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When we think of trade, we often think of comparative advantage. But what if a country exports and imports similar goods? This is considered intra-industry trade.

When we think of trade, we often think of comparative advantage. But what if a country exports and imports similar goods? This is considered intra-industry trade. Consider: in 2010, the US exported $1 billion in motorcycles. The US then imported $1.2 billion in motorcycles — very similar to the amount exported. Intra-industry trade has become increasingly important as a percentage of world trade, and varies by industry. For instance, there is high intra-industry trade in the US for scientific and pharmaceutical products, but low intra-industry trade in the US for clothing and apparel. This video also covers how to measure intra-industry trade by country.

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