World Economics - Insight , Analysis and Data

World Economics - Insight , Analysis and Data

Revolutionary Trade Database Launched by OECD and WTO

Brian Sturgess, Toni Oki - January 2013

The OECD and the WTO have released an extremely important set of new international trade data which in the long-run may revolutionise the way current trade imbalances are discussed in public narratives. Trade in Value-Added (TiVA) data is a new way of presenting economic reality as it seeks to take into account the increasing dispersion of production chains across the world. Current trade statistics record the gross flow of goods and services each and every time they cross borders; the inaccuracy of this method of measurement is exemplified by the Apple ‘Made in China’ question, where the iPhone is considered to be a Chinese export to the US despite the product being entirely designed and owned by a US company, and being composed largely of parts produced in several Asian and European countries. The TiVA database is an attempt to redress this flaw by measuring only the value added to a product by each country. It thus also better reflects the importance of services in creating goods. Whilst there are, at present, limitations to the widespread calculation of trade in value-added data, this OECD-WTO initiative is to be applauded for providing a more revealing look into global trade and integration, and for paving the way for further development in this area.

The OECD and the WTO have released an extremely important set of new international trade data which in the long-run may revolutionise the way current trade imbalances are discussed in public narratives. The database is a joint initiative between the two organisations to produce statistics on trade in value-added (TiVA) as a supplement to traditional measures of trade that record the gross flow of goods and services each and every time they cross borders.

An analysis of the TiVA dataset challenges much of the conventional wisdom underlying current trade policies, public debate and movements in currency markets. For example, data on the size of the imbalance of trade between China and the US has produced fierce cross-party debates in Congress and in the country at large, leading to accusations of currency manipulation. However, the OECD-WTO data shows that in 2009, China’s bilateral trade surplus with the US was about US$40 billion, or 25% lower, when measured in value-added terms than when measured by traditional statistics. In contrast, Japan’s trade surplus with the US is 60% larger when measured in value-added terms while its trade surplus with China and Korea largely disappears since intermediate exports to Asia end up in...

Already registered:

Email address:
Password:

Register for FREE pre-release data

  • No payment information required.
  • Access to data 1 hour before public release.
  • The Sales Managers' Indexes
    covering all major Asian, African and Latin American emerging markets, plus North America.
  • World Price Index
    PPP exchange rates for the worlds top 10 economies.
  • Regular Key Papers on Economic Data
  • and much more...




© Copyright Economic & Financial Publishing 2014