1: THE SECOND UNBUNDLING: GLOBAL VALUE CHAINS

Transcription

1 Measuring Trade in Value dded, and eyond Friends of Chair Group on Internationalization 6-8 November 2013, New York 1: THE SECOND UNUNDLING: GLOL VLUE CHINS 2 1

2 The rise of GVCs: apparel, cars, toys, planes, electronics Source: Rivoli (2005), WTO (1998), Feenstra (1998), Linden et al. (2009) 3 2: THE FOG THE POTENTIL FOR MISLEDING POLICIES 4 2

3 So Gross trade statistics increasingly multiple count flows in intermediates as the production process develops over several countries Country Gross exports (intermediates) (100) Country Gross exports (110) Value-added (10) Country C Value-added (100) 5 meaning that gross trade statistics may create misleading perceptions and imperfect policies 6 3

4 For example. Where are our export markets? What do we specialise in? Which sectors create most value and jobs? Does protectionism work? Is it counterproductive. re imports bad? re there costs on importers of intermediates, particularly when they are significant exporters. What about those firms further upstream providing inputs to the imports? How should we interpret bilateral trade balances? 7 How can we respond? y measuring the value that is added by individual firms in the production process Country Gross exports (intermediates) (100) Country Gross exports (110) Value-added (10) Country C Value-added (100) 8 4

5 3: FOGLIGHTS WHT STTISTICS RE NEEDED TO RESPOND TO GVCS 9 How do we measure TiV? Using a global Input- Output table 10 5

6 OECD Inter-country I-O table National I-O tables Production linkage Final expenditure Income (Value-added) Import procurement info + ilateral Trade Database by industry and end-use categories (intermediates, capital and consumption goods) 58 countries, , 37 sectors, consistent with SN Country Country Final Demand Sector 1 Sector 2 Sector 1 Sector 2 Country Country Sector 1: Goods Z 11 Z 12 Z 11 Z 12 F 1 F 1 Country Sector 2: Services Z 21 Z 22 Z 21 Z 22 F 2 F 2 Sector 1: Goods Z 11 Z 12 Z 11 Z 12 F 1 F 1 Country Sector 2: Services Z 21 Z 22 Z 21 Z 22 F 2 F 2 Tax less subsidy on products NTZ 1 NTZ 2 NTZ 1 NTZ 2 NTF NTF International trade margin and insurance TIZ 1 TIZ 2 TIZ 1 TIZ 2 TIF TIF Value- Labor compensation VL 1 VL 2 VL 1 VL 2 dded Operating surplus VO 1 VO 2 VO 1 VO 2 Tax less subsidy on production VT 1 VT 2 VT 1 VT 2 Output X 1 X 2 X 1 X 2 11 Trade partner shares of published and harmonised database (Goods, China 2008) (reported by China) Sources: OECD TDIxE 2012ed, OECD ICIO May

7 Export partner shares of published and harmonised database (Services, Germany 2008) Sources: TIS: OECD Trade in Services by partner country, ex = exports, im = imports OECD ICIO May OECD Inter-Country I-O model 57 economies + Row, , 37 sectors OECD RIICS Other EU27 Other G20 Other South Eastern sia Other Eastern sia Other ll OECD 34 countries razil, China, India, Indonesia, Russian Federation, South frica ulgaria, Cyprus, Latvia, Lithuania, Malta, Romania rgentina, Saudi rabia runei Darussalam, Cambodia, Malaysia, Philippines, Singapore, Thailand, Viet Nam Chinese Taipei, Hong Kong China Rest of the World 7

