Development of Global Trade and Production Accounts: UN SEIGA Initiative
UNSD is developing a handbook on
System of Extended International and Global Accounts (SEIGA)
Statistics to guide policy making has lagged behind dramatic changes in interconnectedness among nations.
- Financial Globalization
- Trade Globalization
- Climate and Environmental Globalization
- Economic Integration
- Digital Globalization – Data and Information Flows
- People Movements Globalization
Efforts are underway to correct data and statistics measurement and collection.
- OECD/WTO Trade in Value Added
- EU/EUROSTAT Multi Country Input-Output Tables
- UN SEEA
- UN SEIGA
- UNECE Global Production
- EUROSTAT FIGARO
- EUROSTAT IGA
From 2014 International Conference on Measurement of Trade and Economic Globalization
Measurement of International Trade and Economic Globalization
In recent years, concerns were raised about the shortcomings of the existing official trade statistics for the purpose of reflecting bilateral economic relations. The high level of import content in exports makes gross bilateral trade statistics unsuitable for bilateral trade negotiations. Trade analysis requires new measures which better reflect the level of interdependencies among countries engaged in global value chains (GVCs). In order to understand the true nature of trade relationships, we need to know what each country along a global value chain contributes to the value of a final product. We also need to know how that contribution is linked to those of other suppliers in other countries coming before and after along the chain, and how much employment and income is generated through this value addition.
The statistical community responded to these concerns through a number of initiatives, such as the UN/Eurostat/WTO Global Forum on Trade Statistics in 2011, the OECD-WTO initiative on Trade in Value-Added launched in 2012, and the 2013 Eurostat report on Global Value Chains. An official response was delivered by bringing the measurement of international trade and economic globalization to the agenda of the UN Statistical Commission in 20131 and again in 20142. The corresponding decisions of the Commission stress the need for a measurement framework and a mechanism for coordination. Specifically, in Decision 44/1063 of its session in 2013, the Commission recognized the need for an overarching measurement framework for international trade and economic globalization, taking into account the existing frameworks and guidelines of the System of National Accounts, Balance of Payments, and the Guidelines on Integrated Economic Statistics, as well as the research and studies done by Eurostat, the OECD, the IMF and various working groups. The Commission also recognized the need for an appropriate mechanism for coordination of the work in this field, ensuring that the functions of the existing expert groups, working groups and task forces are accounted for at the international and regional levels. In the same decision, the Commission agreed to the creation of a “friends of the chair” (FOC) group tasked with preparing a concept paper on the scope and content of the framework, and on the appropriate mechanism for coordination of the work in this area.
The global economy is increasingly structured around GVCs that account for a rising share of international trade, global GDP and employment. GVCs link firms, workers and consumers around the world and often provide a stepping stone for firms and workers in developing countries to integrate into the global economy. A GVC describes the full range of activities that firms and workers perform to bring a product from its conception to end use. This includes activities such as design, production, marketing, distribution and support to the final consumer. The activities that comprise a value chain can be contained within a single firm or divided among different firms. In the context of globalization, the activities that constitute a value chain have generally been carried out in inter-firm networks on a global scale. The dependency structures of the firms in the GVC networks are of crucial importance in order to measure where income, knowledge and employment are generated, and to understand potential risk and vulnerabilities in case of a future financial crisis. Within this changed economic landscape, more complex measures of trade and production are necessary both on micro-and macro-economic level.
In other words, national economies relate to one another in a number of ways be it through trade in goods, trade in services, tourism, foreign direct investment, establishment of foreign affiliates, transfer of knowledge, creation of jobs, redistribution of income, migrant workers, emissions of CO2 or in other ways. A comprehensive way of charting those interdependencies is through a global Supply and Use table (SUT), in which countries connect through imports and exports of goods and services into and out of specific industries. Ideally, the global SUT contains for each international flow an export of a product from an industry of one country into an industry (or into final consumption) of another country, as the corresponding and matching import. In principle, only one global SUT should exist to be used by all national and international agencies for the analysis of trade and globalization. Besides the implicitly mentioned matching of bilateral trade flows (both for goods and services), further refinement may be necessary regarding the use of inputs by type of enterprise for either the domestic or the international market, including the special cases of multi-national enterprises and their foreign affiliates, goods for processing (manufacturing services) and re-exports. Further details on such global SUT were described in a recent paper of the OECD.
