WPS6432 Policy Research Working Paper 6432 Services Linkages and the Value Added Content of Trade Joseph Francois Miriam Manchin Patrick Tomberger The World Bank Poverty Reduction and Economic Management Network International Trade Department, May 2013 Policy Research Working Paper 6432 Abstract Services trade constitute roughly one-third of trade on and indirect contribution of services to value added a value added basis, and much of this is concentrated contained in a given country’s exports, but also the extent in margin services (transport, logistics) linked to trade to which third-country value added in services, through in goods. However, producer services are also part of intermediate linkages of imported goods and services, the value added contained in traded goods. This is are also embodied in production and trade. This exercise especially true in high income countries, where services serves to highlight not only the importance of non- account for roughly 70 percent of value added. Working tradables in trade, but also by extension the importance with data (a set of global social accounting matrices that productivity, foreign affiliates sales, and trade and spanning intermittent years from 1992 to 2007) this investment in services may hold for interdependence and paper examines the services embodied in trade on a cross-border linkages. value added basis. This includes not only the direct This paper is a product of the e International Trade Department, Poverty Reduction and Economic Management Network. It is part of a larger effort by the World Bank to provide open access to its research and make a contribution to development policy discussions around the world. Policy Research Working Papers are also posted on the Web at http://econ.worldbank. org. The authors may be contacted at joseph.francois@jku.at, m.manchin@ucl.ac.uk and Patrick.Tomberger@jku.at. The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent. Produced by the Research Support Team Services Linkages and the Value Added Content of Trade ∗ Joseph Francois Miriam Manchin Patrick Tomberger May 1, 2013 Keywords: Trade in Services, Value Added and Trade, Input-Output JEL codes: F10 Sector Board: Economic Policy ∗ The authors, Joseph Francois (Johannes Kepler Universit¨ at Linz and CEPR), Miriam Manchin (University College London), and Patrick Tomberger (Johannes Kepler Univer- at Linz), can be reached respectively at joseph.francois@jku.at, m.manchin@ucl.ac.uk and sit¨ Patrick.Tomberger@jku.at. This work is part of a wider project by the World Bank’s Interna- tional Trade Department to offer a framework and analytical instruments that can be used to undertake a systematic assessment of a country’s competitiveness and trade performance in the services and goods sector. The applications to policy analysis of this work are discussed more widely in the forthcoming Services Trade and Competitiveness Diagnostics Toolkit (Saez et al. forthcoming). The �ndings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not represent the official views of their respective institutions, or of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent. 1 Introduction According to the WTO, the global value of cross-border services exports in 2007 was $3 trillion, or some 20 percent of world trade in goods and services. However, the share of services rises to almost 50 percent if transactions are measured in terms of direct and indirect value added content - that is, if trade is measured in terms of the value that is added by processing of imported components into �nal products for export as opposed to measuring trade flows on the basis of the gross value of goods crossing the border (Escaith, 2008). If we add in the sales of services by foreign affiliates of multinational �rms, then the value of trade in services rises further. Data for 15 OECD countries puts the value of such sales at some $1.5 trillion in 2007 (WTO, 2009). While the expanding economic importance of services has not gone unnoticed, traded services have not �gured prominently in the economic growth and develop- ment literature, and have been downplayed in the input- output and CGE literature. Traditional international economics textbooks tend to assume (assert) that services are largely non-tradable. This started to change with the emergence of services on the international policy agenda in the 1980s, in part as a consequence of U.S. proposals to negotiate multilateral rules on policies affecting trade and investment 1 in services. Productivity trends in services have been a basic determinant of recent growth in the OECD. Working with the EU-KLEMS database, Inklaar, Timmer, and van Ark (2007) �nd rising investment in ICT (information and communications technol- ogy), as well as growth in human capital contributed, were both important drivers of labor productivity in commercial services in Europe, though there are marked differences across countries and sectors. How well this translated into overall pro- ductivity growth helps explain overall differences in performance across Europe. Similarly, Triplett and Bosworth (2004) �nd that in the United States productiv- ity growth in services has been critical to overall US growth since the early 1990s. The literature using input-output analysis to study services in individual countries 1 See Francois and Hoekman (2010) for an overview. This is a basic point to be taken from the theoretical literature on trade in services, including Markusen (1989), Francois (1988, 1990), van Marrewijk et al (1997), and Markusen Rutherford and Tarr (2005). 2 reinforce the messages from the recent growth econometrics literature. For exam- ple, Francois and Reinert (1997) note that exports become increasingly producer (business) service intensive (in terms of combined direct and indirect linkages) with increasing industrialization, while Francois and Woerz (2008), mapping measures of Leontief-based direct and indirect service intensity to production and productiv- ity indicators, �nd that service sector openness has boosted the competitiveness of more technology and skill intensive industry in the OECD, at the expense of less ICT and skill intensive sectors. Robinson et al. (2002) stress indirect effects from services sector trade liberalization on the efficiency and output of other sectors in the economy, working through inter-industry input-output relations induced by im- ports of high-quality services.2 A basic message of this literature is that, at least for the OECD, the service sector is critical to the overall cost structure and recent performance of industrial economies. In this paper, we work with a panel of global input-output data (a set of global social accounting matrices spanning intermittent years from 1992 to 2007) that covers not only key OECD economies, but also a range of developing countries as well. Our use of this 15 year panel of input output data sets what we do apart from the existing literature on services linkages, as we are able to trace more long-run patterns. Working with these data, we examine the structure of services embodied in trade on a value added basis. This includes not only the direct and indirect contribution of services to value added contained in a given country’s exports, but also the extent to which third-country value added in services, through intermediate linkages of imported goods and services, are also embodied in production and trade. This exercise serves to highlight the importance of non-tradables in trade, and how this has evolved since the early 1990s. It also reinforces the importance of non- traded, domestic activities for the competitiveness of goods on export markets. Not surprisingly, the ratio of value added to gross trade values has been falling for goods since 1992, consistent with the now common observation that production chains for goods have become more complex. However, it turns out that this same pattern is also seen for services. Yet there is a marked difference with respect to goods. In goods sectors, value added, even when we account for linkages and 2 Also see Kravis, Heston and Summers (1983), Inman (1985), Park and Chan (1989) and Uno (1989). 