Towards Measuring Trade in Value-Added and Other Indicators of Global Value Chains: Current OECD work using I-O tables

Transcription

1 Towards Measuring Trade in Value-Added and Other Indicators of Global Value Chains: Current OECD work using I-O tables Sébastien Miroudot and Norihiko Yamano (OECD) The Fragmentation of Global Production and Trade in Value-Added Developing new measures of cross-border trade World Bank, Washington DC, 9-10 June 2011

2 Outline of the presentation 1. Concepts: trade in tasks, fragmentation of production and global value chains 2. Measurement: from case studies to global input-output analysis 3. OECD approach 4. What indicators do we need? 5. Concluding remarks

3 Trade in tasks: deepening division of labour

4 Fragmentation of production: the Boeing 787 Dreamliner Wing box: Mitsubishi Heavy Industries (Japan) Wing ice protection: GKN Aerospace (UK) Vertical Stabiliser: Boeing Commercial Airplanes (USA) Centre fuselage: Alenia Aeronautica (Italy) Rear fuselage: Boeing South Carolina (USA) Lavatories: Jamco (Japan) Doors & windows: Zodiac Aerospace (USA) PPG Aerospace (USA) Forward fuselage: Kawasaki Heavy Industries (Japan) Spirit Aerosystems (USA) Escape slides: Air Cruisers (USA) Flight deck seats: Ipeco (UK) Raked wing tips: Korean Airlines Aerospace division (Korea) Horizontal Stabiliser: Alenia Aeronautica (Italy) Aux. power unit: Hamilton Sundstrand (USA) Centre wing box: Fuji Heavy Industries (Japan) Engines: GE Engines (USA), Rolls Royce (UK) Flight deck controls: Esterline (USA), Moog (USA) Engine nacelles: Goodrich (USA) Passenger doors: Latécoère Aéroservices (France) Cargo doors: Saab (Sweden) Prepreg composites: Toray (Japan) Landing gear: Messier-Dowti (France) Electric brakes: Messier-Bugatti (France) Tires: Bridgestone Tires (Japan) Source: Tools/Software: Dassault Systemes (France) Navigation: Honeywell (USA) Pilot control system: Rockwell Colins (USA) Wiring: Safran (France) Final assembly: Boeing Commercial Airplanes (USA)

5 Global value chains: offshore services (Gereffi, 2010)

6 Measurement Three issues with traditional trade statistics: 1. Implicit multiple counting of intermediate goods and services 2. Tends to hide the actual patterns of trade 3. Incomplete picture as knowledge and income flows are not measured Pascal Lamy: the statistical bias created by attributing commercial value to the last country of origin perverts the true economic dimension of bilateral trade imbalances. This affects the political debate, and leads to misguided perceptions.

7 The case study approach iphone 4: main component suppliers Country Components Manufacturers Costs Chinese Taipei Touch screen, camera Largan Precision, Wintek $ Germany Baseband, power management, transceiver Dialog, Infineon $ Korea United States Applications processor, display, DRAM memory Audio codec, connectivity, GPS, memory, touchscreen controller LG, Samsung $ Broadcom, Cirrus Logic, Intel, Skyworks, Texas Instruments, TriQuint Other Other Misc. $ Total $ $ But who are the suppliers of the suppliers? Source: isuppli, Chipworks

8 The iphone example revisited 10 million units exported from China to the US Components TWN USA Final good 1,875 CHN Assembly ROW DEU KOR? Upstream input suppliers US trade balance CHN TWN DEU KOR ROW World Gross -1, ,646 Value added ,646 The analysis takes only into account the direct suppliers of the Chinese assembler

9 Global input-output analysis Conceptually, it is possible to decompose any particular product with value V p into the value-added generated in country i such that the total value of V p i VA This is relatively clear and simple. However complications can arise when aggregating up for a whole industry group or for a whole economy. The calculation requires a global inputoutput table. p i

10 Decomposition of the value of exports (1) For any given export by an industry, it should be possible to decompose the entire value into: the domestic value-added generated in its production, both directly from the main producing industry, and indirectly via transactions between domestic industries and via transactions between domestic and foreign industries; and the imported value-added generated in producing the imports used in production (not including any part of the import value that reflects domestic value-added)

11 Decomposition of the value of exports (2) A global input-output table should allow users and policy makers to decompose the entire value of any good in the following way: Direct domestic value-added from the final producer Single value/percentage Indirect domestic valueadded by producing industry Column of values/percentages Indirect imported valueadded by producing country and industry Matrix of values/percentages

12 Our measuring approach Harmonized indicators across countries Maximum use of existing statistics Statistical challenges and technical details Session V Sustainability

13 OECD tools OECD Input-Output data Symmetric industry by industry I/O tables (with separate tables for domestic flows and imports). Data are available for OECD and major non-oecd economies (44 countries representing more than 95% of world GDP) and cover the years 1995, 2000 and Bilateral trade by industry and end-use Building sustainable process for regular updates using BEC method (BEC = Classification by Broad Economic Categories) Conversions from all revisions of HS (88, 96, 02, 07) to both BEC and ISIC have been developed. Other industrial database (National account, STAN) Inter-country inter-industry model of 50 countries for 1995/2000/2005. Any regional aggregations (EU15, EU27, ASEAN, NAFTA, etc)

14 Measurement examples Import contents of exports (2005) 20% 18% 16% 14% 12% 10% 8% ICE 6% 4% 2% 0% JPN EU15 USA CHN Other OECD BRIIS RoW Data requirement: National or region aggregate I-O (domestic and import matrices)

15 20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% Import content of exports by sourcing country JPN EU15 USA CHN Other OECD BRIIS RoW RoW BRIIS Other OECD CHN USA EU15 Data requirement: National I-O (domestic and import matrices) Bilateral import coefficient in goods and services JPN

16 Direct and induced trade flows 20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% JPN EU15 USA CHN Other OECD BRIIS RoW indirect ICE Data requirement: National I-O (domestic and import matrices) Bilateral mirror trade coefficient

17 Other analytical choices for measuring trade in value-added Identify the key sectors and key trade linkages Decomposition of economic effects by sector and export types (intermediate / final) Structural decomposition analysis Average propagation link Field of influence

18 OECD project on the measurement of trade in value-added OECD project: Improving the coverage of input-output tables Improving the quality of assumptions used to allocate imports to users: By constructing bilateral trade data by end-use By disaggregating industries into sub-groups categorised by export and import intensity Investigation into the feasibility of tracking income flows

19 Concluding remarks Major challenge is presenting results that can be easily understood and interpreted by non-practitioners of national account and I-O modelling. The assumptions behind inter- country inter-industry modeling (IRIO/MRIO) are complex but this reflects the complexity of international flows of goods and services. The mathematics behind the calculations is relatively straightforward- the major difficulty is populating the various tables (I-O, trade matrixes etc.) with feasible / reliable figures for valid interpretations. However, there are many statistical issues to be considered: nonbenchmark year up to date calculation, mid/long-term effects via capital & labour, inter-country income transfers, etc Co-operation with other organisations and projects share ideas and compare results, minimise duplication of efforts.