Implications for Trade, Incomes and Economic Vulnerability
Edited by Benno Ferrarini and David Hummels
Chapter 9: Mapping global value chains and measuring trade in tasks
Adequately measuring international trade taking place in global value chains (GVCs) and its impact on national economies is still a work in progress. Mapping GVCs, identifying where value-added is created, how much and by whom, are the challenges that trade statisticians face. Within supply chains, many production steps are carried out across different countries, with semi-finished products travelling along the production chain between these countries. Each time these products criss-cross national borders, international transactions are recorded at the full or gross value of the product, which leads to multiple counts. At the end of the supply chain, the parts are assembled for final use and then either consumed domestically or exported. Ordinary concepts of country of origin or country of destination do not fully apply anymore: if we look at the national origin of the value-added incorporated in the final product, we realize that significant shares of the value may come from other countries than from the country of origin as ascribed by customs records. Rising to this statistical challenge and producing the right numbers is important for decision making in today’s world: not only business models and strategies are changing, but also the way public policy makers should understand their “home” country and their defensive and offensive interests in trade policy. The old division of labor between industrialized and developing nations is losing its relevance, even if we are still far from living in the same village.
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