3 indirect exports, is far less than the gross value of exports. This is because vertical chains of production mean the same value added is exported several times before �nal sale. In services, however, indirect exports (forward linkages) are far more important. Indeed, they are so important that indirect exports, on a value added basis, are consistently greater than the value of gross exports. However, as service tradability has increased since the early 1990s, for some service sectors this ratio is falling, though it is still far above the pattern observed for goods. We have organized the paper as follows. Section 2 discusses concepts for mea- surement of value added intensity, as well as our data. Section 3 focuses on how services trade has evolved globally, and how this differs from goods. Section 4 then discusses data issues at a country level. This is followed by closing remarks in Section 5. 2 Concepts and Data We work with multiple versions of the GTAP database, benchmarked to 1992, 1995, 1997, 2001, 2004, and 2007. It represents a form of social accounting data – a vari- ation on the social accounting matrix or SAM – where incomes or receipts are shown in the rows of the SAM while expenditures or outlays are shown in the columns. The basic structure of the GTAP dataset is well documented (see Mc- Dougall 2001, and McDougall et al 2005). It is produced by a consortium that includes the World Bank, US International Trade Commission, World Trade Or- ganization, OECD, UNCTAD, UNFAO and a number of universities and research institutes. It represents a massive combined effort to produce a shared public good – a database of national intput-output tables, organized as social accounting data and linked to each other through trade and investment flows. The project itself, based as Purdue University, has been a massive undertaking. (Hertel 2011). It stands as a critical, open source input to applied policy modeling ranking from climate change to regional trade agreements and food security. Over time, the dataset has grown to include more countries and more sectors. To maintain backward compatibility, we start with the 1992 structure of regions and sectors, and carry this forward in aggregation of more recent iterations of the dataset. This structure is detailed in Table 1 below. 4 Table 1: Regions and Sectors Regions Sectors aus Australia aff Agr, Forestry, Fisheries nzl New Zealand pfd Processed Foods jpn Japan egy Energy Extraction kor Korea omn Minerals nec idn Indonesia bt Beverages and Tobacco Products mys Malaysia tex Textiles phl Philippines wap Wearing Apparel sgp Singapore lea Leather Products tha Thailand lum Wood Products chn China ppp Paper Products, Publishing hkg Hong Kong crp Chemical, Rubber, Plastic Products twn Taiwan nmm Mineral Products nec ind India is Ferrous Metals ras Rest of South Asia nfm Metals nec can Canada fmp Metal Products usa United States trn Transport Equipment mex Mexico mac Machinery and Equipment nec cam Central America, Caribbean omf Manufactures nec arg Argentina egw Electricity, Gas, Water bra Brazil cns Construction chl Chile tt Trade and Transport Services rsm Rest of South America osp Other Private Services e12 European Community 12 osg PubAdmin/Defence/Health/Educat ec3 Austria, Finland, Sweden dwe Dwellings eea new EU12 Members fsu Former Soviet Union mea Rest of Middle East ssa Rest of Sub-Saharan Africa row Rest of World 5 While national service flows are based on national input-output data, the data on services trade flows come from a number of sources. The OECD, Eurostat and the UN all provide data in some form on bilateral services trade flows (both imports and exports), by partners and BOPs (balance of payments sectors) for up to 24 sectors and subsectors. The most comprehensive coverage of reporting countries among the three sources is UN, which at present count provides data on roughly 190 reporters. Eurostat and OECD provide data for a more limited number of reporters, though with more sector detail than the UN. Eurostat covers 27 EU members plus Croatia, Iceland, Japan, Norway, Turkey, Switzerland, and USA, while the OECD covers 28 countries (all the OECD members apart from Chile, Iceland, Israel, Slovenia, and Switzerland). Time coverage is the deepest with EUROSTA. IMF data cover almost as many countries as the UN, and for a longer time span, but only for trade with world.3 Within GTAP, the efforts to reconcile services balance of payments data with national input-ouput data are well documented, and reflect innovative approaches based on information theory and entropy methods to flesh out the pattern of trade enough to allow construction of a global dataset for estimating cross-border trade in services. (See MacDougall and Hagemejer 2005, and Van Leeuwen and Lejour 2006). For the transport sector, reconciliation of trade data is explicitly linked to the parallel reconciliation of data on trade in goods, as services play a critical role in bridging the gap between reported export flows for goods, in one country’s national accounts data, and reported import flows in another country’s data (Gelhar 1996). The structure of the data provides a comprehensive and consistent record of national income accounting relationships between different sectors and regions. It is based on a fundamental, general equilibrium principle of economics – every income (receipt) has a corresponding expenditure (outlay). The strength of this framework is that it provides a comprehensive and consistent record of the interrelationships of an economy, including intermediate and �nal demand linkages. For our purposes, it offers the advantage of linking consumption and external trade patterns explicitly to the inter-industry structure of intermediate demand. This allows for a fuller analysis than is possible when working strictly with input-output tables. 3 See Francois and Pindyuk (2010). 