Asia and Global Production Networks
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Asia and Global Production Networks

Implications for Trade, Incomes and Economic Vulnerability

Edited by Benno Ferrarini and David Hummels

This timely book deploys new tools and measures to understand how global production networks change the nature of global economic interdependence, and how that in turn changes our understanding of which policies are appropriate in this new environment. Bringing to bear an array of the latest methods and data to study global value chains, this unique book assesses the evolution of global value chains at the firm level, and how this affects competitiveness in Asia.
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Chapter 9: Mapping global value chains and measuring trade in tasks

Hubert Escaith


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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