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Indiana Exports to Wide Range of EU Countries

March 7, 2011
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As I wrote in Indiana’s Exports to the EU Reach New Record, Indiana exports to the EU reached record levels in 2010.  However, Indiana’s export growth was not uniform across the 27 countries.   In fact, despite the recent Greek and Irish bailouts, exports for the Hoosier state to the 16 countries that use the euro increased by 26.4 percent compared to 16 percent for the EU has a whole.  Overall, 15 of the 27 EU members, including nine of the 16 countries that use the euro, bought more from Indiana in 2010 than 2009 (indicated by the light blue bars in figure 2).

Source: World Institute for Strategic Economic Research

As figure 1 shows, seven countries that bought more than $250 million worth of Indiana exports, accounting for 90% of Indiana’s exports to the EU. Among these expanding markets, Spain and Italy saw the largest percentage increases with Spain moving up from the fifth largest in 2009 to fourth largest, and Italy moved up two spots to sixth (figure 2).  As a result, Spain “punches above its weight”, as it is actually the fifth largest EU economy.  Similarly, while the Netherlands is the sixth largest economy, it is number five for Indiana.  Despite its economic troubles, Ireland remains the most open economy to Indiana’s good, since its economy is the 13th largest in the EU, yet the seventh most popular destination for EU trade (see figure 4).

 

Source: World Institute for Strategic Economic Research

Figure 1 also shows that a new country is now the Hoosier State’s most popular destination—Germany.  The German economy grew rapidly in 2010, and while this growth has been fueled by German exports, the country is also importing more (see The Ties Between Growth and Currencies for a comparison of economic growth in Europe).  As a result, for the first time since 1997 (the last time data was available), Germany bought more Indiana goods than any other European economy (see figure 2), replacing the United Kingdom, as trade with the UK actually declined between 2009 and 2010.

 

Source: World Institute for Strategic Economic Research

As a result, are Indiana’s exports are starting to become more in-line with the size of the European economies?  Figure 4 shows Indiana’s exports to the country as a percentage of GDP (light blue indicates that a country uses the euro).  The red line indicates the average amount of goods that an EU member buys from Indiana as a percentage of GDP.  Most striking is the large amount of goods that Ireland buys from the Hoosier State, and this is despite exports to Ireland decreasing by 11 percent between 2009 and 2010. The chart also shows that Western Europe receives a disproportionate share of exports from Indiana.  However, Figure 4 also shows one country that is much farther down the tables than indicated in Figure 1—Italy.  While Italy did buy the fourth largest amount of Indiana goods in 2010, as a share of GDP, it was a distant 12th.  This is particularly striking, as Italy is the EU’s fourth largest economy.  Figure 4 also reinforces the weak economic connections between Indiana and Poland, as Poland ranks 17th on this chart.

 


Source: World Institute for Strategic Economic Research, EUROSTAT

This is an area where Indiana University could help provide expertise for Indiana’s exporters.  IU-Bloomington offers instruction in 17 official languages of the EU.  Not only do these languages include official languages of the seven countries whose imports were above the red line, but also includes the significant under performers such as Italy and Poland.  In addition, IU is working hard to build ties with many of these countries.  For instance, the Estonian Ambassador to the U.S. recently visited IU, in part because IU is only one of two universities in the US that offers Estonian.  Thus, IU’s connection with many small growing economies in Europe could serve as a starting point for stronger economic ties.

In addition, due to these strong ties between the EU and the Hoosier State, the IU European Union Center will continue to sponsor events to help inform people about the changing economic situation in Europe, such as the European Responses to the Economic Crisis on April 8 in Bloomington.

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