From Trade in Goods to Trade in Tasks

Regional Networks in Global Supply Chains

Project progress reportWTO/IDE-JETRO

Trade determinants

Tariffs

Trade-related infrastructure

Trade patterns

FDI

Trade in intermediate goods

Processing trade

New metrics of vertical trade & TVA

Vertical specialization and domestic content of exports (TVA)

MFN Applied TariffsMFN Applied Tariffs

Source: World Tariff Profiles, 2010

Tariff Escalation in selected Asian economies(percentage)

Source: World Tariff Profiles, 2010

Source: UNCTAD, 2010

Data Source: World Bank – Doing Business.

Regional share of FDI Inward and Outward Flows in total World – 1985, 1995 & 2008, (percentage).

Inward Outward Data Source: UNCTAD, 2010.

Changes in business practices/strategies led to the

development of international outsourcing of input

goods or services

Offshoring

Outsourcing

affiliate non-affiliate

at home domestic production within the

firm

domestic outsourcing

abroadFDI

intra-firm trade

international outsourcing

arms' length trade

The rise of processing trade - Some key figuresThe importance of goods for inward processing in developing economies total exports

and imports (minimum approximation), 2000 2008‑(Billion, US dollars)

Exports, BOP basis

0

1000

2000

3000

4000

5000

6000

2000 01 02 03 04 05 06 07 2008

Goods resulting from inward processing Other goods

Imports, BOP basis

0

1000

2000

3000

4000

5000

6000

2000 01 02 03 04 05 06 07 2008

Goods for inward processing Other goods

Source: IMF Balance of Payment statistics partially completed with WTO estimates for missing data.

0

100

200

300

400

500

600

700

800

900

1000

19881989 19901991 19921993 199419951996 19971998 19992000 200120022003 20042005 20062007 20082009

Other commercial services

Intermediates

Total Merchandise

Trends in world trade of total merchandise, intermediate goods and other commercial services,

Index 1988 =100

Source: WTO and UN Comtrade database

0

10

20

30

40

50

60

70

80

Share of intermediate goods in total non-fuel merchandise trade, 2009, in %

Imports

Exports

Intermediate goods in trade flows reflect the role of a country in the GSC

Source: WTO and UN Comtrade database

Measuring value added and vertical specialization – an Measuring value added and vertical specialization – an illustrative exampleillustrative example

Source: WTO

Statistical issue: Data relevance, i.e. the degree to which data meets reality Traditional measures (custom value, country of origin) could mislead: What You See

is No More What You Get Economic policy issue: international trade policies hinge on the quality of the data used

You can’t manage what you can’t measure: quality of decisions is based on data Systemic issue: Symbiotic relationship between statistics, research and policy:

Research and policy are limited by the availability of relevant and accurate statistics. Policy and academic theory create a need for statistics, determine its relevance and in turn, contribute to its quality

Political issue: economic and social effects of globalization GVCs have fuelled controversies without adequate data for the debate on

Labour issues (industrial VA can track labour content and sectoral origin) Environment issues (direct –transportation- or indirect as IO technical

coefficients relate to production functions)

Why looking for new metrics of international trade?

Need to fill the information gap between reality and available data

Using IIOs to estimate the import and domestic content of exports

• International I-O (II-O)tables show the production and trade linkages by country and sector, origin and destination and how each country/sector's output is used, either as input into other sectors production or as final demand

• II-O tables allow to estimate the value of the imported inputs used directly and indirectly in the production of exported goods, and

• Cover both goods and services

Tool for: Identifying the sectoral source of the national value added imbedded in

exports allowing further research on labour content, CO2 content, …

Source: WTO and IDE-JETRO

World Input-Output Table

- Period: 1995-2006- 40 countries included (EU-15, NAFTA, BRI: Brazil, Russia, IndiaCHN: China, OTHER: Turkey, Japan, South Korea, Taiwan, Indonesia,

Australia

- 59 products (corresponding to CPA)- 35 industries (corresponding to NACE Rev. 1)

Business functions/International Outsourcing

- A new European Survey on Business Functions

Trade by Enterprise Characteristics

- Linkages of business and trade registers to develop firm-level data on import content of exports