Compiling a global SUT requires a very close alignment and harmonization of national SUTs, price statistics and trade statistics. To achieve this in the short term, some practical decisions need to be taken and agreed upon internationally for the creation of a symmetrical and fully balanced bilateral trade matrix at the global level, which would have buy-in, cooperation and endorsement of all concerned countries. This matrix would be built strictly for the purpose of compiling an internationally recognized and accepted SUT. In the longer term, the existing recommendations for international trade statistics would need to be reviewed with the purpose of making them more symmetrical in terms of the reporting of exports and imports, and thus more suitable for the compilation of a global SUT.
A System of International Accounts.
The implications of building a global SUT [for the purpose of deriving, for instance, indicators for Trade in Value Added or Trade in Jobs] are farther reaching than just addressing asymmetries in trade and heterogeneity in firms. The underlying concepts and definitions as basis for measurement of these international statistics would need to be reviewed as well. In terms of the System of National Accounts, the Rest of the World Account would need to be more explicitly defined, especially since a global SUT implies a perfect alignment of international flows, and some international recommendations regarding heterogeneity of firms (where economically relevant). In the longer term, this set of new concepts and definitions could form a System of International Accounts, as the measurement framework for international trade and economic globalization.
From The relevance of multi-country input-output tables in measuring emissions trade balance of countries: the case of Spain
Background and statistical context
The latest meeting of the Group of Experts on National Accounts of the United Nations Economic Commission for Europe (UNECE, 7-9 July 2015), was devoted to data collection and compilation methods in respect to global production activities. It was jointly organized with Eurostat and the Organization for Economic Co-operation and Development (OECD). The meeting was attended by representatives from more than thirty countries worldwide and representatives from the European Commission (EC), International Monetary Fund (IMF), OECD, the United Nations Conference on Trade and Development (UNCTAD), United Nations Statistics Division (UNSD) and World Trade Organization (WTO), among others.
According to the experts at this UNECE meeting, in order to measure global production and global value chains it is no longer sufficient to look only at what a firm does, but to also to consider how the firm does its activities and with whom. For instance, linking business statistics and trade statistics on a micro level should provide new dimensions to the data as long as new balancing challenges at the macro level data (e.g. national accounts). Indeed, statisticians have not always been able to keep up to date with business practices and must find ways to be forward looking and provide the information that meets future policy needs. Traditional measures of trade in goods and services have to be progressively supplemented with information on income and financial flows. Foreign direct investment statistics (FDI) should be further developed and complemented with foreign affiliate statistics (FATS) in order to improve their clarity, usefulness and coverage, and to provide better insights into global value chains.
In this respect, the UNECE Report emanating from this meeting supported new global initiatives, such as the extensions to Trade in Value Added and Global Input- Output Tables (OECD), the construction of the European Multi-Country Input-Output Framework (EC and Eurostat) as well as the elaboration of a new Handbook on a System of Extended International and Global Accounts (UNSD).
Hence, there is no doubt that globalization is currently affecting the way statisticians are measuring national production of countries and international statistical organizations are indeed very busy working on it in order to meet the policy needs at the worldwide level. As national accounts and input-output tables became an integral part of the production activities of national statistical institutes in the past, very soon multi-country and international input-output tables will become a crucial statistical tool to measure global production, trade in value added, environmental footprints and/or employment effects of export activities with official statistics (e.g. carbon footprint estimated by Eurostat).
Bearing all this in mind, we would like to illustrate in this paper the usefulness of global/world input-output tables in measuring the greenhouse gas footprints of individual countries and its external emission trade balance with respect to others. Hopefully, these types of indicators will soon become regularly produced in the future by statisticians using official global input-output tables instead of using other databases produced as one-off projects (e.g. World Input-Output Database, WIOD – http://www.wiod.org).
From 2016 Meeting of the UN Expert Group on International Trade and Globalization Statistics
Following Decision 46/107 taken by the Statistical Commission at its 46th session in 2015, a handbook on a system of extended international and global accounts will be prepared, which will serve as the measurement framework for international trade and economic globalization. This handbook will build on existing work in this area, in particular by the UNECE, the OECD and Eurostat, and address issues of micro-data linking of business and trade statistics, as well as address the integration of economic, environmental and social dimensions of trade and globalization as an extension of the System of National Accounts 2008 (2008 SNA) and the System of Environmental-Economic Accounting 2012 (SEEA 2012).
The first meeting of the expert group is scheduled to take place on 26-28 January 2016 at the UN headquarters in New York. The Handbook is of course the main topic of discussion at this meeting.
