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Spain FOREIGN ECONOMIC RELATIONS
Spain has had a long legacy of tariff protectionism and
economic isolationism, and until the 1960s it remained
outside
the West European and international economic mainstreams.
Spain's
effort in the late 1980s to accelerate its integration
into the
EC customs and economic structures resulted in a drastic
accommodation to international and West European trading
standards.
When Spain embarked on a period of economic
modernization in
the 1960s, its foreign trade, as a percentage of overall
economic
activity, was below the average for other major West
European
countries. Exports and imports amounted to about 16.5
percent of
the Spanish GDP in 1960. During the 1960s, Spain's foreign
trade
increased at an annual rate of about 15 percent; in the
1970s, it
grew at an even higher rate. After the oil price increases
of the
1970s slowed the world economy, Spanish trade expanded
less
rapidly. By 1984, after a period of sluggish growth,
foreign
trade made up about 25 percent of the country's GDP.
According to
the Economist, in 1987 Spanish imports and exports,
respectively, accounted for 16.8 and 11.7 percent of the
nation's
GDP. These figures indicated an increasing linkage with
the world
economy, but even in the 1980s foreign trade played a
smaller
role in Spain's economy than it did in most other European
countries.
Spain has not had a positive trade balance since 1960,
when
exports of US$725 million exceeded imports by US$4
million. In
1961 imports were about one-third larger than exports--a
quantitative relationship that, for the most part, has
held
steady ever since then, despite enormous increases in
Spanish
exports. In the mid-1980s, Spain's trade deficits ranged
from
just over US$4 billion in 1984 and in 1985 to US$13
billion in
1987, when merchandise imports amounted to US$49.1
billion, and
exports, to US$34.2 billion. A booming economy with strong
domestic demand was responsible for a surge of imports in
1987--
an increase of 25 percent, compared to 1986.
Spain's chronic trade deficits were often offset by
large
earnings from the tourist industry and by remittances from
Spaniards working abroad. The revenue from these two
sources
often allowed invisible receipts to exceed the trade
deficit, the
result being a surplus in the nation's current account
balance.
In 1983 Spain's current account balance registered a
deficit of
US$2.7 billion, but this was followed by surpluses during
the
next four years. In 1985 the surplus amounted to US$2.8
billion,
and in 1986 it was US$4.2 billion. The surplus for 1987
was only
US$184 million but, as capital goods made up much of that
year's
imports, economists were not alarmed.
Although famous for its production of citrus fruits,
olives,
and wine, about three-quarters of Spain's exports
consisted of
manufactured products in the mid-1980s (see
table 10,
Appendix).
In 1986 and in 1987, manufactured goods made up 74.4 and
72.4
percent of the country's exports, respectively, while
foodstuffs
accounted for 16.1 and 17.6 percent, respectively. In
these two
years, raw materials made up about 4 percent of Spain's
exports,
and fuel products, about 6 percent. Merchandise imports
generally
exceeded merchandise exports by about one-third. In the
1980s,
manufactured goods constituted about two-thirds of all
imports,
fuels as much as one-fifth, and other raw materials and
foods
about one-tenth each.
Data as of December 1988
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