Universidad Nacional Autnoma de Mxico. Facultad de Economa.

The new structure of international trade: the participation of countries in global value chains.

Leobardo Enrquez Hernndez. Vctor Antonio Romero Ramrez. Itzel Guadalupe Vzquez Lpez.

Aim and introduction.

The aim of this paper is to analyze the participation and position of ten economies in global production chains and global value chains. Global value chains play a major role in the global economy today, the goods and services covered by the trade contain inputs can come from many different countries and traditional trade statistics incur a mistake to attribute the full value transaction of such products to the latest economy that invests in the production process. The various forces that led to the current global trading system mainly: the drastic decreases in the costs of transport communication, technology, low tariffs, abundant labor, capital natural resources, demand growing market for goods and services, to promote and strengthen geopolitical structural trends favoring internationalization of production processes. are and and and the

The interdependence of countries due to trade has increased significantly because most countries imported incorporates parts or services, on the other hand, exports of any country incorporated a higher proportion of value added abroad.
Value chains either intra-firm or inter-regional or global firms, are known as global value chains. Therefore, the global value chains are a set of links or assembly required to generate a product or service activities, from conception to final sale, including recycling of waste after use (Ferrando, 2012 ).

The rate of participation in global value chains allows us to know the extent to which a country's exports are integrated into international networks in international production networks, which gives us an advantage to study the trade and investment relationship. This indicator shows the participation of developing countries in global value chains both upstream and downstream and corrects the limitations of the classic indicators, in which the countries at the top of the chain (upstream), such as commodity exporters have to definition containing low value-added exports abroad.

Countries: Brazil China Germany Britain India Japan Korea Mexico Russia United States
Methodology Using methodologies Dietzembacher, et. al. (2007) and Koopman, et. al. (2011), we proceed in the first case the methodology to calculate Average Propagation Length (APL) and the sectorial composition of the countries within the Global Production Chain (CGP) and in the second case to calculate the matrix exports in value added at the sector and country, using the matrix of bilateral trade WIOD.

After obtaining the direct and indirect production requirements in global trade taking approaches demand and supply , identify with the APL countries and sectors within the CGP analyzing their role in the global production structure for the propagation of effects , differentiating the backward and forward. They are classified by the selected specialization they have had on each stage of production with APL countries. After calculating the matrix of trade in value added , and the array of value-added exports , the share of value added is calculated VAF foreign and domestic VAD incorporated in exports for all countries. Participation VAF and VAD as a percentage of total exports incorporated into value added for selected countries and years is shown. In addition the position of a country is calculated within the CGV ie whether it is upstream or downstream yielding results that specialize in various stages of production , being contracted with APL . In the same countries is possible to perform a sector analysis , on which are the sectors that further incorporate value added domestic ( national integration ) and foreign ( as this sector is linked in world trade ) also locate the position of each sector in the value chain at the sectorial level .

Country participation and positioning in global value chains. Supply chains (production) can be described as a system of value added sources and destinations within a network of globally integrated production . Within a supply chain (production), each producer purchases inputs and then adds value to them, which is included in the cost of the next stage of production. At each stage of the process , intermediate goods cross the international border , the value of trade flow is equal to the aggregate value paid to the factors of production in the exporting country. Furthermore, within global supply chains we can identify links between sectors and intensities or wavelengths to quantify. In this section , the method of propagation medium average length propagation length (APL ) , which is defined as the average number of steps that a stimulus is needed in an area to spread the impact and affect other sectors are presented.

11

12

10

0 Australia Austria Blgica Bulgaria Brasil Canad China Chipre Republica Checa Alemania Dinamarca Espaa Estonia Finlandia Francia Reino Unido Grecia Hungria Indonesia India Irlanda Italia Japn Corea Lituania Luxemburgo Latvia Mxico Malta Holanda Polonia Portugal Rumania Rusia Repblica Eslovaquia Eslovenia Suecia Turqua Taiwan Estados Unidos 0 1 2 3 4 5 6 7 8 9 11 12

B_APL F_APL

Source: Prepared with information matrices WIOD world trade.

Average APLs backward (B) and forward (F) by country in 2011

10

10

0
Agriculture, Hunting, Forestry and Fishing Mining and Quarrying Food, Beverages and Tobacco Textiles and Textile Products Leather, Leather and Footwear Wood and Products of Wood and Cork Pulp, Paper, Paper , Printing and Publishing Coke, Refined Petroleum and Nuclear Fuel Chemicals and Chemical Products Rubber and Plastics Other Non-Metallic Mineral Basic Metals and Fabricated Metal Machinery, Nec Electrical and Optical Equipment Transport Equipment Manufacturing, Nec; Recycling Electricity, Gas and Water Supply Construction Sale, Maintenance and Repair of Motor Vehicles and Motorcycles; Retail Sale of Fuel Wholesale Trade and Commission Trade, Except of Motor Vehicles and Motorcycles Retail Trade, Except of Motor Vehicles and Motorcycles; Repair of Household Goods Hotels and Restaurants Inland Transport Water Transport Air Transport Other Supporting and Auxiliary Transport Activities; Activities of Travel Agencies Post and Telecommunications Financial Intermediation Real Estate Activities Renting of M&Eq and Other Business Activities Public Admin and Defence; Compulsory Social Security Education Health and Social Work Other Community, Social and Personal Services Private Households with Employed Persons

B_APL

Source: Prepared with information matrices WIOD world trade.

