Comparative advantage analysis in selected trade deficit categories in Australia: 1990-2006

This study develops and calculates the Comparative Advantage (CA) indices between eight selected Trade Deficit (TD) countries (China, France, Germany, Malaysia, Singapore, Thailand, United Kingdom, United States of America) in 4 selected TD goods categories (542: -Medicaments incl. Vet; 759: -Office Equipment Parts/ Accessories; 764: - Telecoms Equipment NES and 781: - Passenger Cars Etc.) and are all based on SITC-31 level of aggregation. The CA analysis was conducted by calculating and observing the Balassa Revealed Comparative Advantage Index (BRCAI), the Vollrath Revealed Export Advantage Index (VRCAI). In addition to the CA indices, the trade performance indices are analysed by calculating and observing the Trade Specialization Index (TSI), the Export Propensity Index (XPI), the Import Penetration Index (MPI) and the Export/ Import Ratio (XMR). The overall results indicate that Australia records a Revealed Comparative Disadvantage (RCD) in all the selected categories. Furthermore, there is evidence that the X in all categories is increasing overtime as a proportion of the domestic output and the M competition for the Australian producers in all categories is increasing.