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MINISTRY of ECONOMYMINISTRY of ECONOMY
GLOBALIZATION & FOREIGN TRADE
SEPTEMBER 2013SEPTEMBER 2013Rahmet USLURahmet USLU
Gülçinay MUMCUGülçinay MUMCU
A- GLOBALIZATION & TRADE IN VALUE ADDEDA- GLOBALIZATION & TRADE IN VALUE ADDED
B- IMPORTANCE OF TRADE IN SERVICES STATISTICSB- IMPORTANCE OF TRADE IN SERVICES STATISTICS
OUTLINEOUTLINE
SeptemberSeptember 2013 Ministry of Economy 2013 Ministry of Economy 22
A- GLOBALIZATION & TRADE IN VALUE A- GLOBALIZATION & TRADE IN VALUE ADDEDADDED
33SeptemberSeptember 2013 Ministry of Economy 2013 Ministry of Economy
• With globalization, global value chains (GVCs) have become a dominant feature of today’s global economy.
• The (growing) process of international fragmentation, challenges our conventional wisdom on how we look at and interpret trade.
• Measuring Trade in Value Added is important for understanding the supply side of trade and identifying the sources of competitiveness.
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Trade in Value AddedTrade in Value Added
SeptemberSeptember 2013 Ministry of Economy 2013 Ministry of Economy
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Trade in Value AddedTrade in Value Added
• Globalisation of production necessitates new trade statistics due to the fact that current trade statistics may lead to misguided decisions.
• The (last) exporter country which makes only assembly can be awarded wrongly as if it produces the full commercial value.
• In response, international institutions carry out studies to develop a database of Trade in Value-Added indicators.
SeptemberSeptember 2013 Ministry of Economy 2013 Ministry of Economy
• “Trade in Value Added” and “Double Counting”
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Trade in Value AddedTrade in Value Added
SeptemberSeptember 2013 Ministry of Economy 2013 Ministry of Economy
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Trade in Value AddedTrade in Value Added
Country Components Manufacturers Costs
Chinese Taipei Touch screen, camera Largan Precision, Wintek 20.75$
GermanyBaseband, power management, transceiver
Dialog, Infineon 16.08$
KoreaApplications processor, display, DRAM memory
LG, Samsung 80.05$
United StatesAudio codec, connectivity, GPS, memory, touchscreen controller
Broadcom, Cirrus Logic, Intel, Skyworks, Texas Instruments, TriQuint
22.88$
Other Other Misc. 47.75$
Total 187.51$
• Apple’s Example
Source: Trade İn Value-added: Concepts, Methodologies And Challenges (Joınt OECD-WTO NOTE)
SeptemberSeptember 2013 Ministry of Economy 2013 Ministry of Economy
• The indicators of trade in value-added are derived from input-output tables.
• There are many ongoing works which are carried out by international institutions in the measurement of trade in value-added.
• One of them is the joint OECD-WTO Trade in Value Added initiative.
• The recent Trade in Value Added database was released in May 2013.
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Trade in Value AddedTrade in Value Added
SeptemberSeptember 2013 Ministry of Economy 2013 Ministry of Economy
• Trade in Value-Added (TiVA) indicators include:Decomposition of gross exports by industry
into their domestic and foreign contentThe services content of gross exports by
exporting industry (broken down by foreign/domestic origin)
Bilateral trade balances based on flows of value added embodied in domestic final demand
Intermediate imports embodied in exports9
Trade in Value AddedTrade in Value Added
SeptemberSeptember 2013 Ministry of Economy 2013 Ministry of Economy
• In Turkey, the latest input-output tables were published in 2002.
• Keeping the input-output tables up to date is essential.
• In addition frequent revision is necessary.
Trade in Value AddedTrade in Value Added
10SeptemberSeptember 2013 Ministry of Economy 2013 Ministry of Economy
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Trade in Value AddedTrade in Value Added
• Turkish Statistical Institute (TurkStat) has been trying to develop statistics for 2012 through questionnaire.
• A method is needed for providing continuity and keeping the data updated.
• A method that will allow the data to be collected in one repository and will ensure data flow continously.
