.73 --- 193 Miscellaneous metal work 33.86 --- 194 Screw machine product, bolts, nuts, washers 55.82 71.59 195 Metal stampings 216.96 15.99 196 Cutlery 12.81 29.26 197 Hand and edge tools including saws 85.29 45.12 TABLE C3.--Continued 202 Number Industry giggitlc Comgggitlve 198 Hardware, n.e.c. 52.55 26.75 199 Coating, engraving and allied serv1ces --- --- 200 Miscellaneous fabricated wire products 31.24 59.56 201 Safes and vaults 2.07 0.31 202 Steel springs 1.82 29.08 203 Pipe, valves and pipe fittings 194.36 37.65 204 Collapsible tubes --- 0.03 205 Metal foil and leaf 5.81 24.35 206 Fabricated metal products 82.40 82.35 207 Steam engines and turbines 104.02 12.30 208 Internal combustion engines, n.e.c. 351.49 67.13 209 Farm machinery 458.02 311.76 210 Construction machinery 1082.24 82.48 211 Mining machinery 107.81 --- 212 Oil field machinery 208.17 --- 213 Elevators moving stairways 7.79 1.89 214 Conveyors and conveying equipment 37.35 4.76 215 Hoists, cranes and monorails 17.91 11.47 216 Industrial trunks and tractors 73.13 3.32 217 Machine tools, metalcutting types 199.39 182.40 218 Machine tools, metal forming types 96.91 28.39 219 Special dies and tools and machine tool accessories 71.38 45.47 220 Metal working machinery, n.e.c. 129.76 18.98 221 Food products machinery 124.48 52.50 222 Textile machinery 125.15 138.62 223 Woodworking machinery 40.28 8.00 224 Paper industries machinery 72.69 41.86 203 TABLE C3.--Continued Number Industry giggitlc coTaggitlve 225 Printing trades machinery 95.87 51.04 226 Special industry machinery 353.60 6.63 227 Pumps and compressor 330.39 37.14 228 Ball and roller bearings 88.27 57.46 229 Blowers and forms 20.22 3.52 230 Industrial patterns --- 0.30 231 Power transmission equipment 114.42 13.74 232 Industrial furnaces and ovens 29.65 7.40 233 General industrial machinery 94.57 144.24 234 Machine sh0p products 13.98 --- 235 Computing and related machinery 605.40 162.68 236 Typewriters 40.93 61.67 237 Scales and balances 14.15 2.18 238 Office machine, n.e.c. 93.24 --- 239 Automatic merchandising 15.23 2.17 240 Commercial laundry equipment 31.03 3.30 241 Refrigeration machinery 280.72 7.85 242 Measuring and dispensing pumps 17.52 --- 243 Service industry machines 11.99 --- 244 Electric measuring instruments 165.61 43.73 245 Transformers 34.82 26.98 246 Switchgear and switchboard apparatus 72.83 --- 247 Motors and generators 165.21 50.11 248 Industrial controls 41.31 --- 249 Welding apparatus 49.47 4.29 250 Carbon and graphite products 20.34 22.24 251 Electrical industrial apparatus, n.e.c. 11.36 --- 252 Household cooking equipment 19.92 --- 204 TABLE C3.--Continued Number Industry giggiilc cngggitlve 253 Household refrigerators 29.35 20.20 254 Household laundry equipment 25.02 0.29 255 Electric housewares 34.85 15.44 256 Household vacuum cleaners 9.75 3.15 257 Sewing machines 28.89 76.61 258 Household appliances, n.e.c. 15.85 23.98 259 Electric lamps 30.86 22.61 260 Lighting fixtures 42.46 30.68 261 Wiring devices 111.14 52.44 262 Radio and television receiving sets 95.17 507.43 263 Phonograph records 13.33 6.06 264 Telephone and telegraph 45.66 30.46 265 Radio and television communication 418.33 136.29 266 Electron tubes 62.19 50.72 267 Semiconductors 151.98 46.58 268 Electronic components 154.87 46.06 269 Storage batteries 15.96 7.75 270 Primary batteries 10.30 8.61 271 X-ray apparatus and tubes 39.41 19.46 272 Engine electrical equipment 80.79 24.01 273 Electrical equipment, n.e.c. 35.08 64.59 274 Truck and bus bodies 12.57 --- 275 Truck trailers 14.43 --- 276 Motor vehicles and parts 2395.57 2481.55 277 Aircraft 1088.56 60.50 278 Aircraft engines and parts 317.45 30.96 279 Aircraft propellers and parts ‘ --- --- 280 Aircraft equipment, n.e.c. 588.38 187.74 281 Shipbuilding and repairing 59.77 --- 205 TABEL 03.