Made in the World From Trade in Goods to Trade in Tasks - - PowerPoint PPT Presentation

Made in the World

From Trade in Goods to Trade in Tasks

andreas.maurer@wto.org http://www.wto.org/english/res_e/statis_e/miwi_e/miwi_e.htm

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10 20 30 40 2007Q1 2007Q2 2007Q3 2007Q4 2008Q1 2008Q2 2008Q3 2008Q4 2009Q1 2009Q2 2009Q3 2009Q4 2010Q1 2010Q2 2010Q3 2010Q4

Chart 10 Contributions to year-on-year growth in world merchandise exports, 2007Q1 - 2010Q4

Source: Percentage change in US$ values Note Contribution of developed economies Contribution of developing economies + CIS a World merchandise exports, year-on-year percentage change a Includes significant re-exports. Due to scarce data availability, Africa and Middle East regional totals are under-represented by about 5% and 10% respectively. WTO Secretariat estimates based on data compiled from IMF International Financial Statistics; Eurostat Comext Database; Global Trade Atlas and National Statistics.

http://online.wsj.com/article/SB100014240527487048281045760211429024 13796.html

The Apple iPod

Emblematic Case: Low Cost Assembly and Global Sourcing.

Designed in Cupertino Assembled in China

(3.8% of value added)

Regional production systems are nested within global production

Source: Sturgeon, J.S., MIT, Global Forum on Trade Statistics

systems

Fragmentation of production: the example of the Boeing 787 Dreamliner

Made in the world

Source: Meng & Miroudot

Intermediate goods dominate world non‐fuel merchandise exports

… Confirming that:

• Asia is the “World manufacturer”
• Asian supply chains boost the regional markets
• Asian economies present a high degree of industrial specialization

Key facts on Asia trade in intermediate goods …

• Asia’s share in world exports of intermediate goods increases : 35% in 2009
• 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

2009 value

Billions of US$

Source: UNSD & WTO

Smiley Face: conceptual model of the shift to a high value added, globally integrated, services economy

(Source: Business Week International online extra, May 16, 2005, Stan Shih on Taiwan and China)

Higher Added‐value and Lower Replacement

High Value‐Added Product and Service Centre

Marketing Brand Innovation Design R&D

R&D/Innovation Centre

Value Creation

Standardisation I n n

• v

a t i

• n

R&D Design Added Value Manufacture Assembly Logistics Marketing B r a n d Standardisation

Value‐added process

Global Logistics Center

Logistics Assembly Manufacture

Intra‐firm trade in US total private services exports, 1997‐2007

Trade patterns and global value chains in East Asia :

From Trade in Goods to Trade in Tasks

andreas.maurer@wto.org

Global production chains – Ins and outs

International consumer demand Emergence of “Trade in tasks”: Lower applied tariffs and trade policy incentives Development of infrastructure and technological progress Export processing zones Outsourcing and offshoring strategies and FDI Need for new statistical measures of international trade

Global production chains and world trade

• Dominance of trade in

intermediate goods

• Development of intra‐

firm trade

• Increase of processing

trade

Asian economies have relatively low applied tariffs on imports (especially on semi‐processed goods)

Source: WTO

Export processing zones account for about 20% of total merchandise exports of developing economies

(2006 or most recent year)

: economies with EPZs

Sources: ILO & WTO

Asia is the most attractive FDI destination in the developing regions

(Billions of US$)

Source: UNCTAD

C h i n a I n d

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e i s a J a p a n K

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e a M a l a y s i a T a i w a n P h i l i p p i n e s S i n g a p

• r

e T h a i l a n d U S A USA Thailand Singapore Philippines Taiwan Malaysia Korea Japan Indoneisa China

1985

Source: Asian IOT, 1985, 1995,2000,2005 (preliminary), IDE‐JETRO

C h i n a I n d

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e i s a J a p a n K

• r

e a M a l a y s i a T a i w a n P h i l i p p i n e s S i n g a p

• r

e T h a i l a n d U S A USA Thailand Singapore Philippines Taiwan Malaysia Korea Japan Indoneisa China

1995

Source: Asian IOT, 1985, 1995,2000,2005 (preliminary), IDE‐JETRO

C h i n a I n d

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e i s a J a p a n K

• r

e a M a l a y s i a T a i w a n P h i l i p p i n e s S i n g a p

• r

e T h a i l a n d U S A USA Thailand Singapore Philippines Taiwan Malaysia Korea Japan Indoneisa China

2000

Source: Asian IOT, 1985, 1995,2000,2005 (preliminary), IDE‐JETRO

China Indoneisa Japan Korea Malaysia Taiwan Philippines Singapore Thailand USA USA Thailand Singapore Philippines Taiwan Malaysia Korea Japan Indoneisa China

2005

Source: Asian IOT, 1985, 1995,2000,2005 (preliminary), IDE‐JETRO

Towards a new measure of international trade

• Traditional statistics present some biases:

– Multi‐counting of trade flows in intermediate goods – 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

Computers and electronic equipment exports and their domestic and imported contents (in billions of $ and percentage)

Source: WTO, based on IDE‐JETRO Asian Input‐Output tables

United States‐China trade balance Traditional versus VA measure (in billions of US$)

Sources: UN Comtrade Database, IDE‐JETRO AIO table and WTO estimates

Summary of the benefits of trade in value added analysis

• A better evaluation of the actual contribution of

international trade to an economy (incl. development, employment, environment)

• To highlight the interdependency of economies, and the

counter‐productive effects of protectionist measures on economies and enterprises they are supposed to protect

• Better evaluation of the contribution of the services sector
• n trade
• To provide a more realistic evaluation of bilateral trade

balances and regional trade

“It’s the economy, stupid !” value added

Source: www.themagicpallet.com