Industry and globalisation

Trade in Value Added

 

Introduction

The goods and services we buy are composed of inputs from various countries around the world. However, the flows of goods and services within these global production chains are not always reflected in conventional measures of international trade.

The joint OECD – WTO Trade in Value-Added (TiVA) initiative addresses this issue by considering the value added by each country in the production of goods and services that are consumed worldwide. TiVA indicators are designed to better inform policy makers by providing new insights into the commercial relations between nations.

Remarks on TiVA at the Istanbul G20 Trade Ministers meeting6 October 2015.

 

 

2016 Edition of TiVA indicators (1995-2011)

The 2016 edition of the TiVA database provides indicators for 63 economies covering OECD, EU28, G20, most East and South-east Asian economies and a selection of South American countries. 34 unique industrial sectors are represented, including 16 manufacturing and 14 services sectors, as well as related aggregates (such as total manufactures and total services). This edition is a "light" update of the 2015 version introducing two new countries, Morocco and Peru. Indicators are now provided for all years from 1995 to 2011.The industry list remains unchanged.

The indicators presented in the TiVA database provide insights into:

  • Domestic and foreign value added content of gross exports by exporting industry
  • Services content of gross exports by exporting industry, by type of service and value added origin
  • Participation in GVCs via intermediate imports embodied in exports (backward linkages) and domestic value added in partners’ exports (forward linkages)
  • 'Global orientation' of industrial activity i.e. share of industry valued added that meets foreign final demand
  • Country and industry origins of value added in final demand, including the origin of value added in final consumption (by households and government) and in GFCF (investment by businesses)
  • Bilateral trade relationships based on flows of value added embodied in domestic final demand
  • Inter-regional and intra-regional relationships
  • Domestic value added content of imports (NEW)

ACCESS TO THE TIVA DATABASE (OECD.STAT)

MORE INFORMATION

The underlying Inter-Country Input-Output (ICIO) tables, used to derive the TiVA indicators, are available for downloading (zipped csv) at: oe.cd/icio.

Development of these TiVA indicators has greatly benefitted from other related initiatives such as work undertaken for the European Commission’s FP7 WIOD project and by researchers at  US ITC and IDE JETRO, Japan.

TiVA and GVCs: Country Statistical Profiles (WTO)

TiVA: Country Notes of the 2015 edition

Extending TiVA indicators to more recent years

 Nowcasts to 2014 forthcoming

 

Further development of TiVA indicators and underlying Inter-Country Input-Output (ICIO) Tables

During 2017, the OECD will work extensively on constructing a new version of the ICIO (and TiVA indicators) drawing on statistics compiled according to the most recent international standards; notably the 2008 System of National Accounts (SNA08) and the ISIC Rev.4 industry classification. The core target years will be 2010 to 2014, although the feasibility of extending back to 2008 or 2005 will be explored. New nowcasting methods will be applied to extend TiVA indicators to later years.

 

GVCs and going beyond TiVA

The OECD is carrying out a broad range of work to help policy makers understand the effects of Global Value Chains (GVCs). Addressing trade policy, investment policy, policies for development and a range of other domestic policies, the analyses aim at determining how economies can best draw benefits from engagement in global value chains: oe.cd/gvc.

The development of an Inter-Country Input-Output (ICIO) system lends itself to the calculation of indicators to provide insights into other important areas affected by economic globalisation. These include Trade in jobs and skills, e.g. how many and what type of jobs are sustained by foreign final demand: oe.cd/io-emp. The ICIO, in conjunction with emissions data, also allows the calculation of estimates of Trade in embodied carbon to highlight where CO2 is ultimately being consumed rather than produced: oe.cd/io-co2.

In addition, the OECD is improving the accounting frameworks and content of national input-output and supply use tables so that the current ICIO, used in producing TiVA estimates, can be further developed to address a range of additional policy concerns, including: 

  • Trade and Investment: how income (profits) generated from international trade, in particular income generated via knowledge based assets, is further distributed between affiliates of multinational enterprises (MNEs): oe.cd/tiva-fdi.
  • Trade and SMEs: to better understand the channels used by SMEs to integrate within GVCs. Gross trade data understate the importance of SMEs in GVCs but they play an important role as upstream suppliers to larger, exporting,  firms : www.oecd.org/std/its/enterprises-in-global-value-chains.htm.

The OECD Expert Group on Extended Supply Use Tables was created recently to develop new accounting frameworks and best practices for their implementation and use (see Terms of Reference). The Group is leading international efforts to develop national tables that better differentiate between firms’ involvement in GVCs. For example, accounting for heterogeneity by distinguishing between exporting and non-exporting firms in a manner similar to that developed for China and Mexico in the current ICIO.

In addition, the OECD and WTO are developing partnerships with regional agencies to assist in the expansion of TiVA indicators to other countries – at present these include APEC, UNESCWA, UNECA and Eurostat. In the meantime, the information required for a country to be integrated into the ICIO, and hence the TiVA database, is outlined in a simple guide: www.oecd.org/sti/ind/tiva/TiVA_National_Data_Requirements.pdf.

 

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