Globalization and trade flow

Staff Working Paper ERSD-2010-12

Date: June 2010

World Trade Organization
Economic Research and Statistics Division

Globalization and trade flows: what you see is not what you get!

Andreas Maurer and Christophe Degain WTO Manuscript date: 22 June 2010

Disclaimer: This is a working paper, and hence it represents research in progress. This paper represents the opinions of the authors, and is the product of professional research. It is not meant to represent the position or opinions of the WTO or its Members, nor the official position of any staff members. Any errors are the fault of the authors. Copies of working papers can be requested from the divisional secretariat by writing to: Economic Research and Statistics Division, World Trade Organization, Rue de Lausanne 154, CH 1211 Geneva 21, Switzerland. Please request papers by number and title.

Globalization and trade flows: what you see is not what you get!
Andreas Maurer and Christophe Degain1

Abstract: The trade collapse that followed the recent financial crisis has led to a renewed interest on the measurement issues affecting international merchandise trade statistics in the new globalized economy. The international fragmentation of industrial production blurs the concept of country of origin and calls for the production of new statistics on the domestic content of exports, with a view of estimating trade in value added. Alongside, the international statistical community has revised in 2010 the concepts and definitions on both, international merchandise trade and trade in services statistics. This paper discusses the various issues related to the concepts of "goods for processing" and "intra-firm trade" in trade statistics, and provides an overview of the method of analysing the impact of the fragmentation of production in international value chains.

Keywords:

trade statistics, goods for processing, intra-firm trade, trade in intermediate products, trade in value added

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