SeptemberSeptember 2013 Ministry of Economy 2013 Ministry of Economy
B- IMPORTANCE OF TRADE IN SERVICES B- IMPORTANCE OF TRADE IN SERVICES STATISTICSSTATISTICS
1212SeptemberSeptember 2013 Ministry of Economy 2013 Ministry of Economy
Turkey's Services TradeTurkey's Services Trade2012 SERVICE EXPORTS
SeptemberSeptember 2013 Ministry of Economy 2013 Ministry of Economy 1313
Turkey's Services TradeTurkey's Services Trade
Turkey's Share in Global Services Exports (%)Turkey's Share in Global Services Exports (%)
Source: WTO
SeptemberSeptember 2013 Ministry of Economy 2013 Ministry of Economy 1414
Turkey’s Services TradeTurkey’s Services Trade
Travel •25.6 billion dollars of revenue in 2012. •6th in the world in terms of revenue•Regarding number of visitors;
6 th in the World and 4 th in Europe (2011 and 2012)•Tourism growth in 2000-2012 period;
Turkey: %11,4
Construction•2nd in terms of the number of top constructing companies (ENR)•According to CB 1 billion dollars of revenue on average•7th in the world in terms of revenues
SeptemberSeptember 2013 Ministry of Economy 2013 Ministry of Economy 1515
Turkey’s Services TradeTurkey’s Services Trade
1616
Logistics•Europe’s biggest truck fleet (45000 trucks /1400 companies)•25. Biggest flight fleet in the world (1 million flight in 2011 / 460.000 international)•Privatization of railway transportation services and the high-speed railway projects are carried out rapidly. So we expect increase in exports of rail transportation services.•11th in the world in terms of receipts
Telecommunications•500 million dollars of revenue•12th in the world in terms of 2012 receipts
SeptemberSeptember 2013 Ministry of Economy 2013 Ministry of Economy
Why Trade in Services Statistics Matter?Why Trade in Services Statistics Matter?
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GATS•Follow-up of Uruguay Round commitments •Progressive liberalization principle•Request-offer procedures, bilateral& plurilateral negotiations•Statistics are of crucial importance in order to submit requests to Members or assess the requests meaningfully
TISA (Trade in Services Agreement)&FTA’s (Free Trade Agreements)• Demise of the Doha Round Negotiations•Start of a comprehensive TISA agreements among 23 countries• More comprehensive FTA’s covering “trade in services” , “investment” , “government procurement”•Bilateral trade in services statistics are vital to undertake negotiations. (Going to the market without knowing how much you have in your pocket)SeptemberSeptember 2013 Ministry of Economy 2013 Ministry of Economy
Why Trade in Services Statistics Matter?Why Trade in Services Statistics Matter?
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High-Level Bilateral Meetings (JETCO etc.)•Without “trade in services data” agenda is missing •Service exporters only react (give feedback) when there is serious problems•High-level contacts are chosen according to sub-sectors traded• Increasing trade in services volume with regional trading partners
SeptemberSeptember 2013 Ministry of Economy 2013 Ministry of Economy
Why Trade in Services Statistics Matter?Why Trade in Services Statistics Matter?
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Policy Making “Trade in Services Agenda”•No single institution responsible for “trade in services” before 2011 Public Administration Reform Package•By 8 June 2011, Ministry of Economy is assigned for legislative arrangements and implementation of them regarding “trade in services”•Policy making is sensitive both to sectors (even sub-sectors) and to countries.•There is an increasing need for sectoral and country-based statistics
SeptemberSeptember 2013 Ministry of Economy 2013 Ministry of Economy
Why Trade in Services Statistics Matter?Why Trade in Services Statistics Matter?
2020
BOP approach and Current Account Deficit (CAD)• High “net errors and omissions” (some of which may have arised from missing “trade in services” data)•CAD is one of the most important macroeconomic indicators •Turkey has a significant trade volume and needs more accurate data to manage current account particularly “trade in services” operations
Obligations arising from EU Acquis• Turkey has started accession negotiations in 2005• EC directive 184/2005 on community statistics concerning balance of payments•ITS must be compiled with wide sectoral coverage and with enough geographical breakdown
SeptemberSeptember 2013 Ministry of Economy 2013 Ministry of Economy
What Are The Recent Problems?What Are The Recent Problems?
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1) Developing bilateral statistics (compilation of trade in services statistics by trade partners)
2) Increasing the level of detail of existing data on trade in services (specifically construction and transportation)
3) Compilation of detailed sectoral statistics (such as, computer related, audio-visual, health and related, professional and education services sub-sectors)
SeptemberSeptember 2013 Ministry of Economy 2013 Ministry of Economy
Trade in Value AddedTrade in Value Added
References•OECD, Trade Policy Implications of Global Value Chains, http://www.oecd.org/sti/ind/Trade_Policy_Implicatipns_May_2013.pdf•OECD-WTO, Trade In Value-Added: Concepts, Methodologies And Challenges (Joint OECD-WTO Note) https://www.google.com.tr/search?q=a+set+of+international+input-output+tables+with+bilateral+trade+links&rlz=1C1GTPM_trTR528TR528&oq=a• OECD-WTO Database on Trade in Value-Added, http://www.wto.org/english/res_e/statis_e/miwi_e/tradedataday13_e/oecdbrochurejanv13_e.pdf
22SeptemberSeptember 2013 Ministry of Economy 2013 Ministry of Economy
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