--Continued Number Industry giggifilc cngggifilve 282 Boatbuilding and repairing 17.69 18.59 283 Locomotives and parts 102.94 --- 284 Railroad and street cars 33.10 5.68 285 Motorcycles, bikes, parts 3.96 146.72 286 Trailer coaches 14.20 --- 287 Transportation equipment, n.e.c. 10.89 41.82 288 Engineering scientific instrument 165.91 35.32 289 Mechanical measuring devices 268.49 16.95 290 Automatic temperature control 25.52 --- 291 Surgical and medical instruments 63.81 8.46 292 Surgical appliances and supplies 43.42 5.41 293 Dental equipment and supplies 24.90 5.05 294 Watches, clocks and parts 11.95 140.24 295 Optical instruments and lenses 36.53 65.03 296 Opththalmic goods 11.61 22.75 297 Photographic equipments and supplies 323.42 131.21 298 Jewelry 116.01 271.29 299 Musical instruments and parts 24.09 52.65 300 Games and athletic goods 26.44 11.23 301 Sporting and athletic goods 37.51 71.48 302 Pens, pencils, etc. 38.90 11.48 303 Artificial flower 0.69 45.43 304 Buttons, meedles, pins 12.94 24.85 305 Brooms and brushes 5.21 9.69 306 Hard surface floor covering 12.31 3.57 307 Mortician goods --- --- 308 Signs and advertising displays 2.03 0.51 309 Miscellaneous manufactures 475.60 706.45 SOURCE: U. S. Department of Commerce, U. S. Exports and Imports of SIC-based products and Area (Washington, 0.0.), 1967. APPENDIX D STATISTICAL APPENDIX TO CHAPTER VI 206 APPENDIX D STATISTICAL APPENDIX TO CHAPTER VI Notes on Data Sources for Regression Results 2a, b, c, d Our regression results 2a, b, c and d are based on statisti- cal information presented in Tables 01 and 02. Data contained in the tables are either taken or computed from: 1. Economic Resource Services, U. S. Department of Agri- culture for data on per capita food (all foods) consumption index in the United States. 2. National Foreign Assessment Center, Central Intelligence Agency for data on primary energy consumption of the United States and the rest of the world. Primary energy includes coal, crude oil, natural gas, hydroelectric, geothermal and nuclear electric power expressed in terms of coal equivalents and excludes minor fuels such as peat, shale, and fuelwoods. 3. The National Foreign Assessment Center also provides data on Gross Domestic Products in the rest of the world. The data was estimated at market prices. Data for non-communist countries was converted from national currencies by using 1973 trade conversion factors. Data for the communist countries was converted at U. S. purchasing power equivalents. 207 208 4. FAO's Provisional Food Balance Sheets, 1977 for data on per capita food consumption in the rest of the world. The data shows the estimated per capita supply on all foodstuff in the rest of the world as measured by the total production adjusted for in and out movements in trade, for changes in stocks and for any quantities used for animal feedings, seed, industrial production, or other purposes. 5. U. S. Department of Labor for data on U. S. consumer price indexes. 6. United Nations, International Trade for data on World export prices. 7. Economic Report of the President, 1979, for data on U. S. per capita disposable income. 209 TABLE D.lA.--Per Capita Consumption of Foods, Consumer Price Indexes and Per Capita Disposable Income in the United States: 1956-1975 Price Indexes Per Capita Per Capita Year Consumption Fuel Disposible All Foods Foods Oil and CIP Income Coal (l) (l) (l) (1) (2) 1956 98.1 82.2 85.9 81.4 2643 1957 96.1 84.9 90.3 84.3 2650 1958 94.9 88.5 88.7 86.6 2636 1959 96.9 87.1 89.8 87.3 2696 1960 96.4 88.0 89.2 88.7 2697 1961 96.1 89.1 91.0 89.6 2725 1962 96.4 89.9 91.5 90.6 2796 1963 96.8 91.2 93.2 91.7 2849 1964 97.8 92.4 92.7 92.9 3009 1965 97.3 94.4 94.6 94.5 3152 1966 98.5 99.1 97.0 97.2 3274 1967 100.0 100.0 100.0 100.0 3371 1968 101.5 103.6 103.1 104.2 3464 1969 101.8 108.9 105.6 109.8 3515 1970 102.7 114.9 110.1 116.3 3619 1971 103.6 118.4 117.5 121.3 3714 1972 104.0 123.5 118.5 125.3 3837 1973 102.2 141.4 136.0 133.1 4062 1974 102.9 161.7 214.6 147.7 3973 1975 102.1 175.4 235.3 161.2 4014 (1) 1967 = 100 (2) in 1972 dollars 210 TABLE D.lB.