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TRADE IN VALUE ADDED (TIVA)
AND STEEL
Norihiko Yamano and Ali Alsamawi OECD Directorate for Science, Technology and Innovation OECD Steel Committee the 82nd session 23-24 March 2017
An Alternative view of trade relationships across countries ...
… measuring international flows of value added and providing new insights into:
• Global interconnectedness
• Direct and indirect economic effects of trade
http://oe.cd/tiva
What is TiVA?
2
• Foreign value added content of gross exports i.e. backward linkages in GVCs to upstream countries, and their industries
• Domestic value added content of foreign exports i.e. forward linkages in GVCs to downstream countries
• Distribution of services value added embodied in gross exports of manufactured goods
• Decomposition of gross exports (value added of exporting industry, indirect impacts from other domestic industries, foreign value added)
• Country and industry origin of value added in final demand goods and services
3
Examples of TiVA indicators
• The core of TiVA project is construction of an Inter-Country Input-Output model (ICIO)
• 63 individual countries/economies + rest of the world (covering OECD, EU, G2o, S.E. Asia)
• 34 industries • of which: 16 manufacturing sectors including “Basic Metals”
• Heterogeneity within industry • Processing firms (China) , Global manufacturing (Mexico)
Coverage
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• Extended ICIO
– Split the Basic metals manufacturing activity into Iron and steel and Non-ferrous metals (“S-extended ICIO 2016”)
• Jobs and compensation of employees (labour income) embodied in foreign value added
• New indicators
– Intermediate exports by final destination
– Value added sources of imported products
5
Extended analysis in 2016/2017
• Basic metals (2-digit industry level)
– Iron, crude steel and steel products
– Non-ferrous metals
• Simplified methodology rather than preferred option of full-scale update of Inter-Country Input-Output (ICIO) tables
6
Splitting aggregate industries
Input-Output and Supply and use tables 7-12 countries
National Accounts and Business statistics 41-58 countries
Bilateral trade in goods statistics 55-60 countries
Other industry specific data Crude steel production (World Steel Association)
47 – 49 countries
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Data sources for splitting Basic Metals
Production networks
Steel plates and sheets
Metal
products
Consumers
Business
services
Pig iron and crude steel
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Backw
ard
Mining Coke Electricity
Forw
ard
Machinery Construction Transportation
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Domestic Value Added share of unit iron
and steel production/exports (2000-2011)
Source: OECD (2016) S-Extended ICIO
30%
40%
50%
60%
70%
80%
90%
100%2000 2011
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Intermediate exports of basic metals by destination
region bloc
CAN NAFTA EU28
S.Amr
ASEAN
RoW
ITA EU28 Asia
N.Amr
RoW
JPN Other Asia EU28
N.Amr
RoW
• Increased foreign dependency – Domestic VA sustained by foreign demand; and
exports per total VA
– Foreign contents in steel production
• Steel industry has relatively high foreign content and is more dependent on foreign economic demand than other material manufacturing goods
• Further extensions to enhance quality of ICIO-based analysis: – disaggregate the mining sector
– increase country coverage
– nowcasting (more recent years)
11
Summary
THANK YOU More information at
http://oe.cd/tiva http://oe.cd/i-o
Appendix:
Industry list (S-extended ICIO2016)
Agriculture, Mining Agriculture [01,05], Mining [10,14]
Manufacturing Food products [15,16],
Textiles & apparel[17,19]
Wood [20]
Paper print publishing [21,22]
Coke, petroleum[23]
Chemicals[24]
Rubber & plastics[25]
Non-metallic minerals[26]
Iron and steel[271]
Non-ferrous[272]
Fabricated metals[28]
Machinery [29]
ICT & electronics [30,32,33]
Electrical machinery [31]
Motor vehicles [34]
Other transport equipment [35]
Other manufacturing [36,37]
Utility and
Construction
Utilities [40T41], Construction [45]
Business services Wholesale & retail [50,52]
Hotels & restaurants [55]
Transport & storage [60-63]
Post & telecoms [64]
Finance & insurance [65-67]
Real estate [70]
Renting of machinery [71]
IT services [72]
Other business services [73,74]
Other services Public admin [75];
Education [80];
Health [85];
Other services [90-93];
Private households [95]
[ISIC Rev.3 code]
