conditions. Hence, trade volumes and not relative product prices matter. The trade effect
on wages and employment in the industrial countries has to be measured by calculating
the quantities of skilled and unskilled labour embodied in imports and export flows. In
our case, according to this view, wages in the footwear sector have been driven down
because footwear activities (not only finished pairs of shoes, but especially components)
formerly undertaken by unskilled workers in industrial countries are increasing being
purchased from low-wage developing countries.
Figure 1 shows the trend in the quantity (metric tons) of footwear traded within the
EU12 market (Intra-EU) and imported by the EU12 from the Extra-EU region. It is
clear that the trend rate of growth of imports from both external and EU countries
increased after the mid-1980s but that the rate of growth of extra-EU imports was
greater than that of internal EU trade.3 Hence import penetration of the EU footwear
market from external sources increased considerably after the mid-1980s. In the 1990s,
for the first time, the volume of footwear imported from outside of the EU has exceeded
internal trade in footwear. Imports from non-EU countries increased by 41 per cent
between 1976 and 1981. Between 1986 and 1994 extra-EU imports rose by 168 per cent
whilst the volume of EU production increased by 25 per cent and domestic consumption
was 43 per cent higher.
Figure 1: EU12 Intra-EC and Extra-EC Imports of Footwear in volume (1976-98)
3 The dip in intra-EU trade after 1993 may reflect the change in the measurement of trade after the
creation of the Single Market.
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