The Handbook will refer to and build upon the work of the Friend of the Chair group, which concluded that improved statistics are necessary and should bring a better understanding of the role of the external sector in an economy, the openness of its domestic and foreign markets and the impact of openness on social, economic and environmental upgrading, including the level and quality of employment. More and better data is needed in developed, emerging and developing economies alike: interconnected economies require interconnected statistics and all economies can benefit from a better understanding of these relationships.
As stated in the 2015 FOC report, policymakers and trade negotiators need to understand the cross-country benefits and risks by being able to “look through” the global value chains and see the specific contributions other countries are making to production networks involving their domestic firms. The GVC approach was suggested by the international statistical community as the preferred way of measuring the interconnectedness of economies with respect to jobs, skills, international competitiveness and the creation of value added, income and jobs. The activities involved in GVCs can be grouped into broad stages of production from upstream research and design, through manufacturing, to downstream logistics, marketing and sales. In a GVC, many of the tasks are “offshored”, either through an enterprise’s own affiliates located in foreign countries or through independent contractors. It is this newly emerged international economic integration of production and trade and their governance that has to be better measured and analyzed, including in respect of the benefits, costs and risks associated with engaging in GVCs.
The Handbook can build upon the recommendations and guidelines provided in UNECE’s Guide to Measuring Global Production. This Guide was released at the end of 2015 and provides valuable insights in the functioning and measurement of global value chains. The Guide provides a typology of global production arrangements and describes the principles of ownership inside a multi-national enterprise, as well as ownership of intellectual property products inside global production. In addition, data source and compilation challenges are addressed with special attention to large and complex enterprises.
The Handbook can also build on work presented at the International Conference on Measurement of Trade and Economic Globalization in Mexico in 2014. For example, it could use the value chain reference model to establish alternative aggregations of basic ISIC categories. Those aggregations can be based on enterprise activities in the offshoring of business functions, the use of intermediate inputs, the kinds of basic classes of goods produced and the variety of end markets. The reason for making those distinctions is that it is not possible, in the current ISIC, to distinguish the significant differences between enterprises that operate domestically and those that operate globally. Harmonization of enterprises into groups of similar make-up could significantly improve the accounting structure of the supply and use tables for the analysis of global value chains; harmonization could be achieved in terms of industry, supply chain position, end markets and the extent of the use of business functions being outsourced.
The OECD expert group on extended Supply-Use Tables addresses the estimation methods of trade in value added. The terms of reference of the group states among others that globalization is rapidly changing long-standing assumptions about the relative homogeneity of the production functions (Input-Output technical coefficients) of units classified to a given industrial activity, which is, implicitly, an underlying assumption used in creating input-output based indicators. The increasing prevalence of new types of firms such as factoryless producers and contract processing firms, and the increasing tendency for horizontal, as opposed to vertical, specialization, particularly for multinational affiliates, has fundamentally challenged these assumptions. Therefore, the OECD expert group is looking for the best ways to breakdown firms by specific characteristics (such as involvement in GVCs) which will make the sub-groups more homogeneous.
A GVC approach seems appropriate for the Handbook on a system of extended international and global accounts, since GVCs cut across geographic borders and bring together those global economic activities, goods and services, which belong together. Measurement of economic interdependencies (involving investment, job creation, income and intellectual property) within and across countries — between upstream design and downstream assembly — requires measurement of GVCs. Similarly, if we want to understand the interdependencies within and across countries for global retailers, financial and nonfinancial service providers, as well as horizontally-integrated enterprises, the GVC is the appropriate organizing framework.
This focus on GVCs has important implications for the unit of measurement and related data collection and estimation procedures. Most of the key decisions made by global manufacturers and global service providers are made at the enterprise rather than the establishment, or plant, level. This implies that for multi-national enterprises data on profits, research and development, transfer pricing, final product pricing, design, financing, advertising, and the rest of the links in GVCs are only available at the global enterprise level.
How to Integrate National SUIOTS into Global MCIO tables
- SUTs (Supply and Use Tables)
- GVCs (Global Value Chains)
- UN SEIGA (System of Extended International and Global Accounts)
- UN SEEA (System of Environment Economic Accounts)
- Bilateral Trade Matrix
- TIVA ( Trade in Value Added)
- MCIO (Multi Country Input Output Tables)
- SUIOT ( Supply and Use Input Output Tables)
- UN SNA (System of National Accounts)
- UNSD ( United Nations Statistical Division)
- UNECE ( United Nations Economic Commission for Europe)
- EUROSTAT ( European Statistics Division)
- UNCTAD (UN Conference on Trade and Development)
- WTO ( World Trade Organization)
- UN ITEGS (International Trade and Economic Globalization Statistics)
- WIOD ( World Input Output Database)
- FIGARO (Full International and Global Accounts for Research in
Key Sources of Research:
Global Forum on Trade Statistics
Measuring Global Trade — Do We Have the Right Numbers?
