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
Chart 10 Contributions to year-on-year growth in world merchandise exports, 2007Q1 - 2010Q4 Percentage change in US$ values 40 28 28 26 30 25 23 21 18 17 14 20 16 14 12 13 15 13 13 10 11 10 6 5 10 6 4 14 13 12 11 10 10 9 9 7 7 7 3 0 -7 -13 -18 -19 -5 -10 -12 -12 -20 -13 -14 -30 -25 -31 -33 -40 2007Q1 2007Q2 2007Q3 2007Q4 2008Q1 2008Q2 2008Q3 2008Q4 2009Q1 2009Q2 2009Q3 2009Q4 2010Q1 2010Q2 2010Q3 2010Q4 Contribution of developing economies + CIS a Contribution of developed economies 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 Note 10% respectively. Source: 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 Source: Sturgeon, J.S., MIT, within Global Forum on Trade Statistics global production 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 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 Billions of US$ • Intermediate goods traded by Asian economies are more and more sophisticated • More and more concentrated trade on few components … 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
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) High Value ‐ Added Added Product and Value R&D/Innovation Global Logistics Service Centre Centre Center Higher Added ‐ value Standardisation and Lower Replacement Brand Innovation Marketing Value Creation R&D Logistics Design Assembly Manufacture Manufacture Assembly Design I R&D n Standardisation B Marketing Logistics n r a o n Value ‐ added process v d a t i o n
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 • Dominance of trade in and trade policy incentives intermediate goods • Development of intra ‐ firm trade • Increase of processing Global production chains Development of infrastructure trade and world trade and technological progress Export processing zones Outsourcing and offshoring strategies Need for new statistical and FDI 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
China 1985 Indoneisa Japan Korea Malaysia Taiwan Philippines Singapore Thailand USA A a n a a n a s e d a a S n e s i e r n s o i i p w r n U a h e y o p a a i i C l n K a p i a J l a o p a T g h d i M l n T i n h i S I P Source: Asian IOT, 1985, 1995,2000,2005 (preliminary), IDE ‐ JETRO
1995 China Indoneisa Japan Korea Malaysia Taiwan Philippines Singapore Thailand USA a a A a n a n s e d i s e n n a a r S e s o i p n i w a r y e U h o p a i l a n i p i C a K a a J l o a p g T h d i M l n T i n h i S I P Source: Asian IOT, 1985, 1995,2000,2005 (preliminary), IDE ‐ JETRO
China 2000 Indoneisa Japan Korea Malaysia Taiwan Philippines Singapore Thailand USA A a a n a a n s e d a a n e S s i r e n s o i i p w r n U a h e y o p a a i C i l n a p K i a J a l o p a T g h d i M l n T n i h i S I P Source: Asian IOT, 1985, 1995,2000,2005 (preliminary), IDE ‐ JETRO
2005 China Indoneisa Japan Korea Malaysia Taiwan Philippines Singapore Thailand USA Malaysia USA Indoneisa China Japan Korea Taiwan Philippines Singapore Thailand 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 on trade • To provide a more realistic evaluation of bilateral trade balances and regional trade
“It’s the value added economy, stupid !” Source: www.themagicpallet.com
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