8 Industry ISIC rev3 Industry ISIC rev3 Industry 01,02,05 griculture, hunting, forestry and fishing Utility Mining and quarrying 45 Construction Food products, beverages and tobacco Wholesale and retail trade; repairs Textiles, textile products, leather and footw ear 55 Hotels and restaurants 20 Wood and products of w ood and cork Transport and storage Pulp, paper, paper products, printing and publishing 64 Post and telecommunications 23 Coke, refined petroleum products and nuclear fuel Finance and insurance 24 Chemicals 70 Real estate activities 25 Rubber and plastics products 71 Renting of machinery and equipment 26 Other non-metallic mineral products 72 Computer and related activities 27 asic metals 73 Research and development 28 Fabricated metal products 74 Other usiness ctivities 29 Machinery and equipment, nec 75 Public admin. and defence; compulsory social security 30 Office, accounting and computing machinery 80 Education 31 Electrical machinery and apparatus, nec 85 Health and social w ork 32 Radio, television and communication equipment Other community, social and personal services 33 Medical, precision and optical instruments 95 Private households w ith employed persons 34 Motor vehicles, trailers and semi-trailers 35 Other transport equipment Manufacturing nec; recycling (include Furniture) 15 4: DRIVING WITH THE LIGHTS ON WHT DOES THE TIV DTSE REVEL? 16 8

9 Foreign content of Exports Factory sia 17 China s exports in 2009 Gross and V 18 9

10 Exports - % of GDP Only marginally higher than in UK 35% 30% 25% 20% 15% 10% 5% 0% China 50% 40% 30% 20% 10% griculture Foreign value added content of gross exports, by industry, % (EXGR_FVSH) Exports require imports Mining Food products Textiles & apparel Wood & paper Chemicals & minerals asic metals Machinery Electrical equipment Transport equipment Other manufactures Wholesale & retail Transport & telecoms Finance & insurance usiness services Other services Total 0% griculture Mining Food products Textiles & apparel Wood & paper Chemicals & minerals asic metals Machinery Electrical equipment Transport equipment Other manufactures Wholesale & retail Transport & telecoms Finance & insurance usiness services Other services Total 20 10

11 Export dependencies? V exports as a per cent of sector value-added 21 Imported intermediate inputs used in exports, 1995 and 2009 OECD Trade and griculture Directorate 22 11

12 Significant share of total intermediate imports used in exports in many countries 23 With hubs playing an important role OtherEurop e, 14.8% sia, 4.4% Rest of the world, 5.1% France, 2.1% OtherEuro pe, 16.3% sia, 3.4% Rest of the world, 4.4% Italy, 3.2% US, 3.6% Domestic, 60.7% UK, 2.4% US, 2.4% Domestic, 69.1% Germany, 8.2% France: Motor vehicles, 2009 Germany: Motor vehicles, 2009 Other sia, 6.8% Europe, 7.4% Rest of the world, 6.1% Europe, 5.6% Other sia, 8.3% Rest of the world, 9.9% Japan, 9.4% China, 9.6% Domestic, 40.6% Japan, 4.1% Chinese Taipei, 4.7% Domestic, 55.4% US, 20.1% Mexico: Electronics, 2009 China, 12.1% Korea: Electronics,

13 Foreign value added in Chinese Electrical equipment, by originating region & industry % East and S.E. sia Europe North merica Other regions South merica Mining Chemicals & minerals asic metals Electrical Transport Wholesale Transport & Finance & equipment equipment and retail telecoms insurance usiness services Other 25 Services matter Services Value-dded: % of exports, 2009 Foreign Domestic

14 Design, R&D, software etc becoming more important - Services content of transport equipment Foreign Domestic FR DEU IT JPN KOR MEX SVK ESP SWE GR US R CHN IDN 27 Significantly for some countries - China Gross exports (EXGRSH) Domestic value added in foreign final demand (FDDVSH) US JPN DEU GR FR CN KOR RUS IT US IND ESP MEX NLD HKG Gross imports (IMGRSH) Foreign value added in domestic final demand (FDFVSH) ,000 US JPN DEU KOR US SU TWN RUS R FR IND IT GR CN MYS 2009 Gross Trade surplus/deficit (TSGR) 2009 Value dded surplus/deficit (TSVFD) 200, , ,000 50, , ,000 US GR MEX FR NLD VNM TH JPN R MYS TWN KOR 28 14

15 nd throughout Factory sia Exports to China: Gross and Value-added terms, % of total Value-dded Gross Chinese Taipei Japan Korea Malaysia Thailand Hong Kong, China Singapore Philippines India Indonesia Viet Nam Cambodia runei Darussalam 29 In general the more distant the countries the more likely that gross trade statistics underestimate the relationship Change in trade shares based on Value-dded in United States 10 8 Exports Imports TWN KOR PHL JPN MYS US TH SU RUS EU27 IDN TUR RG R IND CHN ZF VNM ISR KHM CN MEX