6 To generate these values, we begin by denoting a representation of intermediate and �nal demands as follows: Y = Z − AZ (1) In equation (1), the term Y denotes a �nal �nal demand vector, Z denotes a gross output vector, and A denotes a matrix of intermediate use coefficients. Equation (1) therefore de�nes �nal output with respect to intermediate input requirements. With some manipulation we arrive at the Leontief inverse matrix, also known as the multiplier matrix M. −1 Z = (I − A) Y = MY (2) The multiplier matrix M measures the inputs contained in a unit of �nal output. In particular, if we assign the sector indexes i, j to the A and M matrices, then a representative element of the M matrix Mij gives the direct and indirect inputs (and thus the sector i receipts) linked to each unit (for example each dollar) of sector j receipts in the data.4 This implies real production activities measured by value of output. For our purposes, it provides a means to trace, through these income flows, the flow of gross activity and value added from intermediate to �nal goods and services, ostensibly across borders as well as sectors. Because linkages will vary by industry, each industry will be characterized by different multipliers. To focus on value added, we note �rst that in terms of gross output values Z, some ˆ as the diagonal share of this involves value added within each sector. We de�ne B matrix indexed over i, j with diagonal elements equal to the value added shares of output Z. We then use M to provide a breakdown of the flow of value added across activities in the form of the matrix V. ˆ V = BM (3) Similar to the Leontief inverse matrix itself, the V matrix identi�es the inputs of value added in each sector related to a unit of �nal demand. If we multiply V by 4 In multiplier analysis with �xed input coefficients, these values also represent �xed unit input requirements in value terms, though of course in CGE models one can allow for these coefficients to be endogenous. 7 ˆ whose non-zero elements are the vector of �nal outputs, the the diagonal matrix Y matrix yields a breakdown of economy-wide value added (the primary component of Gross National Product on a source basis). Similarly, if we multiply V by the ˆ whose non-zero elements are the national export vector, we can diagonal matrix X recover the value added content of exports X (both direct and indirect). ˆ G = VY (4) ˆ H = VX (5) The G matrix and the H matrix give us the set of linkages, both direct and indirect, between value added across sectors. 3 Global patterns of production and trade We start with the pattern of global production and trade. In this case, we have collapsed all regions to a single region, keeping the sectors de�ned in Table 1. We also preserve the flow of trade (exports and imports) for this aggregate world, so that we can examine at a global level the properties of trade flows in terms of direct and indirect value added (considering forward linkages), and the share of services in the cost of traded goods. We will then carry forward the same approach, examining relative gross and value added flows, and the relevance of linkages to speci�c sectors, at individual country level in the subsequent section. We start with the ration of total value added in exports, relative to the gross value of exports. This is reported in Table 2. It corresponds to ratios of the sector ˆ and H, hj : xj . For the world as a whole, there has been a discernible totals for X drop in the value added content of exports, relative to gross exports, since 1992. This �ts with the theme, common to the value chain literature and to explanations of the collapse in trade during the Great Recession, that the global subdivision of labor, and the resulting increased roundaboutness of production, means we are double counting value added when we look at gross trade values. As production fragments vertically along geographic lines, this should lead to a fall in this ratio. 8 Table 2: Total value added in exports relative to gross value of exports 1992 1995 1997 2001 2004 2007 Total 0.830 0.783 0.748 0.735 0.723 0.711 Public Services 1.569 1.139 1.463 1.433 1.390 1.390 Commercial Services 2.125 2.666 2.168 1.985 2.072 1.873 Trade and Transport 1.174 1.161 1.221 1.234 1.068 1.028 Construction 2.957 1.976 1.482 1.833 1.863 1.472 Other Manufactures 0.662 0.625 0.607 0.595 0.620 0.623 Machinery 0.494 0.476 0.430 0.416 0.392 0.395 Transport Equipment 0.405 0.374 0.347 0.339 0.323 0.323 Metals 0.828 0.702 0.660 0.645 0.642 0.553 Chemicals 0.591 0.604 0.543 0.515 0.470 0.449 Textiles, clothing, footwear 0.427 0.417 0.412 0.426 0.399 0.407 Energy and mining 1.108 1.077 0.925 1.017 0.949 0.873 Agriculture and processed foods 0.781 0.741 0.710 0.753 0.744 0.756 There are identi�able differences across sectors. On the low end, trade in machin- ery, transport equipment, and textiles and clothing all have value added contents less than 41% of the gross trade values as of 2007. These drops are between 2 and 10 percent points since 1992. To put this into perspective this also means that for every $100 in gross exports flows globally in machinery in 1992, there was $49.40 in value added. By 2007, this had dropped to $39.50, a drop of 20 percent in the value added content of trade in this sector. For transport equipment, the drop is from $40.50 to $32.30, or a 20 percent drop in the value added content of trade. The pattern is quite different when we focus on services sectors. A �rst point to note in Table 2 is that the ratio of value added to gross exports is consistently greater than 1. What this means is that most exports in services, on a value added basis, are embodied in exports of goods. Direct exports in services are small, globally, relative to indirect of embodied exports. Another point to note is that this ratio has not really changed since the early 1990s. In other words, though trade in services has grown rapidly, so has trade in goods. With the exception of construction, where there has been substantial growth in direct exports, the basic patten is one of embodied exports dominating direct exports, and relative stability in this pattern in the 1992-2007 period. We turn next to the basic composition of trade for the world as a whole, both in gross value terms and adjusted to measure instead the value added content of trade. We report these in Tables 3, 4, 5, and 6. The basic pattern is again one of stability 9 Table 3: Sector shares of gross exports – World Trade 1992 1995 1997 2001 2004 2007 Agr, Forestry, Fisheries 0.041 0.034 0.029 0.026 0.023 0.021 Processed Foods 0.031 0.042 0.038 0.035 0.036 0.034 Energy Extraction 0.079 0.053 0.062 0.058 0.086 0.114 Minerals nec 0.017 0.014 0.006 0.005 0.010 0.013 Beverages and Tobacco Products 0.008 0.007 0.008 0.007 0.007 0.007 Textiles 0.027 0.026 0.030 0.028 0.025 0.020 Wearing Apparel 0.028 0.027 0.022 0.022 0.019 0.016 Leather Products 0.014 0.014 0.012 0.013 0.010 0.009 Wood Products 0.016 0.017 0.017 0.017 0.016 0.015 Paper Products, Publishing 0.022 0.025 0.021 0.021 0.018 0.016 Chemical, Rubber, Plastic Products 0.082 0.097 0.093 0.099 0.111 0.109 Mineral Products nec 0.009 0.011 0.016 0.016 0.010 0.010 Ferrous Metals 0.022 0.028 0.023 0.020 0.024 0.027 Metals nec 0.016 0.018 