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Trade in Value Added: Developing New Measures of Cross-Border Trade

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Editor(s): Aaditya Mattoo , Zhi Wang , Shang-Jin Wei

Publication Date: 16 April 2013

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http://www.cepr.org/pubs/books/P247.asp

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Summary: Labels can be deceptive. “Made in Country X” means little when a product is made of parts from different countries. Indeed, trade in intermediate products has exploded and is now as much as three-quarters of all world trade. But standard trade statistics still measure international trade in gross value terms. Trade economists and
policymakers increasingly recognise the need to measure trade in value added terms and to understand the structure of global value chains which lies behind gross trade statistics.
In this volume, we take stock of these developments based on a body of active
and expanding research. First, we explore the implications for economic policies –
affecting trade, employment, growth and the environment – of the fact that much of
the value added in a country’s exports is likely to come from other countries. Second,
we examine several approaches to estimating domestic and foreign value added in
a country’s exports (and imports). Third, we propose modifications in national and
international statistical infrastructure to better measure trade in value added.
In this evolving field, the volume will provide a framework to compare existing
approaches and an inspiration for new approaches.

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