Average APLs backward (B) and forward (F) by sector in 2011

F_APL

10

Average APLs backward (B) and forward (F) by sector and selected countries in 2011
Brasil B Agriculture, Hunting, Forestry and Fishing Mining and Quarrying Food, Beverages and Tobacco Textiles and Textile Products Leather, Leather and Footwear Wood and Products of Wood and Cork Pulp, Paper, Paper , Printing and Publishing Coke, Refined Petroleum and Nuclear Fuel Chemicals and Chemical Products Rubber and Plastics Other Non-Metallic Mineral Basic Metals and Fabricated Metal Machinery, Nec Electrical and Optical Equipment Transport Equipment Manufacturing, Nec; Recycling Electricity, Gas and Water Supply Construction Sale, Maintenance and Repair of Motor Vehicles and Motorcycles; Retail Sale of Fuel Wholesale Trade and Commission Trade, Except of Motor Vehicles and Motorcycles Retail Trade, Except of Motor Vehicles and Motorcycles; Repair of Household Goods Hotels and Restaurants Inland Transport Water Transport Air Transport Other Supporting and Auxiliary Transport Activities; Activities of Travel Agencies Post and Telecommunications Financial Intermediation Real Estate Activities Renting of M&Eq and Other Business Activities Public Admin and Defence; Compulsory Social Security Education Health and Social Work Other Community, Social and Personal Services Private Households with Employed Persons F China Alemania Francia Reino Unido B F B F B 2.5 2.8 1.0 2.9 2.2 3.8 1.8 3.2 0.4 2.6 2.5 3.8 6.6 3.1 5.5 4.2 7.2 3.5 2.8 3.2 F 3.3 0.9 2.1 1.0 0.1 1.2 3.3 5.8 6.1 2.8 1.3 3.4 4.2 3.4 1.1 4.2 1.8 1.1 7.5 3.8 1.2 2.2 0.8 0.8 5.1 2.6 7.6 3.3 0.5 0.6 0.3 1.9 0.0 B 1.9 1.1 2.4 2.6 2.2 2.5 2.1 2.7 2.5 2.5 2.0 2.9 2.8 3.0 3.6 2.6 2.4 2.4 1.8 1.6 1.5 2.0 1.8 1.9 1.7 1.8 2.0 1.5 1.2 1.0 1.9 0.9 2.3 1.5 0.0 F B 0.9 2.4 5.4 3.3 1.6 2.9 0.6 3.3 0.1 3.6 0.6 3.5 2.6 2.6 3.2 2.4 1.7 4.5 0.7 3.1 2.0 3.8 2.1 4.0 2.4 5.6 0.6 4.1 4.1 2.4 3.1 2.7 1.8 3.5 3.4 1.2 4.3 1.1 0.8 2.3 2.8 1.6 0.2 3.4 0.6 2.7 4.3 1.7 4.2 1.4 9.6 1.5 2.9 0.5 0.6 1.4 0.8 0.6 0.6 1.9 3.0 1.6 0.0 0.0 Japn F B Corea F Mxico B F B Rusia F B USA F 1.6 4.1 2.7 19.3 2.4 2.0 7.3 4.1 22.4 2.3 2.7 2.6 4.5 13.6 3.1 2.2 0.9 7.0 25.8 3.0 2.3 0.5 6.7 4.0 2.8 2.0 0.8 6.1 6.5 3.1 2.0 2.0 6.2 10.3 2.5 2.9 3.2 4.4 12.4 3.3 2.6 1.3 7.2 15.4 2.8 2.2 0.6 5.5 5.4 2.5 1.8 2.9 2.5 1.7 1.1 2.2 2.5 4.5 2.8 2.3 0.6 3.0 1.4 5.0 2.3 2.8 0.4 3.2 0.3 5.5 0.7 2.5 0.3 2.9 0.8 4.6 0.8 2.0 0.2 2.5 3.7 4.3 3.1 2.2 0.8 2.7 2.6 2.5 4.7 0.9 3.4 3.0 0.5 3.0 1.3 0.2 2.5 0.0 1.2 2.9 1.1 2.1 2.4 5.7 6.1 2.9 14.2 2.0 3.0 2.9 1.4 2.5 1.2 2.1 2.7 4.1 2.1 1.7 7.0 2.9 4.2 5.4 0.6 2.3 1.0 1.1 2.0 1.8 1.9 1.5 0.4