0.024 0.022 0.024 0.031 Metal Products 0.016 0.018 0.018 0.018 0.018 0.019 Transport Equipment 0.090 0.090 0.095 0.103 0.107 0.099 Machinery and Equipment nec 0.219 0.242 0.257 0.257 0.235 0.214 Manufactures nec 0.026 0.023 0.022 0.026 0.017 0.017 Electricity, Gas, Water 0.001 0.001 0.004 0.004 0.004 0.005 Construction 0.002 0.004 0.006 0.004 0.004 0.006 Trade and Transport Services 0.147 0.129 0.111 0.103 0.098 0.096 Other Commercial Services 0.080 0.056 0.073 0.082 0.085 0.092 Public Services 0.007 0.023 0.015 0.015 0.014 0.012 Dwellings 0.000 0.000 0.000 0.000 0.000 0.000 Total 1.000 1.000 1.000 1.000 1.000 1.000 10 in the relative importance of services trade globally, whether measured on a gross or net basis. On the goods side, chemicals and metals account for an increasing share of total trade in value added, while the share devoted to transport and trade services has fallen consistently. Interestingly, public services (including education and health care) account for a rising share of both gross trade values and embodied trade. Where one has more detailed data on these sectors (from EU-KLEMS for example), this may point to a path for promising research quantifying the impact of rising health costs have had on cost structures as reflected in the value added content of trade. Table 4: Sector shares of direct value added exports – World Trade 1992 1995 1997 2001 2004 2007 Agr, Forestry, Fisheries 0.050 0.046 0.039 0.036 0.034 0.031 Processed Foods 0.017 0.026 0.025 0.024 0.026 0.024 Energy Extraction 0.077 0.061 0.075 0.069 0.119 0.153 Minerals nec 0.019 0.016 0.007 0.006 0.013 0.017 Beverages and Tobacco Products 0.007 0.007 0.008 0.007 0.007 0.006 Textiles 0.018 0.019 0.022 0.021 0.020 0.015 Wearing Apparel 0.019 0.020 0.018 0.019 0.015 0.012 Leather Products 0.010 0.010 0.009 0.009 0.007 0.006 Wood Products 0.014 0.015 0.014 0.015 0.014 0.013 Paper Products, Publishing 0.021 0.024 0.021 0.020 0.019 0.016 Chemical, Rubber, Plastic Products 0.058 0.083 0.076 0.081 0.095 0.090 Mineral Products nec 0.008 0.011 0.016 0.016 0.010 0.010 Ferrous Metals 0.013 0.019 0.015 0.012 0.016 0.018 Metals nec 0.011 0.012 0.016 0.014 0.017 0.022 Metal Products 0.015 0.017 0.017 0.017 0.019 0.019 Transport Equipment 0.075 0.069 0.066 0.072 0.072 0.066 Machinery and Equipment nec 0.203 0.231 0.231 0.230 0.194 0.176 Manufactures nec 0.022 0.020 0.019 0.024 0.017 0.017 Electricity, Gas, Water 0.001 0.002 0.005 0.005 0.005 0.006 Construction 0.002 0.004 0.006 0.004 0.005 0.007 Trade and Transport Services 0.210 0.179 0.158 0.143 0.117 0.111 Other Commercial Services 0.117 0.073 0.111 0.125 0.134 0.143 Public Services 0.011 0.036 0.028 0.029 0.026 0.023 Dwellings 0.000 0.000 0.000 0.000 0.000 0.000 total 1.000 1.000 1.000 1.000 1.000 1.000 While most of the discussion in this paper is focused on forward linkages, in Table 6 we have focused instead on backward linkages. In other words, when we focus on actual exports of metals or transport equipment or chemicals, and recognize that these embody value added from upstream activities, what is the value added 11 Table 5: Sector shares of total value added exports – World Trade Direct and indirect exports through forward linkages 1992 1995 1997 2001 2004 2007 Agr, Forestry, Fisheries 0.055 0.053 0.046 0.045 0.042 0.041 Processed Foods 0.015 0.021 0.020 0.019 0.020 0.019 Energy Extraction 0.092 0.058 0.061 0.060 0.093 0.118 Minerals nec 0.015 0.013 0.009 0.008 0.013 0.016 Beverages and Tobacco Products 0.005 0.005 0.006 0.006 0.005 0.005 Textiles 0.017 0.018 0.019 0.020 0.016 0.014 Wearing Apparel 0.012 0.012 0.011 0.011 0.008 0.007 Leather Products 0.006 0.007 0.006 0.006 0.005 0.004 Wood Products 0.011 0.011 0.011 0.011 0.011 0.010 Paper Products, Publishing 0.027 0.027 0.025 0.024 0.021 0.019 Chemical, Rubber, Plastic Products 0.058 0.075 0.067 0.069 0.072 0.069 Mineral Products nec 0.009 0.011 0.015 0.015 0.010 0.010 Ferrous Metals 0.020 0.023 0.021 0.018 0.020 0.020 Metals nec 0.012 0.012 0.014 0.013 0.014 0.016 Metal Products 0.022 0.022 0.022 0.022 0.025 0.024 Transport Equipment 0.044 0.043 0.044 0.048 0.048 0.045 Machinery and Equipment nec 0.131 0.147 0.148 0.146 0.128 0.119 Manufactures nec 0.013 0.014 0.014 0.017 0.012 0.012 Electricity, Gas, Water 0.024 0.027 0.024 0.031 0.028 0.029 Construction 0.007 0.010 0.011 0.010 0.012 0.012 Trade and Transport Services 0.207 0.191 0.181 0.173 0.145 0.139 Other Commercial Services 0.177 0.162 0.196 0.197 0.223 0.223 Public Services 0.013 0.033 0.030 0.029 0.027 0.024 Dwellings 0.006 0.006 0.003 0.003 0.003 0.003 Total 1.000 1.000 1.000 1.000 1.000 1.000 12 content of exports, on a sector basis? The most important sector is machinery at 19.4 percent, a share that has slightly decreased from 1992-2007. Collectively, machinery, transport equipment, metals, and chemicals account for 45 percent of all exports, on a value added basis. If we compare the values in Table 5 with those in Table 6, it is clear that a large share of total value added, in the goods sectors that dominate trade on a gross value basis, comes from service inputs to manufacturing.5 Table 6: Sector shares of total value added exports – World Trade Direct and indirect exports through backward linkages 1992 1995 1997 2001 2004 2007 Agr, Forestry, Fisheries 0.044 0.039 0.033 0.030 0.027 0.025 Processed Foods 0.032 0.043 0.039 0.036 0.038 0.037 Energy Extraction 0.078 0.055 0.062 0.061 0.092 0.121 Minerals nec 0.018 0.015 0.006 0.006 0.011 0.015 Beverages and Tobacco Products 0.009 0.008 0.008 0.008 0.008 0.007 Textiles 0.024 0.024 0.027 0.025 0.023 0.019 Wearing Apparel 0.023 0.023 0.020 0.021 0.017 0.016 Leather Products 0.012 0.013 0.011 0.012 0.009 0.009 Wood Products 0.017 0.018 0.017 0.017 0.017 0.015 Paper Products, Publishing 0.023 0.026 0.022 0.022 0.020 0.017 Chemical, Rubber, Plastic Products 0.077 0.091 0.085 0.091 0.102 0.098 Mineral Products nec 0.009 0.011 0.017 0.017 0.011 0.010 Ferrous Metals 0.021 0.026 0.022 0.019 0.022 0.025 Metals nec 0.014 0.016 0.022 0.020 0.022 0.027 Metal Products 0.016 0.018 0.018 0.018 0.019 0.019 Transport Equipment 0.089 0.084 0.088 0.095 0.095 0.087 Machinery and Equipment nec 0.208 0.229 0.239 0.234 0.214 0.194 Manufactures nec 0.024 0.022 0.021 0.025 0.017 0.017 Electricity, Gas, Water 0.001 0.002 0.004 0.004 0.004 0.006 Construction 0.002 0.004 0.006 0.004 0.005 0.007 Trade and Transport Services 0.161 0.144 0.126 0.116 0.106 0.101 Other Commercial Services 0.090 0.065 0.087 0.098 0.104 0.111 Public Services 0.008 0.026 0.019 0.019 0.017 0.016 Dwellings 0.000 0.000 0.000 0.000 0.000 0.000 Total 1.000 1.000 1.000 1.000 1.000 1.000 Finally, before turning to individual countries and regions, we look at the im- port intensity of cost structures across industry. Strictly speaking, this is not a measure of value added contents, but at this stage we have calculated the share of imported inputs in gross costs across sectors. This involves a variation of equation (5), adjusted to track import costs downstream rather than domestic value added. What this yields is a measure of the extent to which individual sectors have become 5 It is