--Per Capita Consumption of Primary Energy. Consumer Price Indexes and Per Capita Disposable Income in the United States: 1965-1974 Price Indexes Per Capita Per Capita Year Consumption Fuel Disposible Primary Energy Foods Oil and CIP Income Coal (l) (2) (2) (2) (3) 1965 9216.5 94.4 94.6 94.5 3152 1966 9636.2 99.1 97.0 97.2 3274 1967 9876.6 100.0 100.0 100.0 3371 1968 10364.9 103.6 103.1 104.2 3464 1969 10795.5 108.9 105.6 109.8 3515 1970 11023.5 114.9 110.1 116.3 3619 1971 10961.4 118.4 117.5 121.3 3714 1972 11616.9 123.5 118.5 125.3 3837 1973 11960.3 141.4 136.0 133.1 4062 1974 13015.0 161.7 214.6 147.7 3973 (1) in 0.1 cubic feet. (2) 1967 = 100 (3) in 1972 dollars 211 TABLE D.2.--Per Capita Consumption of Foods, Primary Energy and Per Capita Gross Domestic Product in the Rest of the World (The World's-—the United States') and World Export Prices 1965-1974 Eggsfimgtign World Export Prices Eegsgapita Year . Domestic E56ds Eggmggy Foods Minerals Eglds Product (1) (2) (3) (3) (3) (4) 1965 886.2 809.9 101 109 103 725.8 1966 868.3 828.9 101 113 105 749.4 1967 869.4 845.5 100 109 105 767.7 1968 885.1 880.6 99 110 104 799.7 1969 888.8 924.7 104 115 108 835.8 1970 907.8 968.6 107 123 114 874.8 1971 912.5 985.2 111 131 121 896.2 1972 902.3 1,008.3 126 142 132 918.4 1973 904.5 1,047.5 182 185 160 961.5 1974 915.8 1,034.7 231 417 225 969.7 (l) in 1,000 calories (2) in 0.1 cubic feet (3) 1960 = 100 (4) in 1973 dollars IN) A P0 TABLE 0.3.--Estimated Population (in thousands) and Gross Domestic Product (in Billion 1973 U. S. Dollars) in the United States and the Rest of the World 1965-1974 Population Gross Domestic Product Year U.S.A. The Rest of the World U.S.A. The Rest of the World 1965 194,303 3,081,745 953.4 2,236.6 1966 196,560 3,141,676 1,015.6 2,354.4 1967 198,712 3,201,694 1,041.9 2,458.1 1968 200,706 3,263,461 1,090.3 2,609.7 1969 202,677 3,326,434 1,119.8 2,780.2 1970 205,879 3,389,490 1,114.9 2,965.1 1971 207,045 3,457,160 1,151.6 3,098.4 1972 208,842 3,524,641 1,222.9 3,237.1 1973 210,396 3,593,265 1,294.9 3,455.1 1974 211,909 3,663,944 1,267.1 3,552.9 SOURCES: United Nations for Population Data. CIA's National Foreign Assessment Center provides Estimated Gross National Product. 213 TABLE D4.--Indexes of Productivity in Foods and Mining Industries as Compared to Manufactured Productivity in the United States and in the World as a Whole 1965-1975 Foods Mining and Quarying Year U.S.A. World U.S.A. World (2) (3) (4) (5) (6) 1965 88.3 105.9 83.4 90.8 88.7 102.4 1966 90.6 101.7 89.1 94.3 89.0 105.9 1967 95.5 101.6 94.0 96.6 91.7 105.3 1968 96.7 99.0 97.7 97.6 95.2 102.5 1969 100.0 99.0 101.0 97.5 95.9 101.7 1970 100.0 100.0 100.0 100.0 100.0 100.0 1971 106.1 100.0 106.1 95.7 100.0 95.7 1972 101.5 95.5 106.3 88.5 101.3 87.4 1973 100.8 94.4 106.8 84.4 102.0 82.7 1974 100.0 97.1 103.1 78.4 101.4 77.3 1975 105.9 97.8 108.3 76.7 98.4 77.9 (3) = %X100, (6) = ‘g-g-X 100 SOURCE: United Nations, Yearbook of Industrial Statistics, 1976. 214 TABLE D.5.--Indexes of Renewable and Nonrenewable Resource Product Structures of Foreign Trade (RRP and NRP) and Indexes Indicating Relative Change in Population and Productivi- ties of Renewable Resource Product and Nonrenewable Resource Product (as Compared to Nonmanufactures) between the United States and the Rest of the World 1965-1975 (1970 = 100) Ye“ 111 1'2“), 13) 11) (E) (3) 1965 89.5 72.3 83.4 102.4 115.8 103.8 1966 103.7 71.7 89.1 105.9 115.5 103.1 1967 92.6 79.4 94.0 105.3 113.0 102.3 1968 100.3 86.4 97.7 102.5 110.1 103.3 1969 100.2 88.4 101.0 101.7 106.3 100.3 1970 100.0 100.0 100.0 100.0 100.0 100.0 1971 115.3 87.3 106.1 95.7 97.8 98.7 1972 121.6 79.7 106.3 87.4 98.1 97.7 1973 132.1 58.9 106.8 82.7 95.6 96.5 1974 115.1 54.1 103.1 77.3 91.0 95.2 1975 123.6 50.6 108.3 77.9 89.1 90.4 SOURCES: Columns (1) and (2): Table 5.12 Columns (3) and (4): Table 04 Columns (5) and (6): Table 03 BIBLIOGRAPHY 215 BIBLIOGRAPHY Abramovitz, Moses, and David, Paul A. 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