16 PHL TWN TH MYS JPN KOR ISR US US RUS EU27 ZF IND IDN CN VNM MEX TUR CHN KHM CHL RG Exports Imports OECD Trade and griculture Directorate 31 5: INCRESING THE LUMINOSITY WHT SSUMPTIONS RE USED TO CRETE TIV ND WHT S NEEDED TO IMPROVE QULITY: CHLLENGES FOR NTIONL STTISTICS 32 16

17 33 Whilst there are limitations to the widespread calculation of trade in value-added data, the OECD-WTO initiative is to be applauded for providing a more revealing look into global trade and integration and for paving the way for further development in this area

18 ut it is important to stress That this is a work in progress and that results are estimates (with two key assumptions) ut they are robust enough to already begin to highlight the need for policies to account for GVCs ut perhaps more importantly, they highlight the importance of capacity building and better statistics Improving data quality is essential Coherent estimates of trade in goods and services new approach to Supply-Use Tables? With a focus on stages and trade rather than industries, per se, to better reflect firm heterogeneity (particularly MNEs). Import/export intensities, factoryless firms, processors, ownership 35 What can be done now? Improved GROSS trade data Import flow matrices etter bilateral trade statistics (integrated with SU tables) and globally consistent Intelligent confidentiality rules (suppress 6 digit not 2 digit HS) Re-export data Second hand goods, scrap and waste. SERVICES EOPS

19 Examples of current inconsistencies in bilateral trade statistics (Services 2009) 37 What else can be done..now? Capitalise on existing data to create new indicators on exporting and importing firms eyond TEC: Linking trade registers, business registers and SS OECD Workshop on linking business and trade statistics: October 2012 Exploring feasibility of creating new indicators based on export (and import) intensities, ownership and size. nd also provides stepping stone for trade in income related to investment Changes to classification systems to better reflect globalisation: Factoryless producers (UNECE Task Force on Global Production) 38 19

20 6.1 GOING EYOND TIV STGES ND TSKS 39 Extensions Trade in jobs and skills ut requires Coherent employment and value-added data lso important for productivity estimates nd significant improvement in skills data (and occupations) 40 20

21 Jobs in the business sector sustained by foreign final demand, 1995 and GOING EYOND TIV INVESTMENT 42 21

22 Extensions Trade in Income related to Investment: Ownership matters: ecause value added does not always stick (compensation for use of knowledge based assets where increasingly registration is determined by tax environment) nd because flows for use of IPPs are often recorded as property income and not trade in services. 30% of total business sector V in 2009 in the UK generated by foreign owned firms, 15% of GDP. ccounting for the underlying flows could further change trade relationships, even though differences between GNI and GDP are small. In Japan for example Primary income flows (GNI minus GDP) were equivalent to about one-quarter of total TiV flows. Need better FTS data, particularly on value-added and employment. MSITS 2010 Compilers Guide 43 How important is it? Potentially Very Trade in Income? bout 70% of China s gross exports made by foreign affiliates E.g. between 1995 and 2007, Japanese foreign affiliates increased their employment in China eightfold from just over 100,000 employees to over 1000,0000 and by 300,000 (to over 400,000) in Thailand, with similar patterns in other SEN countries, such as the Philippines, Malaysia and Indonesia. nd Japan's primary income trade surplus increased by around $100 billion over the period to 2009, more than offsetting the $50 billion reduction in its gross trade surplus over the same period

23 Chinese High Tech Exports by Ownership (% of the total) 100% 90% 80% Others 70% 60% 50% 40% 30% Foreign wholly owned companies Sino-Foreign Joint Ventures Chinese State Owned 20% 10% 0% Share of national value added under control of foreign affiliates, 2010 OECD Trade and griculture Directorate 46 23

24 Share of national employment under control of foreign affiliates, 2010 OECD Trade and griculture Directorate 47 Summary What s needed New thinking on SU tables etter gross trade data Links to microdata Income, Ownership and FTS 48 24

25 Further information Video: ayer_embedded&v=rzkx-0sk41u OECD Workshop on Measuring TiV 5-6 December