also the case that we should expect, in a world without f.o.b and c.i.f margins and trade taxes, that values in Tables 6 and 3 ought to be the same. 13 increasingly globalized in terms of costs structures – in other words the extent to 6 which linkages are crossing borders. The rise in direct imports as share of total costs, from Table 7, stands out across manufacturing, though it is far less impor- tant for services. Services remain largely non-traded on a cost basis, with imports representing one-third to one-quarter of the share we see for goods production.7 Table 7: Direct imports as a share of gross costs 1992 1995 1997 2001 2004 2007 Agr, Forestry, Fisheries 0.032 0.046 0.044 0.046 0.054 0.055 Processed Foods 0.079 0.096 0.096 0.091 0.091 0.092 Energy Extraction 0.099 0.151 0.249 0.243 0.267 0.274 Minerals nec 0.057 0.094 0.063 0.063 0.079 0.084 Beverages and Tobacco Products 0.064 0.076 0.077 0.078 0.099 0.101 Textiles 0.121 0.132 0.155 0.155 0.161 0.147 Wearing Apparel 0.128 0.132 0.151 0.149 0.171 0.154 Leather Products 0.129 0.168 0.152 0.163 0.148 0.139 Wood Products 0.080 0.097 0.110 0.110 0.117 0.117 Paper Products, Publishing 0.070 0.105 0.096 0.096 0.091 0.095 Chemical, Rubber, Plastic Products 0.125 0.144 0.155 0.151 0.165 0.176 Mineral Products nec 0.058 0.069 0.083 0.082 0.098 0.109 Ferrous Metals 0.111 0.136 0.121 0.112 0.125 0.151 Metals nec 0.149 0.202 0.182 0.169 0.193 0.238 Metal Products 0.064 0.089 0.107 0.107 0.122 0.142 Transport Equipment 0.107 0.145 0.159 0.165 0.190 0.198 Machinery and Equipment nec 0.103 0.133 0.174 0.187 0.191 0.195 Manufactures nec 0.105 0.120 0.141 0.154 0.145 0.148 Electricity, Gas, Water 0.033 0.058 0.068 0.065 0.077 0.097 Construction 0.049 0.053 0.066 0.069 0.082 0.090 Trade and Transport Services 0.037 0.043 0.055 0.051 0.065 0.077 Other Commercial Services 0.022 0.030 0.031 0.035 0.041 0.048 Public Services 0.023 0.038 0.035 0.032 0.034 0.037 Dwellings 0.005 0.010 0.005 0.004 0.005 0.009 4 Services at country and region level We now turn to an analysis of individual countries and regions. This means that rather than working with globally aggregated social accounting data, we have now subdivided all flows to allow indexing by region. We will not explore bilateral 6 As has been noted elsewhere, the split of bilateral trade into intermediate and �nal use in GTAP is somewhat crude. In our view this is less of a problem here, where we focus on aggregate trade with world. 7 While not explored here, there is also the question of the origin of value added for speci�c types of inputs across sectors. Francois and Woerz (2008) �nd that rising shares for imported service inputs, on a gross value basis, have predictable effects across sectors, depending on which are more of less service intensive in an input basis. 14 Table 8: Total of direct and indirect imports as a share of gross costs 1992 1995 1997 2001 2004 2007 Agr, Forestry, Fisheries 0.077 0.103 0.097 0.100 0.114 0.121 Processed Foods 0.137 0.157 0.156 0.153 0.150 0.153 Energy Extraction 0.341 0.333 0.530 0.562 0.689 0.771 Minerals nec 0.083 0.128 0.092 0.094 0.113 0.121 Beverages and Tobacco Products 0.071 0.085 0.088 0.092 0.113 0.116 Textiles 0.217 0.243 0.283 0.298 0.287 0.274 Wearing Apparel 0.147 0.147 0.168 0.168 0.189 0.169 Leather Products 0.152 0.201 0.189 0.201 0.188 0.179 Wood Products 0.107 0.127 0.148 0.152 0.169 0.169 Paper Products, Publishing 0.142 0.197 0.173 0.174 0.158 0.163 Chemical, Rubber, Plastic Prods 0.356 0.401 0.403 0.395 0.398 0.427 Mineral Products nec 0.083 0.101 0.123 0.125 0.139 0.155 Ferrous Metals 0.229 0.264 0.248 0.219 0.234 0.278 Metals nec 0.225 0.294 0.269 0.251 0.277 0.339 Metal Products 0.106 0.148 0.169 0.172 0.198 0.227 Transport Equipment 0.130 0.187 0.223 0.231 0.268 0.279 Machinery and Equipment nec 0.183 0.236 0.311 0.346 0.359 0.367 Manufactures nec 0.118 0.145 0.175 0.189 0.175 0.180 Electricity, Gas, Water 0.071 0.131 0.157 0.148 0.168 0.215 Construction 0.068 0.078 0.096 0.100 0.126 0.136 Trade and Transport Services 0.163 0.179 0.235 0.226 0.273 0.315 Other Commercial Services 0.103 0.160 0.159 0.176 0.225 0.248 Public Services 0.028 0.052 0.048 0.044 0.044 0.047 Dwellings 0.005 0.011 0.005 0.004 0.005 0.010 15 linkages pertaining to services here but will instead focus on individual subsets of our social accounts data, region by region, with external accounts in each case aggregated to a rest of world. 4.1 all countries Table 9 presents a cross-section, for year 2007, for services shares of exports on a gross value basis, direct value added, and total domestic value added. Two patterns stand out on this basis. One is that certain economies (the United States, Hong Kong, Singapore, and Europe) stand out as commercial services exporters, while lower income countries, at least in terms of direct exports, are lower down the ladder of relative importance for service exports. One exception is India, which has the highest share of commercial service exports on a gross basis among the developing nations, even surpassing the high income countries. Furthermore, on a value added basis, service exports are often much more important than on a gross basis. For high income resource abundant countries (Australia, Canada, New Zealand), there is a similar shift in the share from between 8.4 and 9.3 percent on a gross value basis to between 11.7 and 14.6 on a direct value added basis. For the United States, commercial service exports accounted for more than 20 percent of direct value added exports. For Hong Kong, this is a third. Again India stands out as an outlier with commercial service exports accounting for almost 40 percent on a direct value added basis. We also calculated a revealed comparative advantage index based on forward linkages. These indexes are based on the sector share of value added exports. Ta- ble 10 presents these indexes for each region for the year 2007. The �gures are in line with those presented in Table 9. Again the United States, Hong Kong, Sin- gapore and Europe, but also India, stand out with their comparative advantage in commercial services. 