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30 May, 2013

New OECD Analysis Highlights Importance of Services to Global Trade


OECD – Paris, 29 May 2013 – New trade data measured in value-added terms shows that services – such as logistics, design, and transportation – are far more important to global commerce than they appear in traditional calculations of exports and imports.

OECD data shows that services represented 24% of total gross trade in 2009 in the 57 economies analysed. But if measured according to the value added each time a service was exported or imported within a global production chain, their share of overall trade is significantly higher at 43%.

The findings emerge from pioneering work by the OECD and WTO to provide a better picture of the flows of goods and services within today’s globalised value chains.

The latest data from the OECD/WTO Trade in Value-Added (TiVA) database increases the number of economies analysed and provides statistics over a longer timeframe than in the initial findings released in January 2013. They also reinforce how crucial imports are for an economy to be a successful exporter, and demonstrate the increasing pace of globalisation over the last two decades.

The estimates show that the foreign content of exports has increased significantly in many economies, as they seek competitive advantages through access to cheap and efficient imports and by specialising in specific parts of the value chain. Foreign content in the exports of the Czech and Republic, Hungary and Slovakia, for instance, rose markedly from the mid 1990s to reach around 40% by 2009, reflecting, in part, their specialisation in stages of the automotive and electronic production chains of German companies. Similar changes also occurred in Asian manufacturing. The foreign content of exports trebled in China and doubled in Korea and Japan.

Services represent more than half of total exports from the US, Britain, France, Germany and Italy and nearly one-third from China. Even in manufactured goods, the contribution of services rose by between 5% and 10% between 1995 and 2009 in many economies, to reach one-third on average in the economies analysed.

Nearly half of all the value that was added by French industries in producing transport equipment originated in the service sector in 2009, up from one-third in 1995, according to the new analysis.

The OECD argues that reducing the many barriers to the import and export of services will boost global trade, spur economic growth and create jobs.

The new indicators of trade in value-added are derived from global input-output tables, developed by the OECD, which describe interactions between industries and consumers.  For more information on the methodology behind the TIVA database, indicators and future plans, as well as country notes see: www.oecd.org/trade/valueadded.