OECD-WTO Data Indicates Opening Countries' Markets is Key to Boosting Exports
Full integration into global production chains and a willingness to open markets to wider imports are keys to a country's competitiveness and exports, said preliminary international trade data released Jan. 16 by the OECD and the World Trade Organization. The joint report on "Trade in Value-Added Initiative" aims to use the new data base to analyze the value added by a country in the production of any good or service that is then exported.
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"Countries' capacity to sell to the world depends on their ability and readiness to buy from the rest of the world," said OECD Secretary General Angel Gurría said during the launch of the new database in Paris. "Trade negotiations have to catch up to these new realities."
Some of the findings include:
- China's trade surplus with the U.S. shrinks by 25% on a value-added basis, reflecting the high level of foreign-sourced content in Chinese exports.
- One-third of the value of motor vehicles exported from Germany actually comes from other countries, and nearly 40% of the total value of China's electronics exports come from foreign sources.
- Conventional trade data suggests that services represent less than one-quarter of total trade, but on a value-added basis services trade reaches an average 50% of OECD countries' exports.
- Trade surpluses of major commodity exporters like Australia, Brazil and Canada shrink on a value-added basis, as their raw materials are further processed by trading partners and then re-exported.