4.2 Brazil, China, Korea, the United States We will next look at how value added structures, and services linkage to trade, have evolved over time. Our dataset is actually quite rich, and will allow (with some adjustments to bilateral allocation of goods trade) to study of cross border linkages 16 Table 9: Services share of exports in 2007 (excluding trade and transport services) direct domestic total domestic gross export shares value added value added Australia 0.088 0.117 0.288 New Zealand 0.084 0.137 0.273 Japan 0.045 0.073 0.229 Korea 0.062 0.112 0.234 Indonesia 0.025 0.033 0.078 Malaysia 0.061 0.100 0.176 Philippines 0.058 0.098 0.141 Singapore 0.147 0.213 0.285 Thailand 0.040 0.062 0.141 China 0.028 0.060 0.160 Hong Kong 0.210 0.337 0.318 Taiwan 0.044 0.090 0.225 India 0.227 0.384 0.364 Rest of South Asia 0.049 0.081 0.149 Canada 0.093 0.146 0.251 United States 0.147 0.206 0.298 Mexico 0.038 0.068 0.186 Central America, Caribbean 0.104 0.171 0.230 Argentina 0.075 0.128 0.209 Brazil 0.074 0.130 0.232 Chile 0.026 0.037 0.222 Rest of South America 0.036 0.050 0.149 EU12 0.143 0.221 0.371 EU3 0.117 0.197 0.362 Central European Associates 0.096 0.166 0.293 Former Soviet Union 0.077 0.096 0.196 Rest of Middle East 0.008 0.013 0.104 Rest of Sub-Saharan Africa 0.051 0.056 0.157 Rest of World 0.103 0.123 0.205 17 Table 10: Relative intensity indices in 2007 (based on forward linkages) Text./ oth. Trade/ Com. Pub. Primary Cloths Machin. Mfc. Transp. Ser. Ser. Australia 0.406 0.005 0.038 0.107 0.128 0.288 0.028 New Zealand 0.315 0.018 0.044 0.145 0.183 0.273 0.022 Japan 0.015 0.007 0.322 0.176 0.187 0.229 0.064 Korea 0.038 0.021 0.348 0.165 0.148 0.234 0.046 Indonesia 0.502 0.069 0.065 0.179 0.101 0.078 0.006 Malaysia 0.255 0.009 0.215 0.154 0.188 0.176 0.005 Philippines 0.118 0.035 0.434 0.103 0.162 0.141 0.007 Singapore 0.019 0.003 0.230 0.164 0.280 0.285 0.019 Thailand 0.158 0.044 0.224 0.199 0.223 0.141 0.011 China 0.184 0.087 0.172 0.255 0.128 0.160 0.013 Hong Kong 0.032 0.033 0.038 0.040 0.538 0.318 0.001 Taiwan 0.023 0.028 0.342 0.198 0.162 0.225 0.022 India 0.197 0.050 0.036 0.150 0.193 0.364 0.010 Rest of South Asia 0.207 0.286 0.011 0.044 0.236 0.149 0.068 Canada 0.255 0.007 0.145 0.206 0.114 0.251 0.022 United States 0.082 0.010 0.196 0.200 0.166 0.298 0.048 Mexico 0.176 0.019 0.314 0.136 0.165 0.186 0.004 Central America, Carib. 0.264 0.065 0.072 0.083 0.253 0.230 0.033 Argentina 0.466 0.012 0.056 0.104 0.131 0.209 0.022 Brazil 0.305 0.020 0.090 0.183 0.159 0.232 0.011 Chile 0.359 0.003 0.014 0.267 0.128 0.222 0.007 Rest of South America 0.595 0.020 0.026 0.117 0.084 0.149 0.009 EU12 0.090 0.023 0.180 0.208 0.106 0.371 0.022 EU3 0.065 0.013 0.191 0.248 0.102 0.362 0.020 Central European EU 0.101 0.037 0.223 0.245 0.084 0.293 0.017 Former Soviet Union 0.480 0.004 0.030 0.092 0.190 0.196 0.007 Rest of Middle East 0.635 0.022 0.062 0.089 0.079 0.104 0.010 Rest of Sub-Sah. Africa 0.485 0.012 0.023 0.155 0.150 0.157 0.017 Rest of World 0.421 0.020 0.059 0.108 0.161 0.205 0.026 18 and how they have evolved since the early 1990s. There are also striking changes in individual countries over time. Singapore shows a dramatic rise in service intensity, while China’s trade explodes in the direction of manufacturing, from 13.7 percent on a gross value basis in 1992 to almost 40 percent in 2007. In Tables 11 to 19, we focus on just four countries: Brazil, China, Korea, and the United States. Table 11 provides a broad overview of services exports on a gross and value added basis for Brazil, China, Korea, and the United States. For the United States, there was some rise between 1992 and 2007, with a period of stagnation between 2001 and 2004, on a gross value basis. However, this is likely because of the rising levels of gross trade relative to value added in manufacturing sectors, as shown in Table 2. There has not been the same rise in roundaboutness for services, and as such gross trade data understate the importance of services exports to the United States. When we focus instead on direct value added content, services (excluding trade and transport) accounted for 28.4 percent of exports in 2007, up from 17.2 percent in 1992. China has seen a dramatic drop in share terms, but as can be seen in Figure 1 this is not something linked to the level of services exports per se, but rather to the very dramatic increase in manufacturing exports since 1992. In 1992, almost half of exports were textiles and clothing, while services were a large share of a small base. While services exports have grown little since, China’s exports are now dominated by machinery exports, on both a value added and gross value basis. For both Korea and Brazil, though commercial services are a relatively low share of exports on a gross value or direct value added basis, they are clearly a major factor in the total cost structure of industry. For example in Korea in 2007, commercial services accounted for only 6.9 percent of exports on a gross value basis, and 13 percent on a direct value added basis, but for 28 percent of all value added contained in exports when embodied exports are included. In contrast, as China has opened up and became a dominant exporter of manufactured goods (especially machinery) the contribution of services to total export value added decreased. Indeed there is an interesting dynamic to China’s service intensity. As China has proceeded to open up and undertaken a dramatic increase in exports of manufactured goods, the initial stages used for productions saw a drop in total domestic value added in exports, with the rising share of manufactured goods. However, as China has progressed 19 to higher stages of processing, with machinery replacing textiles and clothing as a major export category, there has been a recovery in the total service intensity of China’s exports, from a low of 8.7 percent in 1997 to 17.3 percent in 2007. Table 11: Services share of total exports (excluding trade and transport) 1992 1995 1997 2001 2004 2007 Gross Brazil 0.009 0.011 0.074 0.091 0.067 0.086 China 0.128 0.038 0.018 0.021 0.027 0.033 Korea 0.035 0.058 0.067 0.056 0.049 0.069 USA 0.120 0.141 0.147 0.174 0.172 0.193 Direct VA Brazil 0.020 0.024 0.146 0.179 0.124 0.152 China 0.245 0.073 0.026 0.032 0.062 0.073 Korea 0.060 0.101 0.115 0.107 0.094 0.130 USA 0.172 0.179 0.211 0.243 0.253 0.284 Total VA Brazil 0.240 0.231 0.272 0.323 0.242 0.243 China 0.194 0.152 0.087 0.104 0.156 0.173 Korea 0.189 0.231 0.263 0.282 0.260 0.280 USA 0.274 0.266 0.308 0.324 0.327 0.346 Brazil and China actually stand out as some kind of outlier, in terms of value added trends. For the world as a whole, we have seen that the direct value added content of exports in manufacturing has been falling since 1992. This �ts with the concept of vertical disintegration of production along geographic lines, with trade flows rising in gross terms because of shipment of intermediate goods. Yet this is not the case for Brazil and China for the manufacturing sector as a whole. From Table 12 and Table 14, the total domestic value added for other manufacturing has risen from 60.6 to 70.1 between 1992 and 2007 for Brazil and from 51.5 to 67.6 percent for China in the same time period. In Korea it fell from 62.7 percent to 47.3 percent, and in the United States it stayed constant. Total value added content in exports in machinery fell for all four countries between 1992 and 2007. Similarly, in transport equipment alone (not in the table), this rose from 28.7 to 40.6 percent for China, while it stayed constant in Brazil, fell about 7 percent in the United States and increased only marginally in Korea. Brazil’s service intensity has risen over the period (from Table 11), but the driving force is likely linked to import substitution and FDI policies as well. This can be seen from Table 12, where direct domestic value added exports in other manufacturing rose from 60.6 percent to 70.1 percent 20 Figure 1: China’s exports 1992 - 2007 in current dollars between 1992 and 2007. This share has remained flat, or has fallen, for this sectors in China, Korea, and the United States. 