production chains on trade€¦ · production chains on trade: Towards a measure of ... Outsourcing...
Transcript of production chains on trade€¦ · production chains on trade: Towards a measure of ... Outsourcing...
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The impact of globalThe impact of global
production chains on trade:pTowards a measure of
i i l d i l dd dinternational trade in value added
Christophe Degain, WTO
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Global production chains and world trade – Ins and outs
International consumer demandInternational consumer demand
Emergence of “Trade in tasks”:
Lower applied tariffs and trade policy incentives
• Predominance of trade in intermediate goods
• Development of intra‐firm
Development of infrastructure and technological progress
Global production chains and world trade
evelopment of intra firmtrade
• Increase of processing trade
Export processing zones
Outsourcing and offshoring strategies and Foreign Direct Investment (FDI) Need for new statistical
measures of international trade
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Asian economies have relatively low applied tariffs on imports (especially on semi‐processed goods)( p y p g )
Source: WTO
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Export processing zones (EPZs) account for about 20 % of total merchandise exports of developing economies p p g
Sources: ILO and WTO
(2006 or most recent year)economies with EPZs
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Foreign Direct Investment (FDI)World and regional FDI inflows (billions of US$)g ( $)
Source: UNCTAD
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Intermediate goods dominate world non‐fuel merchandise exports$
ons of U
S$Billio
Source: UNSD & WTO
2009 value
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Intermediate goods dominate world non‐fuel merchandise exports
Key facts on Asia trade in intermediate goods …
• Asia’s share in world exports of intermediate goods increases : 37 % in 2010i d i d i• Intra‐Asian trade is predominant
• Asia imports more intermediate goods than it exports• Intermediate goods traded by Asian economies are more and more
sophisticated • More and more concentrated trade on few components
Confirming that:… Confirming that:
• Asia is the “World manufacturer”• Asian supply chains boost the regional marketsAsian supply chains boost the regional markets• Asian economies present a high degree of industrial specialization
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Fragmentation of production: the example of the Boeing 787 Dreamliner
Source: Meng & Miroudot
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Towards a new measure of international tradeTowards a new measure of international trade
• Traditional statistics present some biases:
– Multiple counting of trade flows in intermediate goods and services
– Difficult attribution of the country of origin of an imported product
• Measuring trade in value added terms allows:
– To circumvent the biases observed with traditional statistics
– To take into account the specificity of trade occurring between the different actors of a production chain
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Some benefits of trade in value added
A b tt l ti f th t l t ib ti f• A better evaluation of the actual contribution of international trade to an economy (incl. growth, development, employment, environment)( g p p y )
• To highlight the interdependency of economies, and the counter productive effects of protectionist measures oncounter‐productive effects of protectionist measures on economies and enterprises they are supposed to protect
• Better evaluation of the contribution of the services sector on trade
• To provide a more realistic evaluation of bilateral trade balances and regional trade
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Computers and electronic equipmentexports and their domestic and imported contentsexports and their domestic and imported contents
(billions of US$ and percentage)
Source: WTO, based on IDE‐JETRO Asian Input‐Output tables
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2009 US trade balance in iPhones (millions of US$)( $)
Source: Meng and Miroudot, based on Xing and Detert (2010)
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United States‐China trade balanceTraditional vs VA measure (billions of US$)Traditional vs VA measure (billions of US$)
Sources: UN Comtrade Database, IDE‐JETRO AIO tables and WTO estimates
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Thank you – Dômo Arigatô
More info on the WTO “Made in the World” initiative (MIWI) at http://www.wto.org/miwi