1. Global Trade and International Classifications

3. The future of international trade statistics Responding to demands of policy makers for more information on international trade and its relation to global value chains, employment, environment and the interdependence of economies, the participants of the Global Forum on Trade Statistics identify the following points of improvement.  Improve the relevance of international trade statistics by connecting trade information and integrating it with its economic, social, environmental and financial dimensions while minimizing the response burden.  Improve the statistical production process by better defining and organizing the co-operation among national stakeholders  Improve international classifications and correspondence tables relevant for research on international trade and globalization, such as research on trade in value added, on global value chains and on outsourcing of business functions.

4. Global Business Strategies Production Process Manufacturing Processes Processing primary goods  processing intermediate goods  producing final goods Import of primary goods Import of intermediate goods Import of intermediate processing services Import of final goods processing services Support Business Functions Distribution and Logistics; Marketing and Sale; ICT Services; Research and Development; Legal and Administrative Services Import of support business services

5. 15/01/20155 Revision of the Classification by Broad Economic Categories (BEC)

6. Global Value Chains The Apple iPod, and Emblematic Case: Low Cost Assembly and Global Sourcing Regional production systems are nested within global production systems Designed in Cupertino Assembled in China

7. OECD 7 USACHN iPhone: $179.00 Assembly: $6.50 2009 US trade balance in iPhones (mio USD) CHNJPNKORGERROWWorld Gross-1,901.20000 Value added48.1-684.8-259.4-340.7-542.9-1,901.2 Components: $10.75 The iPhone example (Xing and Detert, 2010) JPN KOR GER ROW $60.6 $22.96 $30.15 $48.04 Apple sold 11.3 million iPhones in the US in 2009 Retail price: $500.00 (Profit margin: 64%)

8. Global sourcing and MNC affiliates Materials Customers Suppliers Price End Use MarketModular Lead Firm Turn-key Supplier Relational Captive Suppliers Captive Lead Firm Component and Material Suppliers Hierarchy Integrated Firm Lead Firm Full-package Supplier Component and Material Suppliers Relational Supplier Industrialized countries Developing countries Local MNC affiliates Exports

9. 9 Classification by Broad Economic Categories (Current version) Basic classes of goods in SNA 1 Food and beverages 11 Primary 111 Mainly for industryIntermediate 112 Mainly for household consumptionConsumption 12 – Processed 121 Mainly for industryIntermediate 122 Mainly for household consumptionConsumption 2 Industrial supplies not elsewhere specified 21 PrimaryIntermediate 22 ProcessedIntermediate 3 Fuels and lubricants 31 PrimaryIntermediate 32 Processed 321 Motor spiritNot classified 322 OtherIntermediate 4 Capital goods (except transport equipment), and parts and accessories thereof 41 Capital goods (except transport equipment)Capital 42 Parts and accessoriesIntermediate 5 - Transport equipment and parts and accessories thereof 51 Passenger motor carsNot classified 52 Other 521 IndustrialCapital 522 Non-industrialConsumption 53 Parts and accessoriesIntermediate 6 Consumer goods not elsewhere specified 61 DurableConsumption 62 Semi-durableConsumption 63 Non-durableConsumption 7 - Goods not elsewhere specifiedNot classified

10. 10 Classification by Broad Economic Categories (Proposed) Basic classes in SNA 1 Food and beverages products 11 Primary 111 Mainly for industryIntermediate 112 Mainly for household consumptionConsumption 113 Multi-purpose goodsNot classified 12 – Processed 121 Mainly for industryIntermediate 122 Mainly for household consumptionConsumption 123 Multi-purpose goodsNot classified 13 – Services 131 Mainly for industryIntermediate 132 Mainly for household consumptionConsumption 133 Multi-purpose servicesNot classified 2 Energy products 21 Primary 211 Mainly for industryIntermediate 212 Mainly for household consumptionConsumption 213 Multi-purpose goodsNot classified 22 – Processed 221 Mainly for industryIntermediate 222 Mainly for household consumptionConsumption 223 Multi-purpose goodsNot classified 23 – Services 231 Mainly for industryIntermediate 232 Mainly for household consumptionConsumption 233 Multi-purpose servicesNot classified 3 – Transport products 31 Goods 311 Mainly for gross fixed capital formationCapital 312 Mainly for industryIntermediate 312a Generic 312b Customized 313 Mainly for household consumptionConsumption 314 Multi-purpose goodsNot classified 32 Services 321 Mainly for gross fixed capital formationCapital 322 Mainly for industryIntermediate 323 Mainly for household consumptionConsumption 324 Multi-purpose servicesNot classified

