CARIFORUM and UK EPA Study

The theory is that a country will trade according to its comparative advantage. That is, it will export those products for which it has a comparative advantage and import those products for which it has a comparative disadvantage. The RCA, however, is not free from distortions and while it indicates the extent to which comparative advantage may exist, it does not given any insights into its origins (for e.g., factor endowments).

Table 12: UK Top 10 products with RCA >1

United Kingdom

PRODUCT

2019

Works of art, collectors' pieces & antiques Engines & motors, non-electric; parts, n.e.s. Silver, platinum, other metals of the platinum group

13.61334 7.387348 5.589246 4.313808 4.139974 3.599533 3.565485 3.527367 2.96621 2.929067

Alcoholic beverages

Worn clothing and other worn textile articles

Printed matter

Cinematograph films, exposed & developed Aircraft & associated equipment; spacecraft, etc. Ferrous waste, scrape; remelting ingots, iron, steel Gold, non-monetary (excluding gold ores and concentrates)

To the extent that the UK has a comparative advantage in a product then, all things being equal, it will specialise in the production of that product. Empirical analysis has shown in fact that a large proportion of trade is also intra-industry trade (that is, trade in goods within the same industry). The literature, however, appears to suggest that this type of trade seems to take place between similar countries. A review of trade patterns between the CF and the UK, shows that CF exports to the UK are observed in products which, for the most part, do not enjoy a top 10 rank in terms of its comparative advantage. As shown in Section 4, UK imports from the CF fall into 11 main tariff lines as shown in the table below.

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