The purpose of this thesis is to analyse the pattern of intra-industry trade (IIT) between Sweden and EU 15 during the time period 1980-2002. Focus is put on the Swedish manu-facturing industry, which has been divided into the forest, metal and machinery industries. With help of the Grubel-Lloyd index, values have been calculated in order to measure the size of IIT with the other Member States and in product groups.

Theories about two-way trade argue that countries with similar characteristics have more IIT. The results from the empirical findings show that the Swedish IIT is higher with nearby countries such as Denmark, Finland and Germany. Similar for these countries are the factor endowments, GDP per capita, culture, language, and the closeness to Sweden. The forest industry has more net trade than IIT. In the metal and machinery industries, the IIT is as large as the net trade. Regarding two-way trade within product groups, the analysis proved that products which can be differentiated into more sub-groups have more IIT. A large part of the products have higher net trade than IIT.