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Made in the World From Trade in Goods to Trade in Tasks. andreas.maurer@wto.org. Boeing Dreamliner 787. Source: Graphic News. http://online.wsj.com/article/SB10001424052748704828104576021142902413796.html. Processors , €34, 6%. Memories , €15, 3%. Integr.circuits , €32, 6%.
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Made in the World From Trade in Goods to Trade in Tasks andreas.maurer@wto.org
Boeing Dreamliner 787 Source: Graphic News
http://online.wsj.com/article/SB10001424052748704828104576021142902413796.htmlhttp://online.wsj.com/article/SB10001424052748704828104576021142902413796.html
Processors, €34, 6% Memories, €15, 3% Integr.circuits, €32, 6% Display, €22, 4% Who Captures Value in Global Supply Chains? Case Nokia N95 Camera (5 mp), €17, 3% Other parts, €59, 11% Licenses, €21, 4% Value added in Nokia’s internal support fns, €169, 31% (Excl. Operating profit & assemblylistedbelow) Source: Jyrki Ali-Yrkkö, Petri Rouvinen, Timo Seppälä & Pekka Ylä-Anttila ETLA, The Research Institute of the Finnish Economy Nokia’s operating profit, €89, 16% Final assembly, €11, 2% Distribution, €19, 4% Retailing, €60, 11%
Smiley Face (Source: Business Week International online extra, May 16, 2005, Stan Shih on Taiwan and China) Added Value R&D/Innovation Centre Global Logistics Center Higher Added-value and Lower Replacement Standardisation Brand Innovation Marketing Value Creation R&D Logistics Design Assembly Manufacture Value-added process Design Brand R&D Innovation Marketing Logistics Manufacture Assembly Standardisation
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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 • Dominance of trade in intermediate goods • Development of intra-firm trade • Increase of processing trade Global production chains and world trade Development of infrastructure and technological progress Export processing zones Outsourcing and offshoring strategies and FDI Need for new statistical measures of international 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$) Source: UNCTAD
Intermediate goods dominate world non-fuel merchandise exports • Key facts on Asia trade in intermediate goods … • Asia’s share in world exports of intermediate goods increases : 35% in 2009 • Intra-Asian trade is predominant • Asia imports more intermediate goods than it exports • Intermediate goods traded by Asian economies are more and more sophisticated • More and more concentrated trade on few components Billions of US$ • … Confirming that: • Asia is the “World manufacturer” • Asian supply chains boost the regional markets • Asian economies present a high degree of industrial specialization 2009 value Source: UNSD & WTO
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 equipmentexports 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 balanceTraditional 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 on trade • Conventional trade statistics need complement for analysing value added – data gaps and how can they be closed (TEC, WIOD, OECD/WTO)