Measuring Trade in Value Added in the New Industrial Economy: Statistical Implications

Abstract

Globalization implies not only an expansion of international markets, but also an increasing vertical integration of industrial production processes. Intermediate products are increasingly offshored within these global value chains, giving place to what is known as "trade in tasks". When the international value chain is spread across a number of countries, it becomes very difficult to measure and locate its various components, blurring the distinction between trade in goods and trade in services. The paper presents some experiences of alternative measures of international trade in terms of the value added content. It also reviews some implications of the reforms of international norms governing the preparation of the Balance of Payments and National Accounts System on the adequate measurement of the global chain of value added generated by intrafirm trade and outsourcing.

Keywords: international trade statistics, vertical integration, international input-out-put analysis, SNA2008

JEL Classification: D57, F17, F23