1.7 2.4 0.2 0.6 5.7 1.4 37.4 1.6 9.6

4.6 3.4 8.3 1.8 1.0 2.4 20.2 2.5 11.0 6.3 5.2 3.0 3.0 0.4 3.7 1.6 3.9 1.3 1.5 0.3 2.8 3.2 6.1 3.5 3.1 0.2 3.4 9.0 5.8 11.1 5.3 1.1 3.4 9.8 6.7 5.9 3.5 1.0 4.9 0.6 5.5 0.6 3.0 0.2 3.3 1.7 4.6 0.4 2.1 0.2 2.5 2.2 3.3 0.1 1.6 0.5 1.2

2.6 3.1 6.1 37.7 2.7 13.9 3.6

4.0 3.9 11.9 5.1 9.8 2.0 1.4 3.1

2.4 4.1 6.2 45.3 3.4 29.7 4.1 12.7 2.7 0.6 6.8 15.1 3.2 11.4 3.7 3.1 1.1 7.6 45.0 3.1 12.1 4.1 3.4 1.3 7.7 12.7 4.2 13.3 4.5 2.1 0.2 5.2 1.9 3.0 1.6 3.1 5.4 21.4 2.0 1.8 0.7 6.3 1.2 2.6 0.9 0.7 0.0 0.0 1.3 0.9 2.3 2.6 15.0 1.5 0.9 3.4 2.6 2.7 1.4 2.0 0.7 4.1 6.0 1.7 1.6 2.9 3.5 8.9 2.2 1.6 0.2 4.1 7.2 3.2 1.6 0.3 5.8 1.8 3.6 1.6 1.4 4.0 2.5 2.5 1.8 2.3 3.1 4.5 2.0 0.9 3.9 1.8 11.1 1.9 0.3 1.6 1.2 3.4 0.7 1.0 0.3 3.3 0.1 1.3 0.8 0.0 3.1 0.8 0.8 1.4 0.1 5.3 1.0 1.1 1.3 3.3 4.2 5.6 1.4 0.0 0.0 0.0 0.0 0.0 1.6 3.6 8.0 3.0 2.8 2.6 2.1 1.7 8.2 2.1 6.4 1.4 0.7 2.1 5.6 1.9 1.3 1.1 1.3 2.4 9.9 2.2 3.5 1.9 8.8 1.6 7.6 0.5 1.4 0.9 1.2 0.5 0.1 0.7 5.3 1.6 0.0 0.0

4.7 4.2 19.1 6.6 18.4 2.8 2.2 3.1 13.6 3.1 11.9

4.7 3.1 4.1 2.7 1.4 2.8 16.0 1.0 2.2

7.2 1.9 3.1 0.9 2.6 1.6 22.2 1.1 12.3 1.2 2.1 2.1 0.9 2.3 1.2 2.7 3.8 1.7 0.9 0.2 2.0 2.7 3.4 2.3 1.6 0.0 2.6 0.5 3.1 0.5 2.4 0.1 3.6 1.9 2.9 1.7 0.9 0.4 2.2 1.9 3.0 1.9 1.3 0.9 1.5 6.3 1.6 5.3 0.8 2.4 1.1 1.9 1.2 1.8 0.3 0.9 1.2 0.4 1.9 0.2 1.0 0.1 1.9 0.1 1.1 0.1 0.4 0.0 1.1 0.2 2.6 0.2 1.0 0.0 1.5 3.9 2.3 0.9 1.0 0.1 2.0 0.0 0.0 0.0 0.0 0.0 0.0 6.6 1.0 1.6 0.5 1.8 2.5 0.1 2.4 0.5 1.0 2.2 2.4 3.9 1.3 5.0 3.2 1.5 6.3 2.4 1.4 27.2 2.8 1.0 4.5 8.8 1.1 39.1 4.3 1.5 2.8 0.0 1.2 0.1 0.1 1.3 0.1 1.1 1.5 5.9 0.0 0.0 0.0

2.8 3.3 2.6 1.2 1.5 2.2 13.8 2.0 6.5

1.3 5.7 4.8 13.4 1.0 33.0 1.7 27.7

26.7 1.9 14.1 2.1 6.7 1.0 3.3 1.4

Source: Prepared with information matrices WIOD world trade.

