Alexander J. Yeats

Just How Big is Global Production Sharing

Sharing different stages of manufacturing between countries is of major and growing importance. But because of previous deficiencies in the Standard International Trade Classification (SITC Revision 1) system, it was not possible to differentiate between the international trade in components and parts and the exchange of fully fabricated manufactured goods. Such a distinction was needed to empirically estimate theamount of global production sharing. Changes in the SITC classification system (Revision 2) now allow one to approximate how much production sharing occurs within the key machinery and transportation equipment (SITC 7) group, which includes about 50 percent of world trade in all manufactures. In 1995, OECD (Organization for Economic Cooperation and Development) exports of parts and components in this group totaled

Production Sharing in East Asia: Who Does What for Whom, and Why?

440 billion, which was about 30 percent of all shipments (components plus assembled goods) of machinery and transportation equipment. Developing countries produced and exported an additional

Major Trade Trends in East Asia: What are Their Implications for Regional Cooperation and Growth?

100 billion of these products -- which indicates global exports exceeded one-half trillion dollars. But the extent of production sharing is clearly greater than these figures indicate, because the SITC Revision 2 system does not allow one to distinguish between components and parts in chemicals or other manufactured goods. The data also show that over the past decade trade in machinery and transport equipment components has grown considerably faster than final stage products in this group. A different form of production sharing involves the use of special tariff provisions for the re-import of domestically produced components that have been assembled abroad. A second data source on this activity indicates that trade in these goods totals about

Open Economies Work Better! Did Africa's Protectionist Policies Cause its Marginalization in World Trade?

100 billion annually, with most of the activity involving the European Union and the United States. (Again, the available data probably understate the importance of this exchange.) Even so, these supplemental statistics illustrate the importance of this activity to some developing countries, as more than 40 percent of manufactured exports from the Dominican Republic, El Salvador, Haiti, Jamaica, and Mexico involve assembly operations using components manufactured abroad.

Export Prospects of Middle Eastern Countries: A Post-Uruguay Round Analysis

The authors analyze empirical information on the nature and magnitude of, and motivation for, international production sharing in East Asia. To do so, they use a largely untapped source of data on inter- and intra-regional trade in parts and components. Some of their findings: East Asian trade in components is considerably greater than often recognized. Regional global exports of parts and components totaled

NAFTA: Its effect on South Asia

178 billion in 1996, and imports of those products about

Tariff valuation bases and trade among developing countries : do developing countries discriminate against their own trade?

12 billion less. Components now constitute one-fifth of East Asian exports of manufactures. Imports of components, measured as a share of all manufactures, are growing considerably faster in East Asia than in OECD Europe or North America. The value of East Asian global imports of components rose more than ninefold over the period 1985-96. Almost three-quarters of all East Asian imports of telecommunications equipment are components for further assembly. East Asian global exports of components grew faster then any other major product group over 1984-96, when their exchange increased 15 percent a year (compared with 11 percent for all products ). Although Japanese exports declined slightly in 1997, shipments from most other East Asian countries increased 9 to 16 percent. Why did production sharing expand? Analyses of traditionally revealed comparative advantage use export statistics to determine whether a country has a comparative advantage in the production of a good. The same indices, calculated using import statistics for components, can show whether a country has a comparative advantage in the assembly of a product. Using statistics on component imports, the authors find that: Japan, Singapore, and Taiwan (China)--which are exiting most assembly operations--increased their specialization in the manufacture of components. Assembly operations, which are labor-intensive, tend to migrate to low-wage East Asian countries. Indonesia, Malaysia, and Thailand have the broadest and most mature assembly capacity for components. But no East Asian country has developed its domestic assembly operations as much as Mexico, which has a comparative advantage in 70 percent of all component groups. Collectively, East Asian countries are strengthening their comparative advantage in the production of components; the results are mixed for assembly operations.

Quantitative Approaches to Trade-Barrier Analysis

This studys empirical findings have positive implications for further efforts to expand East Asian regional trade and cooperation initiatives. Since the mid-1980s regional intra-trade has grown at a rate roughly double that of world trade, and at a rate far higher than the intra-trade of the North America Free Trade Agreement (NAFTA) member countries or the European Union. Evidence based on intra-industry trade ratios or statistics on international production sharing show economic linkages and the interdependence of East Asian economies have considerably strengthened over the past two decades. On a global scale, East Asia (excluding Japan) now originates 19 percent of world trade, which is approximately the same share as the NAFTA member countries.

An analysis of the cause and magnitude of foreign trade zone-induced biases in US import statistics

In the mid-1950s sub-Saharan Africa accounted for 3.1 percent of global exports. By 1990 this share had fallen to 1.2 percent. The authors of this report find that Africas extensive loss of competitiveness played a key role in its decline in world trade. If Africa had merely retained its 1962-64 OECD (Organization for Economic Cooperation and Development) market shares, its exports now would be 75 percent higher. Africas problem was two-pronged: (1) it experienced declining market shares for its major export products, which, in turn, were of declining relative importance in world trade; and (2) it was unable to diversify its export base. Empirical evidence developed by the authors shows that external protection has not played a major role in this decline; in fact, OECD trade preferences gave Africa an advantage over many exporters. Trade restrictions and domestic policy interventions often create a bias against tradables, especially exports, that prevents the achievement of otherwise attainable growth rates. Import barriers in Africa are far higher than in developing countries with faster export growth, and appear to work against potential export products. If the region is to reverse its unfavorable export trends, it must adopt trade and structural adjustment policies that help make it competitive and help African exporters capitalize on foreign trade opportunities.

Policy Issues Involving Nontariff Trade Barriers

Exports in the Middle Eastern countries should increase from