Consulting

Added value of foreign trade receives new database

The standard form of foreign trade balance is facing criticism. The allegation is that the actual added value will no longer be mapped if the flow of goods and services is viewed as a whole each time it crosses a border. A method that takes the criticism into account will be applied in a database shared by the "club of the industrialized nations", the OECD and the World Trade Organization, WTO. This will compile only the added value that a country adds to an export product or to a particular service aimed at the external market.

 

At the launch of the database on 16.01.2013, in Paris, OECD General Secretary Angel Gurria explained: "The export success of various countries around the world depends on their ability and their willingness to purchase." He continued: "Through our collaboration with the WTO, we now see more clearly than before how severely the blocking of imports affects the ability of a country to compete. Negotiations must take new circumstances into account and in this regard, countries must help their companies to better establish themselves within the international value chain.

The new database has been stocked with the OECD's global In-Output tables, which describe the relations between industry and consumers in 40 countries. Even though the addition of new data is to continue, Germany can already report findings. Thanks to the new method, it is evident that Germany's manufacturing industry draws to a much greater extent on preliminary and intermediate products compared to other major EU countries. Thus, around one third of the value exported by German vehicle manufacturers originates from another country.

The proportion of service provision in the German export market also turns out to be considerably higher than when observing the trade flow using traditional methods. Thus in reality, service provision accounts for around half of the gross export value of industrial goods exports. In other words, as a result of the new system, it is clear for the first time that the services sector contributes to the added value of industrial goods to a much greater extent than previously thought.

 

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