Brussels, 22/01/2013 (Agence Europe) - The World Trade Organisation (WTO) and the Organisation for Economic Cooperation and Development (OECD) are creating a new statistical instrument to better assess the added value of goods and services exported.
On 16 January, in Paris, WTO Director General Pascal Lamy and OECD Secretary General Angel Gurria published a new method for measuring trade which takes into account the reality of globalisation in international trade. This new method of calculating trade by taking account of added value “breaks with conventional measurements of trade, which record gross flows of goods and services each time they cross borders. It seeks instead to analyse the value added by a country in the production of any good or service that is then exported and offers a fuller picture of commercial relations between nations”, the two institutions underline in a press release.
As Gurria explained to the press on 16 January, a good produced in the EU and exported to the United States can include components from China and Japan, which in turn use raw materials and services from Australia, Russia or India. Products are henceforth “made in the world” and no longer “made in France, made in USA or made in China”, Lamy said.
From the main lessons to be drawn from this first study, to be completed in still greater detail in the next few months, the WTO and the OECD already make several interesting conclusions. For example, China's bilateral trade surplus with the United States is below 25% when it is calculated in added value, a difference that can be explained by the high local content of Chinese exports. Other examples are: one third of the total value of motor vehicles exported from Germany actually comes from other countries, while nearly 40% of the total value of Chinese electronics exports comes from foreign sources.
This new method also highlights the fact that services have almost doubled in importance, although representing only 20% of global trade in traditional methods of calculation. Finally, bilateral trade surpluses of major commodity exporters like Australia, Brazil and Canada with their key trading partners shrink on a value-added basis, as their raw materials are further processed by trading partners and then re-exported, highlighting where these countries might move up the value chain.
Addressing the French parliament on 16 January, in the wake of the joint OECD and WTO press conference attended by the trade commissioner alongside Gurria and Lamy, Karel De Gucht said (our translation): “There is a difference between trade and exports, the made in France does not correspond to the reality on the ground (…). To export we need to import”. “This method is based on added value, not on the finished product. (…) That enhances intellectual property”, he went on to argue, not displeased with the fact that these statistics are more favourable to Europe as they considerably change the balance of its trade with Asia. (EH/transl.jl)