Participation of foreign and domestic value added in exports

VAD Incorporado en Exportaciones 1995 VAF Incorporado en Exportaciones 1995 VAD Incorporado en Exportaciones 2011 VAF Incorporado en Exportaciones 2011

Pas

Estados Unidos
China Alemania Japn Reino Unido Rusia Corea Francia Mxico Brasil Promedio 40 pases

91%
85% 83% 94% 82% 93% 76% 81% 80% 92% 76%

9%
15% 17% 6% 18% 7% 24% 19% 20% 8% 24%

86%
78% 74% 82% 80% 94% 58% 72% 75% 88% 70%

14%
22% 26% 18% 20% 6% 42% 28% 25% 12% 30%

Source: Prepared with information matrices WIOD world trade.

Estados Unidos_95 91% 86% 85% 15% 14% 9% Estados Unidos_11 China_95 China_11

78%
83% 74% 94% 82% 82% 80% 93% 94% 17% 26% 6% 18% 18% 20% 7%

22%

Alemania_95 Alemania_11 Japn_95 Japn_11 Reino Unido_95 Reino Unido_11

Domstico

Rusia_95
Rusia_11 Corea_95 Corea_11 Francia _95 Francia _11 Mxico_95 Mxico_11 Brasil_95 58%

Forneo 6%

Source: Prepared with information matrices WIOD world trade.

76%
42% 81% 72% 80% 75% 92% 19% 28% 20% 25% 8%

Domestic and foreign content in exports in value added

24%

Brasil_11

88%

12%

Domestic and foreign content in exports in value added

Domstico
Estados Unidos _95 Taiwan _95 Turqua _95 Suecia _95 Eslovenia _95 Repblica Eslovaquia_95 Rusia _95 Rumania _95 Portugal _95 Polonia _95 Holanda _95 Malta _95 Mxico _95 Latvia _95 Luxemburgo _95 Lituania _95 Corea _95 Japn _95 Italia _95 Irlanda _95 India _95 Indonesia _95 Hungria _95 Grecia _95 Reino Unido _95 Francia _95 Finlandia _95 Estonia _95 Espaa _95 Dinamarca _95 Alemania _95 Republica Checa _95 Chipre _95 China _95 Canad _95 Brasil _95 Bulgaria _95 Blgica _95 Austria _95 Australia _95

Forneo
86% 91% 48% 14% 9% 34% 21% 14%

52%

66%

70% 76% 65% 66% 60% 68%

79% 86%

45%

77% 76% 73% 74% 66% 83% 62% 69% 59% 75% 80% 74% 73% 54% 64% 65% 58%

94% 93%

30% 24% 35% 34% 40% 32%

55%

23% 24% 27% 26% 34% 17% 38% 31% 41% 25% 20% 26% 27% 46% 36% 35% 42%

6% 7%

38%

62%

76% 82% 81%

72% 57% 63%

94% 43% 37%

24% 18% 19%

28%

6%

71% 75% 79% 80% 82% 72% 81% 66% 78% 67% 61% 70% 81% 63% 73% 74% 83% 55% 70% 71% 71% 78% 85% 82% 80% 88% 92% 65% 64% 55% 63% 66% 77% 86% 88%

55%

82% 89% 87% 86%

29% 25% 21% 20% 18% 28% 19% 34% 22% 33% 39% 30% 19% 37% 27% 26% 17% 45% 30% 29% 29% 22% 15% 18% 20% 12% 8% 35% 36% 45% 37% 34% 23% 14% 12%

45%

18% 11% 13% 14%

Sector participation in the Domestic Value Added built in 2011 exports

Rangos:

<

Sector participation in the Foreign value added embodied in exports 2011

Rangos:

<

Countries participating in higher proportion in exports from third countries 2011 (composition clusters.)

Anexo. APL 1995

APL 2011

Trade in value added 1995

Trade in value added 2011

Bibliography
* Dietzenbacher, E. and Romero, I. (2007): Production Chains in an Interregional Framework: Identification by Means of Average Propagations Lengths, International Regional Science Review, 30, 362-383. * Dietzenbacher, E.; Romero I. and Bosma, N.S. (2005): Using Average Propagation Lengths to Identify Production Chains in the Andalusian Economy, Estudios de Economa Aplicada, 23, 405-422. * Dietzenbacher, E.; Romero I. and G.J.D. Hewings (2009), Fragmentation and complexity: Analyzing structural change in the Chicago regional economy, Revista de Economa Mundial, 23 (2009), 263-282. * Robert Koopman and Zhi Wang (2012), The Value-added Structure of Gross Exports and Global Production Network, United States International Trade Commission, Paper for Presentation at the Final WIOD Conference "Causes and Consequences of Globalization, April 24-26, 2012, Groningen, the Netherlands * Robert Koopman, William Powers, Zhi Wang, Shang-Jin Wei (2010), "Give Credit Where Credit Is Due: Tracing Value Added in Global Production Chains., NBER Working Paper No. 16426. September. * Koopman, Robert, Zhi Wang and Shang-jin Wei. (2012) Estimating domestic content in exports when processing trade is pervasive." Forthcoming, Journal of Development Economics.