Is the pattern of trade consistent with the idea of comparative advantage? Sometimes it is difficult to say which nation has a comparative advantage in producing a given item, but let’s look at trade (export and import) in the following items between the U.S. and a few other countries to see if the pattern of trade fits what we expect.

what we expect.

•United States: computers and machine tools;

Venezuela: fuel and natural resources

Go to the U.S. Census Bureau’s site for bilateral trade statistics for the U.S. and other countries:https://www.census.gov/foreign-trade/statistics/co… and download the database.

(a)Trytheaboveexamplesorinvestigateothercountriesandgoodsthatmightbe interesting. Report your findings and discuss your result.

Hint: Recommended steps to follow for this exercise

i. Download the database “2015-Present” from“Exports and ImportsTotals 1-digit SITC.”

ii Open the data file using MS Excel (or any comparable software programs to
open spreadsheets that allows basic data analysis) and select the Data tab
on top.
iii Click on Filter. You will then see little arrows appear on the first row in each
cell.
iv Click on the arrow in the cell next to “Country.” Here, you can arrange the
data in a way that allows you to view only the country of interest. More
specifically, unselect “Select All” then scroll down to find the country you
want to see and make the selection.
v Column E shows the value of exports using data from January. Click on the
arrow next to “ExportsFASValueBasisJan” and click “descending” which will
then rearrange the U.S. export data for the country of interest.
vi Follow the same steps using Column F for U.S. import data.