11. 11 Classification by Broad Economic Categories Basic classes in SNA 4 – Electronic products 41 Goods 411 Mainly for gross fixed capital formationCapital 412 Mainly for industryIntermediate 412a Generic 412b Customized 413 Mainly for household consumptionConsumption 414 Multi-purpose goodsNot classified 42 Services 421 Mainly for gross fixed capital formationCapital 422 Mainly for industryIntermediate 423 Mainly for household consumptionConsumption 424 Multi-purpose services Not classified 5 – Products not elsewhere classified 51 Goods 511 Mainly for gross fixed capital formationCapital 512 Mainly for industryIntermediate 512a Generic 512b Customized 513 Mainly for household consumptionConsumption 514 Multi-purpose goodsNot classified 52 Services 521 Mainly for gross fixed capital formationCapital 522 Mainly for industryIntermediate 523 Mainly for household consumptionConsumption 524 Multi-purpose servicesNot classified

12. 15/01/201512 New Classification for Business Functions

13. A value chain describes the full range of activities that firms and workers carry out to bring a product from its conception to its end use and beyond.

14. Global Production  International Sourcing Peter Boegh Nielsen (Statistics Denmark) CORE FUNCTIONS SUPPORT C. FUNCTIONS

15. 15 Core business function Production of final goods or services intended for the market or third parties carried out by the enterprise and yielding income. The core business function equals in most cases the primary activity of the enterprise. It may also include other (secondary) activities if the enterprise considers these to comprise part of their core functions. CPC classes 88 Manufacturing services on physical inputs owned by others 854 Packaging services 87 Maintenance, repair and installation (except construction) services 89 Other manufacturing services; publishing, printing and reproduction services; materials recovery services

16. 16 Support business function Distribution and Logistics CPC classes 61 Wholesale trade services 62 Retail trade services 65 Freight transport services 671 Cargo handling services 672 Storage and warehousing services 6791 Freight transport agency services and other freight transport services 68Postal and courier services Marketing, sales and after sales services including help desks and call centres CPC classes 83114 Marketing management consulting services 836Advertising services and provision of advertising space or time 837Market research and public opinion polling services 83812 Advertising and related photography services 85931 Telephone call centre services 85962 Trade show assistance and organization services Engineering and related technical services CPC classes 833 Engineering services 8391 Specialty design services

17. 17 Support business function Distribution and Logistics Marketing and sales After sales services including help desks and call centres Engineering and related technical services ICT services Administrative and management functions Research & Development Procurement Finance and Accounting Facility Management

18. 15/01/201518 EBOPS 2010 to CPC, version 2.0 Correspondence Table

19. 15/01/201519 International Trade in service statistics Service exports/imports Statistics - BOP FATS statistics Transactions between residents and non-residents Transactions between residents

20. 20 Services transactions between residents and non-residents (BPM5) 1.Transportation 2.Travel 3.Communication services 4.Construction services 5.Insurance services 6.Financial services 7.Computer and information services 8.Royalties and license services 9. Other business services 10. Personal, cultural and recreational services 11. Government goods and services

21. 21 Services transactions between residents and non-residents (BPM6) 1.Manufacturing services on physical inputs owned by others 2.Maintenance and repair services 3.Transportation 4.Travel 5.Construction 6.Insurance and pension services 7.Financial services 8.Charges for the use of intellectual property 9. Telecommunications, computer and information services 10. Other business services 11. Personal, cultural and recreational services 12. Government goods and services

22. Starting from the existing correspondence table between EBOPS 2002 and CPC 1.0, the new correspondence table was established and was subsequently amended in accordance with the text of Chapter 10 of BPM6 and Chapter 3 of MSITS 2010. References:  MSITS 2010, Chapter 3, Section O  BPM6, Chapter 10  CPC, version 2.0 (see http://unstats.un.org/unsd/cr/registry/cpc-2.asp ) http://unstats.un.org/unsd/cr/registry/cpc-2.asp