2004–2007: Eu expansion

In early 2004, 10 mostly former communist states joined the EU in its biggest ever expansion, enlarging the union to 25 members, with another eight making associated trade agreements. The acceding countries are bound to join the Eurozone and adopt the common currency Euro in the future. The process includes the European Exchange Rate Mechanism, of which some of these countries are already part.

Most European economies are in very good shape, and the continental economy reflects this. Conflict and unrest in some of the former Yugoslavia states and in the Caucasus states are hampering economic growth in those states, however.

In response to the massive EU growth, in 2005 the Russian dominated Commonwealth of Independent States (CIS) created a rival trade bloc to the EU, open to any previous USSR state, (including both the European and Asian states). 12 of the 15 signed up, with the three Baltic states deciding to align themselves with the EU. Despite this, the three Caucasus states^{[citation needed]} have said in the past they would one day consider applying for EU membership, particularly Georgia. This is also true of Ukraine since the Orange Revolution.

Regional variation

European countries with a long history of trade, a free market system, and a high level of development in the previous century are generally in the north and west of the continent. They tend to be wealthier and more stable than countries congregated in European east and south, even though the gap is converging, especially in Central and Eastern Europe, due to higher growth rates.

The poorest states are those that just emerged from communism and civil wars, namely those of the former Soviet Union and Yugoslavia, excluding Slovenia. Former Western Bloc itself presents some living standards and development differences, with the greatest contrast seen between Scandinavia (Sweden, Norway, Denmark, Finland) and Spain, Portugal, Italy and Greece.

Below is a map of European countries by gross national income per capita. High income countries – as defined by the World Bank – in blue ($12,196 or more), upper middle income in green ($3,946 – $12,195) and lower middle income ($996 – $3,945) in yellow.

3. Trade policy of Japan Exports

Japanese exports grew rapidly in the 1960s and 1970s, but growth slowed considerably during the 1980s. Over these decades, both the composition and the reputation of products from Japan changed profoundly.

Because of the success of certain exports, Japan is often viewed as a heavily export-dependent nation. As an example, just under half of all automobiles produced in Japan were exported.

The growth of Japanese exports during the 1960s and 1970s was truly phenomenal. Beginning in 1960 at US$4.1 billion, merchandise exports grew at an average annual rate of 16.9% in the 1960s and at an average annual rate of 21% in the 1970s. From 1981 to 1988, however, export growth averaged 11.3% per year, about one-half the level of the 1970s. By 1990 merchandise exports reached US$286.9 billion.

The growth in exports can be viewed in terms of both pull and push factors. The pull came from increasing demand for Japanese products as the United States and other foreign markets grew and as trade barriers in major market countries were reduced. Another pull factor was the price competitiveness of Japanese products. From 1960 to 1970, Japan's export price index increased by only 4%, reflecting the high rate of productivity growth in the manufacturing industries producing export products. Inflation was higher in the 1970s, but export prices were still only 45% higher in 1980 than in 1970 (growing at an average annual rate of less than 4%), considerably lower than world inflation. The 1980s began with another short burst of inflation because of oil price increases in 1979, but by 1988 Japanese export prices were actually 23% lower than in 1980, offsetting much of the price increase of the 1980s. This record enhanced the international price competitiveness of Japanese products.

During the 1950s, Japanese export products had a reputation for poor quality. However, this image changed dramatically during the 1970s. Japanese steel, ships, watches, television receivers, automobiles, semiconductors, and many other goods developed a reputation for being manufactured to high standards and under strict quality control. The Japanese were the acknowledged world leaders for quality and design in the 1980s for some of these products. This rise in product quality also increased demand for Japanese exports.

The push behind Japan's exports came from manufacturers. Many recognized that to reach efficient levels of production they needed to adopt a global approach. Manufacturers concentrated on the domestic market (often protected from foreign products) until they reached internationally competitive levels and domestic markets were saturated. Often helped by the large general trading companies, manufacturers aggressively attacked foreign markets when they felt able to compete globally. This push factor partially accounted for the extraordinarily high level of export growth in the 1970s, when the domestic economy slowed; increasing exports was a way for manufacturers to continue expanding despite the more sluggish domestic market. Japanese manufacturers were part of larger conglomerates, the zaibatsu, which provided financing of activities. Thus, they could concentrate on gaining high market shares, without the need to achieve high profits in the process.

Exports included a wide variety of products, virtually all of which were processed to some degree. After the war, the composition of exports shifted through technological progression. Primary products, light manufactures, and crude items, which predominated during the 1950s, were gradually eclipsed by heavy industrial goods, complex machinery and equipment, and consumer durables, which required large capital investments and advanced technology to produce. This process was illustrated vividly in the case of textiles, which composed more than 30% of Japanese exports in 1960, but less than 3% by 1988. Iron and steel products, which had grown rapidly in the 1960s to become nearly 15% of exports by 1970, declined to less than 6% of exports by 1988. Over the same period, however, exports of motor vehicles rose from under 2% to over 18% of the total. In 1991 Japan's major exports were motor vehicles, office machinery, scientific and optical equipment, and semiconductors and other electronic components.

After the Fukushima Nuclear Disaster in 2011 concerns were expressed about the safety of Japanese food exports. Factory output was also badly affected by power supply problems.