international competitiveness

international competitiveness

the ability of a country to compete successfully against other countries in INTERNATIONAL TRADE. Countries that are successful will maintain or increase their share of world exports and, by the same token, limit the extent of IMPORT PENETRATION into their domestic economies.

International competitiveness is reflected in two things:

1. price competitiveness: it is important that domestic suppliers are efficient and cost-effective and that governments can control domestic rates of INFLATION and maintain ‘realistic’ EXCHANGE RATES for their currencies;
2. nonprice competitiveness: it is equally important that domestic suppliers offer export customers attractive new products, improve the quality and performance of their products, and meet delivery dates, etc.

See TERMS OF TRADE.

Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005