21 Table 12: Value added shares of exports by sector – Brazil 1992 1995 1997 2004 2007 Brazil: Primary 0.327 0.356 0.376 0.372 0.379 Direct VA share Textiles and Clothing 0.331 0.324 0.339 0.335 0.342 Machinery 0.301 0.296 0.304 0.271 0.278 other Manufacturing 0.236 0.251 0.269 0.308 0.318 Trade and Transport Services 0.499 0.527 0.567 0.626 0.640 Commercial Services 0.722 0.719 0.739 0.666 0.670 Public Services 0.636 0.639 0.687 0.670 0.676 1992 1995 1997 2004 2007 Brazil Primary 0.746 0.703 0.720 0.666 0.641 Total VA share Textiles and Clothing 0.508 0.504 0.529 0.478 0.518 Machinery 0.470 0.470 0.464 0.366 0.380 other Manufacturing 0.606 0.620 0.667 0.643 0.701 Trade and Transport Services 1.198 1.084 1.422 2.924 2.956 Commercial Services 23.924 18.104 3.713 3.631 2.696 Public Services 18.294 2.326 0.727 0.734 0.751 Table 13: Relative intensity index based on forward linkages – Brazil 1992 1995 1997 2001 2004 2007 Brazil: Primary 0.278 0.276 0.257 0.238 0.291 0.305 RII Textiles and Clothing 0.047 0.037 0.036 0.029 0.026 0.020 Machinery 0.102 0.090 0.105 0.124 0.096 0.090 other Manufacturing 0.208 0.211 0.205 0.189 0.191 0.183 Trade and Transport Services 0.125 0.154 0.125 0.097 0.154 0.159 Commercial Services 0.240 0.231 0.262 0.314 0.230 0.232 Public Services 0.000 0.001 0.010 0.009 0.012 0.011 22 Table 14: Value added shares of exports by sector – China 1992 1995 1997 2004 2007 China Primary 0.474 0.342 0.366 0.300 0.281 Direct VA share Textiles and Clothing 0.226 0.159 0.240 0.195 0.196 Machinery 0.257 0.210 0.234 0.179 0.183 other Manufacturing 0.260 0.195 0.265 0.257 0.252 Trade and Transport Services 0.509 0.445 0.444 0.492 0.482 Commercial Services 0.633 0.429 0.396 0.523 0.512 Public Services 0.560 0.453 0.441 0.553 0.548 1992 1995 1997 2004 2007 China Primary 1.406 2.114 1.974 2.234 2.554 Total VA share Textiles and Clothing 0.295 0.249 0.428 0.354 0.369 Machinery 0.355 0.365 0.391 0.279 0.290 other Manufacturing 0.515 0.534 0.651 0.753 0.676 Trade and Transport Services 285.847 2.200 1.391 1.551 1.492 Commercial Services 1.030 3.292 4.513 4.738 4.036 Public Services 8.224 1.093 1.050 1.459 1.687 Table 15: Relative intensity index based on forward linkages – China 1992 1995 1997 2001 2004 2007 China: Primary 0.340 0.240 0.221 0.190 0.195 0.184 RII Textiles and Clothing 0.143 0.107 0.166 0.152 0.097 0.087 Machinery 0.079 0.116 0.148 0.173 0.174 0.172 other Manufacturing 0.157 0.199 0.233 0.255 0.247 0.255 Trade and Transport Services 0.088 0.185 0.145 0.127 0.130 0.128 Commercial Services 0.190 0.143 0.081 0.096 0.142 0.160 Public Services 0.005 0.009 0.006 0.007 0.014 0.013 23 Table 16: Value added shares of exports by sector – Korea 1992 1995 1997 2004 2007 Korea Primary 0.415 0.223 0.203 0.119 0.084 Direct VA share Textiles and Clothing 0.208 0.206 0.275 0.270 0.265 Machinery 0.265 0.269 0.270 0.262 0.260 other Manufacturing 0.247 0.251 0.260 0.223 0.194 Trade and Transport Services 0.600 0.587 0.588 0.456 0.436 Commercial Services 0.491 0.476 0.532 0.515 0.498 Public Services 0.695 0.673 0.675 0.686 0.678 1992 1995 1997 2004 2007 Korea Primary 1.431 1.014 0.701 0.563 0.393 Total VA share Textiles and Clothing 0.315 0.326 0.354 0.375 0.380 Machinery 0.359 0.348 0.373 0.358 0.356 other Manufacturing 0.627 0.673 0.634 0.582 0.473 Trade and Transport services 0.997 0.957 0.921 0.800 0.741 Commercial Services 3.522 3.510 2.564 3.193 2.108 Public Services 3.257 1.221 2.361 2.973 3.324 Table 17: Relative intensity index based on forward linkages – Korea 1992 1995 1997 2001 2004 2007 Korea: Primary 0.099 0.049 0.046 0.037 0.037 0.038 RII Textiles and Clothing 0.116 0.075 0.065 0.058 0.034 0.021 Machinery 0.184 0.226 0.259 0.282 0.342 0.348 other Manufacturing 0.227 0.208 0.192 0.188 0.179 0.165 Trade and Transport Services 0.185 0.212 0.175 0.153 0.149 0.148 Commercial Services 0.166 0.187 0.225 0.242 0.212 0.234 Public Services 0.023 0.044 0.038 0.041 0.048 0.046 24 Table 18: Value added shares of exports by sector – United States 1992 1995 1997 2004 2007 USA Primary 0.367 0.364 0.348 0.351 0.314 Direct VA share Textiles and Clothing 0.359 0.371 0.337 0.343 0.345 Machinery 0.453 0.465 0.413 0.328 0.327 other Manufacturing 0.358 0.423 0.390 0.385 0.372 Trade and Transport Services 0.611 0.596 0.586 0.566 0.552 Commercial Services 0.675 0.563 0.592 0.571 0.569 Public Services 0.843 0.777 0.776 0.693 0.688 1992 1995 1997 2004 2007 USA Primary 0.987 0.722 0.667 0.629 0.567 Total VA share Textiles and Clothing 0.537 0.622 0.560 0.566 0.612 Machinery 0.530 0.579 0.512 0.434 0.435 other Manufacturing 0.712 0.890 0.831 0.757 0.713 Trade and Transport Services 1.124 1.189 1.369 1.975 1.834 Commercial Services 2.061 1.908 2.167 1.857 1.671 Public Services 2.120 1.008 1.216 0.875 0.855 Table 19: Relative intensity index based on forward linkages – USA 1992 1995 1997 2001 2004 2007 USA: Primary 0.126 0.085 0.068 0.061 0.074 0.082 RII Textiles and Clothing 0.013 0.016 0.015 0.014 0.013 0.010 Machinery 0.223 0.251 0.246 0.247 0.209 0.196 other Manufacturing 0.146 0.190 0.184 0.193 0.204 0.200 Trade and Transport Services 0.217 0.192 0.179 0.161 0.173 0.166 Commercial Services 0.259 0.230 0.242 0.258 0.283 0.298 Public Services 0.015 0.037 0.066 0.066 0.044 0.048 25 5 Summary Given the dominance of the service sector in most economies, it makes sense that the applied input-output and CGE literature has moved away from an exclusive focus on goods. Much of this literature is focused on cross-section comparisons, benchmarking of openness and shifts in policy regimes, but also recently quantifying the behind the border linkages between services and goods. In this paper, we have taken advantage of recent data from the GTAP database (benchmarked to 2007) and have combined this with earlier releases. As a result, we have a dataset, with a common classi�cation scheme, national input-output linkages, and cross-border linkages through trade for 29 countries and/or regions, and for 24 sectors. These data cover 1992, 1995, 1997, 2001, 2004, and 2007. They offer a unique opportunity to examine the value added linkages between services and goods, and the importance of services, through these linkages, for the total cost structure of traded goods and services. 