1. 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. 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. 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. 4  Example of policy question or analysis  Data gaps Strategy

5. 5 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! Goods Trade Percent Data: Statistics Canada Source: Office of the Chief Economist, DFAIT

6. 6 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. FDI and Services Trade CountryShare U.S.44.0% U.K.11.0% Barbados6.9% Ireland3.8% Cayman Islands 3.3% Bermuda3.1% France2.7% Australia2.2% Hungary2.1% Bahamas2.0% CountryShare U.S.53.7% U.K.6.5% Germany2.7% France2.7% Switzerla nd 2.3% Bermuda2.1% Japan1.8% China1.6% Barbados1.5% HK, China1.4% Data: Statistics Canada; FDI 2009, services 2008. Source: Office of the Chief Economist, DFAIT

7. 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. Data: Statistics Canada, 2004 Source: Office of the Chief Economist, DFAIT Percent

8. 8  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. A Global Value Chain Perspective, cont… Canada’s Foreign Affiliate Sales and Employees by Region 2007 ($)Share (%) Total sales458,417100.0 United States238,15252.0 U.K.32,8387.2 Other EU55,80512.2 Other OECD38,5568.4 Other93,06620.3 2007 (#) Share (%) Total employees1,135100.0 United States59952.8 U.K.686.0 Other EU16114.2 Other OECD837.3 Other22419. Data: Statistics Canada Source: Office of the Chief Economist, DFAIT

9. 9  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. Firm-level Data The Average Value of Exports per Firm After Initial Entry $ ‘000s Data: Statistics Canada Source: Office of the Chief Economist, DFAIT

10. 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.