1 / 14

Overview of US Participation in Global S upply C hains Comments by Robert Koopman

Overview of US Participation in Global S upply C hains Comments by Robert Koopman Chief Economist, USITC. Prepared for Washington International Trade Association panel Does America Win in a Global Economy? A Look at Global Value Chains. Washington, DC March 20, 2012

damali
Download Presentation

Overview of US Participation in Global S upply C hains Comments by Robert Koopman

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Overview of US Participation in Global Supply Chains Comments by Robert Koopman Chief Economist, USITC. Prepared for Washington International Trade Association panel Does America Win in a Global Economy? A Look at Global Value Chains. Washington, DC March 20, 2012 These comments are mine and do not reflect the views of the US International Trade Commission, or any of its individual Commissioners. 1

  2. Trade Has Become a Larger Part of the U.S. Economy • Trade, as a share of U.S. gross domestic product, has increased from 9.2 percent in 1965 to almost 30 percent in 2010. • Trade data is a gross concept, not a value added concept. Exports and imports are gross sales, while GDP is value added. 2

  3. U.S. Trade with FTA and Non-FTA Partners Source: U.S. Department of Commerce.

  4. Global supply chains:Sources of value in a specific product Germany iPhone: $179.00 Assembly: $6.50 $30.15 Korea • Although the iPhone says “made in China”, only a small amount ($6.50) of the $179 value of each iPhone exported to the US is added in Chinese assembly. • The United States adds $10.75 of value in components to each phone—more than China! • Apple and other U.S. retailers capture substantial value ($321) Retail price: $500.00 China USA $22.96 Japan $60.60 Components: $10.75 Rest of world $48.04 Source: Xing and Detert, 2010

  5. Global supply chains:Measuring participation with value added • A global supply chain contains a series of linked companies. • Each company receives inputs, adds value, and sends good or service to another company or final consumer • Value added includes worker compensation and company profits. • USITC tracked the value added to goods and services as they traveled around the world in 2004. • Through system of linked international input-output tables. 5

  6. Global supply chains:Sources of value in U.S. goods and services Note: U.S. absorption refers to total use by U.S. consumers , companies, and government. Key facts on U.S. imports, exports, and production • Imports: • The US contributes more value to U.S. imports (8.3%) than does China (7.7%) (U.S. components are sent abroad and U.S. value returns in finished goods) • The Americas, Asia, and Europe are all important sources of value • Absorption: Total use by U.S. consumers, companies, and government • 89.0% of the value of goods and services used in the U.S. is generated in U.S. • But for some industries, the U.S. contribution is much lower (1/3 in electronics) • Exports: The U.S. contributes 87.1% of the total value in U.S. exports • Source: Economic Effects of Significant U.S. Import Restraints, Seventh Update, August 2011, Publication 4253. 6

  7. Value added in Imports and Exports, by sector

  8. Export product categories with Low DVA in China in percent, 2002 – source: KWW 2008

  9. Export product categories with Low DVA in Mexico in percent, 2003 – source KDWW 2011.

  10. Global supply chains:A new look at trade deficits • Trade deficits with China and Mexico are smaller in value-added terms • Their value-added is much lower than the official “gross” trade value for many products they export to the US • Source: Economic Effects of Significant U.S. Import Restraints, Seventh Update, August 2011, Publication 4253. 11

  11. Decomposition of Gross Exports--Actual data, 2004. Source USITC Pub 4253. Advanced economies Asia NICs Emerging Asia Other emerging China Mexico

  12. SMEs Create Large Share of U.S. Export Value • On a final product basis (the normal accounting system for trade), • SMEs account for 28% of exports • Large firms accounting for the remaining 72% • SMEs contribute about 41% of the total value of exports; this activity supports 4 million jobs • From measuring exports by value that firms contribute, including the contributions of intermediate inputs • Source: Small and Medium-Sized Enterprises: Characteristics and Performance, November 2010, Publication 4189. 13

  13. Global supply chains:Effects of U.S. participation • Effects on U.S. companies • Companies achieve increased productivity, lower costs • Success often requires focus on coordinating tasks of other firms in chain • Effects on U.S. consumers • Consumers gain: Lower prices, faster access to goods • Effects on U.S. workers • Higher-skilled workers likely benefit • The effect on lower-skilled workers is ambiguous • Workers performing routine tasks most at risk • No consensus on overall effect on workers; Several studies suggest small but positive effect 14

More Related