European Commission Enterprise and Industry ‹#› Trade in intermediate products and EU...
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Transcript of European Commission Enterprise and Industry ‹#› Trade in intermediate products and EU...
European CommissionEnterprise and Industry
1
Trade in intermediate products and EU
manufacturing supply chains
European CommissionEnterprise and Industry
Budapest, 25 January 2011
European CommissionEnterprise and Industry
2
Trade in intermediates – the study
• Context
• Patterns of EU trade in intermediates
• Supply chains
• Case study
European CommissionEnterprise and Industry
3
Context
• What are intermediates?
• Intermediate trade and globalisation
European CommissionEnterprise and Industry
4
Intermediate products
• Products, parts and components, used for production of a final product.
• Directs inputs: parts and components used in the final products.
• Indirect inputs: some parts and components consist of other inputs which thus are used indirectly.
• Many goods, services, firms and countries involved in the process of a final product.
European CommissionEnterprise and Industry
5
Intermediate trade and globalisation
• Increased globalisation• Fragmentisation of production• Location of production globally
according to comparative advantages.• Outsourcing-offshoring and Cross-
border networks• Global value chains• Intra-firm trade
European CommissionEnterprise and Industry
6
Patterns of EU trade in intermediate products
• Overview of EU27 intermediate trade
• EU27 exports and imports
• Geographical patterns
European CommissionEnterprise and Industry
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Overview of EU27 intermediate tradePercent of total EU trade in 2008
Exports Imports
Intermediates 51 54
Consumer goods 22 23
Capital goods 20 18
Mixed categories (N.E.C)
7 5
European CommissionEnterprise and Industry
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EU27 trade in intermediates in 2008 (%) and 1999-2008 (percentage points)
Imports Exports
EU15 61 (-4.5) 58 (-5)
EU12 9 (3.9) 10 (3.9)
Advanced OECD
11 (-5.3) 12 (-3.4)
ASIA 3 (-1) 3 (-0.5)
BRIC 9 (5) 6 (3.1)
ROW 7 (1.9) 11 (2.1)
European CommissionEnterprise and Industry
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High technology industries
RoW
EU-15
EU-12
BRICS
ASIA
AOECD
-0.2
-0.1
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
-15 -10 -5 0 5 10 15 20
Changes in market shares
Cha
nges
in u
nit v
alue
ratio
s
European CommissionEnterprise and Industry
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Supply chains
• Manufacturing
• Services
• Changes over time
European CommissionEnterprise and Industry
11
Imported to domestic inputs in manufacturing 1995 and 2005 (%)
0
10
20
30
40
50
60
70
80
IE EE SK HU SI NL AT SE DK FI ES DE IT FR
%
1995 2005
European CommissionEnterprise and Industry
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Imported to domestic inputs in services 1995 and 2005 (%)
0
5
10
15
20
25
30
35
40
IE DK EE NL SI HU FI SE AT SK DE ES FR IT
%
1995 2005
European CommissionEnterprise and Industry
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Imported intermediates by industry
• Manufacturing: Highest shares of imported intermediates in high-tech, 55%
• Hungary, Ireland, Slovenia, Slovakia display high shares in all tech categories
• Services: highest shares in transport services, 26%
• Ireland, Denmark and Estonia above average all services.
European CommissionEnterprise and Industry
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Case Study – Who captures the value of the mobile phone?
• Stylised picture of the supply chain
• Breakdown of value by parts of the value chain
• Breakdown of value by regions
European CommissionEnterprise and Industry
15
The vertical supply chain of a mobile phone
Firm
Distributors
Pure component suppliers Big
retailers
Smaller retailers
Sub-assembliers Consumer
Engines’ final assembly
Assembly to
order
Components manufactured by sub-assembliers
Material providers, mines,concentrating plants
Sub-componentsuppliers
European CommissionEnterprise and Industry
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Software and other companies selling licenses
3 %
Suppliers of material inputs
11 %
Nokia50 %
Distributor3 %
Retailer11 %
Unaccountable inputs
3 %
Vendors of vendors
19 %
• The brand owner, captures a half of the total value.
• The distribution channel creates 14% of the total value added.
• Suppliers of material inputs account for 11% of the total value added.
The value added breakdown by participants in the phone’s value chain
European CommissionEnterprise and Industry
17
EU-27
ASIA
OTHER COUNTRIES
NORTH AMERICA
55%55%
18%18%17%17%
11%11%
• On average, overall 55% of the value added is captured in EU-27.
• Even in the case of final assembly in China and final sales in the U.S, EU-27 cap-tures 51% of the value added.
• In the case when the device was assembled and sold in Europe, the share of Europe rises to 68%.
The phone’s value added breakdown by regions
European CommissionEnterprise and Industry
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Thank you
• For your attention.