By Alistair McGiven of the Bank’s Structural Economic Analysis Division.
This article analyses the changing nature of trade between OECD economies and the newly industrialised economies (NIEs) and considers the opportunities and challenges that this presents. It begins by assessing the growth of this trade and its relationship to domestic changes in the NIEs. It then examines the possible effects on the United Kingdom and OECD economies of the growth of trade with the NIEs. The article concludes that the overall effects should be positive, resulting in increased specialisation and growth. While there is some evidence that trade with the NIEs may be having some impact on OECD countries’ labour markets, most studies have found that this impact is relatively modest.