Presentation on theme: "APEC Conference Building APEC Economies Capacities of Employing Input-Output Tables for Advanced Economic Modeling 24-25 November 2011, Singapore Christophe."— Presentation transcript:
APEC Conference Building APEC Economies Capacities of Employing Input-Output Tables for Advanced Economic Modeling November 2011, Singapore Christophe Degain, WTO The impact of global supply chains on trade: Towards a measure of trade in value added and implications for trade policy
International consumer demand Export processing zones Development of infrastructure and technological progress Lower applied tariffs and trade policy incentives Outsourcing and offshoring strategies and Foreign Direct Investment (F D I) Emergence of Trade in tasks: Need for new statistical measures of international trade Global supply chains and world trade Increase of processing trade Predominance of trade in intermediate goods Development of intra- firm trade Use and impact for trade analysis and policy
Sources: ILO and WTO economies with EPZs (2006 or most recent year)
Sources: UNSD and WTO 2009 value Billions of US$
Source: US BOP US exports of private services, (Millions of US$)
Traditional trade statistics present some biases: Multiple counting of trade flows in intermediate goods and services Difficult attribution of the country of origin of an imported product Using I-O tables and 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 To decompose the value added of exports into its domestic and foreign contents
Source: Meng and Miroudot
Source: WTO, based on Shih S., Business Week ( May 16, 2005 ) Marketing Brand Innovation Design R&D Standardization Innovation R&D Design Added Value Manufacture LogisticsMarketingBrand Standardization Manufacturing process Logistics Assembly Manufacture Assembly Customer services Services Goods Servicesand services
Source: Meng and Miroudot, based on Xing and Detert (2010)
Some evidence on the interdependency of economies within GVCs : Exports of manufactured goods rely on imported inputs (goods and services) Domestic VA is present not only in exports but also in imports (Circular trade) So called national products may be predominantly produced in other countries, while products of foreign trademarks may be manufactured in the domestic market Protectionist measures … Tariffs increase Anti-dumping measure Buying national engagement … can have counter-productive effects on economies and enterprises they are supposed to protect: Reduction of the capacity of national firms to join GVCs An increase of the cost of imported inputs affects national companies involved in international production chains, as well as the functioning or competitiveness of the chain itself !
Source: Diakantoni and Escaith, WTO (forthcoming 2012). Preliminary data, based on WTO tariffs and IDE-JETRO input-output databases
Sectoral transmission of a supply-driven shock emanating from the Japanese industries (selected countries and sectors, 2008) Notes: a/ Percentage increase in sectoral domestic production costs resulting from a 30 per cent raise in the price of intermediate inputs imported from Japan. Results higher than 2% are highlighted in red. b/ Simple average. Source: adapted from Escaith and Gonguet, (2011), based on IDE-JETRO Asian Input-Output tables.
Comparative advantage: trade in value added reveals that comparative advantage applies more to tasks than to final goods Trade and employment: the value added approach is relevant to estimate the job content of trade Trade and environment: I-O tables can help estimating countries CO2 emissions associated with trade and their potential impact on climate change Exchange rate policy: lower impact of currency revaluation on rebalancing trade imbalances
Developing and improving the statistical tools used for trade in value added analysis Development of standardised National Input-Output tables Compilation of International Input-Output tables Improving trade statistics: firm-level data, Services statistics Trade in value added Towards an internationally agreed methodology and the production of trade in value added indicators to assist trade policy Going beyond trade in value added: an income-based approach The WTO Made In the World Initiative (MIWI) at A place for discussion and sharing of experiences and information (working papers, publications,…) on trade in value added for statistical issues and trade policy matters Contact and questions :