Global Forum on Trade Statistics Measuring Global Trade – Do We Have the Right Numbers? Geneva Switzerland 2-4 February,

1. Global Forum on Trade Statistics Measuring Global Trade – Do We Have the Right Numbers? Geneva Switzerland 2-4 February, 2011 Aaron Sydor Office of the Chief Economist Foreign Affairs and International Trade Canada

2. Overview • Trends in policy analysis and research…what’s new? • But not all gaps are due to new developments. • A user’s perspective of data gaps: • Examples of policy analysis and research; and • Notable data gaps.

3. Trends in Policy Analysis and Research • Rising importance of non-OECD countries • Strengthening of North-South and South-South linkages • Global value chains • A ‘global commerce’ approach • Increased emphasis on operations of multinationals; offshoring/outsourcing • International fragmentation of all stages of the value chain • Firm-level analysis • Link between real and financial flows

4. Strategy • Example of policy question or analysis • Data gaps

5. Goods Trade Share of ‘Others’ in Canadian Goods Trade • Non-OECD countries poorly represented in BOP data: • Little price information by product and destination; • BOP categories do not match industries; and, • Terms of trade and prices increasingly important. • Merchandise (customs based data): • Link to tariffs; and, • Access to international data… make Comtrade free! Percent Data: Statistics Canada Source: Office of the Chief Economist, DFAIT

6. FDI and Services Trade Top Ten Destinations for Canadian FDI and Service Exports • Destination and source for FDI does not match well with real economic activity: • First destination and tax havens; • Important for BITs and service delivery; and, • Tracking GVCs. • Services – measurement, lack of detail on modes, lack of country detail, BOP does not match industry categories; • Increasingly important in knowledge-based economies; and, • Trade negotiations. Data: Statistics Canada; FDI 2009, services 2008. Source: Office of the Chief Economist, DFAIT

7. A Global Value Chain Perspective U.S. Content of Canadian Manufacturing Exports • Using I/O tables to measure GVCs: • Proportionality in use and source. • Other gaps: • End-use classification systems (BEC); • Intra-firm trade; and • Value-added measures of trade. Percent Data: Statistics Canada, 2004 Source: Office of the Chief Economist, DFAIT

8. A Global Value Chain Perspective, cont… Canada’s Foreign Affiliate Sales and Employees by Region • The location of activities: • Linking activities to products or performing industry; • For example, R&D, legal, accounting, etc to the product or industry that they are contributing to. • Operations of foreign MNES: • Country detail; • Types of activities in what industries; and, • Linkages back to domestic economy. Data: Statistics Canada Source: Office of the Chief Economist, DFAIT

9. Firm-level Data The Average Value of Exports per Firm After Initial Entry            • Tracking the dynamics of individual exports and importers and by size groups. • Better links international performance to domestic policy agenda, for example productivity. • Linking exporter registry data (from customs documents) to other firm characteristics; • Link between exporter and importer registries…a form of I/O structure; • Moving beyond customs data; and • Access. $ ‘000s Data: Statistics Canada Source: Office of the Chief Economist, DFAIT

10. References • Fenstra et al “Report on the State of Available Data for the Study of International Trade and Foreign Direct Investment”, NBER, 2010. • Gereffi and Sturgeon “The Challenge of Global Value Chains: Why Integrative Trade Requires New Thinking and New Data”, Industry Canada, 2008. • General Accounting Office “Current Government Data Provide Limited Insight into Offshoring of Services” 2004. • Maurer and Degain “Globalization and trade flows: what you see is not what you get!”, WTO, 2010. • Nordas “International production sharing: a case for a coherent policy framework”, WTO, 2005. • Ridgeway “Data Issues on Integrative Trade between Canada and the US: Measurement Issues for Supply Chains, Trade Policy Research, 2006. • ______ “Canada’s Annual Report on The State of Trade”, Foreign Affairs and International Trade Canada.