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A similar vagueness applies in the theory of international  
trade, where some models are predicated on the existence of  
"intra-industry trade". This arises when a country both  
imports and exports commodities in the same product  
classification category, such as different types of  
automobile. To test such models empirically, one must  
define "industry". The Standard International Trade  
Classification (SITC) of the United Nations includes the  
broad category "beverages and tobacco". If a country  
exports beverages and imports tobacco, it would be deemed  
to engage in intra-industry trade according to this  
classification. Depending on how broad or narrow the  
product categories are, a country can be shown to engage in  
various fractions of intra-industry and inter-industry  
trade. Hence some economists view intra-industry trade as a  
statistical artifact. 
 
Andrea Maneschi 
 
 
 
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