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Geneva: WTO. 30 Annex Table: value added content of trade globally All trade 1992 1995 1997 2001 2004 2007 Exports relative to gross output value 0.082 0.110 0.119 0.122 0.132 0.142 Direct value added exports relative to GDP 0.064 0.085 0.085 0.086 0.092 0.101 Total value added exports relative to GDP 0.061 0.078 0.080 0.082 0.089 0.195 Gross exports relative to GDP 0.151 0.208 0.221 0.228 0.250 0.274 Direct value added in exports relative to gross exports 0.426 0.407 0.386 0.375 0.366 0.368 Total value added in exports relative to gross exports 0.830 0.783 0.748 0.735 0.723 0.711 Agriculture and Processed Foods 1992 1995 1997 2001 2004 2007 Exports relative to gross output value 0.058 0.091 0.094 0.096 0.118 0.115 Direct value added exports relative to value added 0.058 0.091 0.094 0.096 0.118 0.115 Total value added exports relative to value added 0.117 0.172 0.171 0.186 0.221 0.218 Gross exports relative to value added 0.150 0.233 0.241 0.247 0.297 0.288 Direct value added in exports relative to gross exports 0.395 0.387 0.369 0.370 0.371 0.366 Total value added in exports relative to gross exports 0.781 0.741 0.710 0.753 0.744 0.756 31 Energy and Mining 1992 1995 1997 2001 2004 2007 Exports relative to gross output value 0.120 0.192 0.244 0.233 0.279 0.297 Direct value added exports relative to value added 0.133 0.221 0.289 0.291 0.384 0.413 Total value added exports relative to value added 0.288 0.399 0.480 0.520 0.615 0.644 Gross exports relative to value added 0.312 0.484 0.635 0.669 0.779 0.854 Direct value added in exports relative to gross exports 0.425 0.456 0.455 0.436 0.493 0.484 Total value added in exports relative to gross exports 0.925 0.823 0.756 0.777 0.790 0.754 Textiles, Clothing, Leather 1992 1995 1997 2001 2004 2007 Exports relative to gross output value 0.186 0.254 0.287 0.300 0.345 0.317 Direct value added exports relative to value added 0.174 0.241 0.275 0.295 0.348 0.317 Total value added exports relative to value added 0.251 0.338 0.385 0.433 0.488 0.463 Gross exports relative to value added 0.587 0.809 0.935 1.018 1.224 1.139 Direct value added in exports relative to gross exports 0.296 0.298 0.294 0.290 0.284 0.279 Total value added in exports relative to gross exports 0.427 0.417 0.412 0.426 0.399 0.407 Annex Table: value added content of trade globally – continued Chemicals 1992 1995 1997 2001 2004 2007 Exports relative to gross output value 0.150 0.215 0.238 0.260 0.335 0.345 Direct value added exports relative to value added 0.154 0.222 0.241 0.259 0.355 0.367 Total value added exports relative to value added 0.300 0.388 0.415 0.434 0.532 0.546 Gross exports relative to value added 0.507 0.641 0.763 0.843 1.131 1.216 Direct value added in exports relative to gross exports 0.304 0.346 0.316 0.307 0.314 0.302 Dotal value added in exports relative to gross exports 0.591 0.604 0.543 0.515 0.470 0.449 Metals 1992 1995 1997 2001 2004 2007 Exports relative to gross output value 0.103 0.160 0.186 0.186 0.221 0.258 Direct value added exports relative to value added 0.096 0.149 0.175 0.170 0.214 0.254 Total value added exports relative to value added 0.260 0.343 0.407 0.410 0.473 0.504 Gross exports relative to value added 0.313 0.489 0.616 0.635 0.736 0.912 Direct value added in exports relative to gross exports 0.306 0.304 0.284 0.268 0.291 0.279 Total value added in exports relative to gross exports 0.828 0.702 0.660 0.645 0.642 0.553 32 Transport Equipment 1992 1995 1997 2001 2004 2007 Exports relative to gross output value 0.252 0.280 0.303 0.335 0.377 0.378 Direct value added exports relative to value added 0.257 0.274 0.297 0.329 0.381 0.385 Total value added exports relative to value added 0.294 0.331 0.388 0.424 0.497 0.503 Gross exports relative to value added 0.726 0.885 1.117 1.250 1.542 1.558 Direct value added in exports relative to gross exports 0.355 0.309 0.266 0.263 0.247 0.247 Total value added in exports relative to gross exports 0.405 0.374 0.347 0.339 0.323 0.323 Other Machinery 1992 1995 1997 2001 2004 2007 Exports relative to gross output value 0.271 0.366 0.417 0.426 0.421 0.416 Direct value added exports relative to value added 0.267 0.361 0.406 0.408 0.422 0.422 Total value added exports relative to value added 0.334 0.441 0.503 0.507 0.547 0.551 Gross exports relative to value added 0.676 0.927 1.170 1.217 1.395 1.394 Direct value added in exports relative to gross exports 0.395 0.390 0.347 0.335 0.303 0.303 Total value added in exports relative to gross exports 0.494 0.476 0.430 0.416 0.392 0.395 Annex Table: value added content of trade globally – continued Other Manufactures 1992 1995 1997 2001 2004 2007 Exports relative to gross output value 0.122 0.164 0.170 0.186 0.186 0.190 Direct value added exports relative to value added 0.120 0.160 0.160 0.175 0.179 0.184 Total value added exports relative to value added 0.211 0.271 0.279 0.297 0.313 0.326 Gross exports relative to value added 0.319 0.434 0.460 0.500 0.505 0.523 Direct value added in exports relative to gross exports 0.377 0.369 0.347 0.350 0.355 0.352 Total value added in exports relative to gross exports 0.662 0.625 0.607 0.595 0.620 0.623 Utilities 1992 1995 1997 2001 2004 2007 Exports relative to gross output value 0.002 0.005 0.021 0.020 0.020 0.027 Direct value added exports relative to value added 0.003 0.005 0.021 0.020 0.022 0.029 Total value added exports relative to value added 0.122 0.161 0.212 0.233 0.249 0.265 Gross exports relative to value added 0.005 0.011 0.048 0.041 0.043 0.063 Direct value added in exports relative to gross exports 0.566 0.521 0.436 0.486 0.502 0.455 Total value added in exports relative to gross exports 24.042 15.295 4.440 5.742 5.736 4.186 33 Construction 1992 1995 1997 2001 2004 2007 Exports relative to gross output value 0.002 0.006 0.009 0.007 0.008 0.011 Direct value added exports relative to value added 0.002 0.006 0.009 0.007 0.008 0.011 Total value added exports relative to value added 0.015 0.027 0.032 0.029 0.035 0.038 Gross exports relative to value added 0.005 0.014 0.021 0.016 0.019 0.026 Direct value added in exports relative to gross exports 0.392 0.405 0.422 0.413 0.425 0.418 Total value added in exports relative to gross exports 2.957 1.976 1.482 1.833 1.863 1.472 Trade and Transport Services 1992 1995 1997 2001 2004 2007 Exports relative to gross output value 0.069 0.084 0.078 0.076 0.086 0.094 Direct value added exports relative to value added 0.071 0.083 0.077 0.072 0.076 0.082 Total value added exports relative to value added 0.136 0.172 0.172 0.170 0.186 0.199 Gross exports relative to value added 0.116 0.148 0.140 0.138 0.174 0.194 Direct value added in exports relative to gross exports 0.609 0.565 0.551 0.522 0.436 0.425 Total value added in exports relative to gross exports 1.174 1.161 1.221 1.234 1.068 1.028 Annex Table: value added content of trade globally – continued Other Commercial Services 1992 1995 1997 2001 2004 2007 Exports relative to gross output value 0.025 0.023 0.034 0.038 0.040 0.048 Direct value added exports relative to value added 0.029 0.024 0.036 0.040 0.043 0.051 Total value added exports relative to value added 0.098 0.117 0.133 0.139 0.156 0.168 Gross exports relative to value added 0.047 0.046 0.063 0.071 0.076 0.092 Direct value added in exports relative to gross exports 0.618 0.525 0.574 0.565 0.564 0.558 Total value added in exports relative to gross exports 2.083 2.552 2.099 1.957 2.039 1.829 34 Public Services 1992 1995 1997 2001 2004 2007 Exports relative to gross output value 0.006 0.026 0.017 0.016 0.014 0.014 Direct value added exports relative to value added 0.006 0.025 0.017 0.016 0.014 0.014 Total value added exports relative to value added 0.013 0.043 0.035 0.031 0.028 0.028 Gross exports relative to value added 0.008 0.038 0.024 0.022 0.020 0.020 Direct value added in exports relative to gross exports 0.695 0.651 0.705 0.720 0.683 0.681 Total value added in exports relative to gross exports 1.569 1.139 1.463 1.433 1.390 1.390