The “Revealed“ Comparative Advantage and Competitiveness of the EU´s International Trade vis à vis the USA
The “Revealed“ Comparative Advantage and Competitiveness of the EU´s International Trade vis à vis the USA

Summary/Abstract: This paper examines “revealed” comparative advantage (RCA) and international trade specialisation in the EU and USA as comparative analysis between the mentioned trade partners. In the midst of preparations for the potential Transatlantic Trade and Investment Partnership (TTIP) it is necessary to examine the sectoral competitiveness of EU in relation with its trade partner – the USA. For this aim, in our analysis we have used Balassa´s index of RCA and other alternative measures of comparative advantage as well as empirical analysis for identifying the comparative advantage trend. According to our empirical analyses we found that, while, based on Balassa’s RCA index, the EU-28 has reached a comparative advantage in smaller group of 2-digits SITC commodities (32 out of 66) than the USA (40 out of 66), based on the other alternative measures and econometric analyses, the EU has not only reached a comparative advantage in more industries, but also a more stable trend of international specialisation than the USA during the examined period.

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