Eurostat Seminar: Global value chains and economic globalization:
The Eurostat initiative
Date: 18th April 2013
International Conference on Measurement of Trade and Economic Globalization
Organized by UNSD and INEGI in cooperation with OECD, WTO and EUROSTAT
UN Economic Commission for Europe (UNECE) Conference
UN Conference on developing System of Extended International and Global Accounts
UN Expert Group on International Trade and Economic Globalization Statistics
Conference November 2016
Global Forum on International Trade Statisticsand Economic Globalization
Proposed Outline for a System of Extended International and Global Accounts
Meeting of the UN Expert Group on International Trade and Globalization Statistics
The relevance of multi-country input-output tables in measuring emissions trade balance of countries: the case of Spain
Teresa Sanz1,∗, Roc ́ıo Yn ̃iguez1 and Jose ́ Manuel Rueda-Cantuche
Handbook for a System of Extended International and Global Accounts (SEIGA)
Overview of Major Issues
November 23, 2015 (Revised)
By J. Steven Landefel
Report of the first meeting of the Expert Group on international trade and economic globalization statistics
Background and context
First meeting of the UN Expert Group on international trade and economic globalization statistics,
26-28 January 2016, New York
Developing A System of Extended International and Global Accounts
Measurement framework for international trade and economic globalization
Group of Experts on National Accounts
18-20 May 2016
Conference of European Statisticians
Group of Experts on National Accounts Fourteenth session
Geneva, 7-9 July 2015
Distr.: General 14 April 2015
Annotated provisional agenda for the fourteenth session
Measuring International Trade and Economic Globalization
Muscat, Oman, Feb 2016
Overview of the Implementation of National Accounts at Global Level
United Nations Statistics Division
Guide to Measuring Global Production
GLOBAL MULTIREGIONAL INPUT–OUTPUT FRAMEWORKS: AN INTRODUCTION AND
Arnold Tukker a b & Erik Dietzenbacher
TRADE IN VALUE-ADDED: CONCEPTS, METHODOLOGIES AND CHALLENGES (JOINT OECD-WTO NOTE)
OECD EXPERT GROUP ON EXTENDED SUPPLY-USE TABLES
TERMS OF REFERENCE
GLOBAL VALUE CHAIN ANALYSIS: A PRIMER
CONNECTING LOCAL PRODUCERS IN DEVELOPING COUNTRIES TO REGIONAL AND GLOBAL VALUE CHAINS – UPDATE
Penny Bamber, Karina Fernandez-Stark, Gary Gereffi and Andrew Guinn
Global Value Chain Analysis on Samsung Electronics
Global Value Chains in official business statistics
Martin Luppes, Statistics Netherlands
Peter Bøegh Nielsen, Statistics Danmark
Global Value Chains and Economic Globalization – Towards a New Measurement Framework
International Corporate Governance Spillovers: Evidence from Cross-Border Mergers and Acquisitions
Rui Albuquerque, Luis Brandao-Marques, Miguel A. Ferreira, Pedro Matos
Trade Linkages, Balance Sheets, and Spillovers: The Germany-Central European Supply Chain
Selim Elekdag and Dirk Muir
THE PRODUCTIVITY ADVANTAGE AND GLOBAL SCOPE OF U.S. MULTINATIONAL FIRMS
Raymond Mataloni, Jr.
Effects of the Crisis on the Automotive Industry in Developing Countries
A Global Value Chain Perspective
Timothy J. Sturgeon Johannes Van Biesebroeck
Value chains, networks and clusters: reframing the global automotive industry
Timothy Sturgeon Johannes Van Biesebroeck and Gary Gereffi
The PhiliPPines in the aUtoMotiVe global ValUe chain
Upgrading and restructuring in the global apparel value chain: why China and Asia are outperforming Mexico and Central America
Combining the Global Value Chain and global I-O approaches
Dr. Stacey Frederick
Employment, Wages, and Poverty following the End of the Multi-fibre Arrangement
Gladys Lopez-Acevedo Raymond Robertson
A measurement framework and a narrative on global value chains and economic globalization
Merja Hult and Pekka Alajääskö
Timothy J. Sturgeon
TRADE INTERCONNECTEDNESS: THE WORLD WITH GLOBAL VALUE CHAINS
Global Value Chains
Global value chains
GLOBAL VALUE CHAINS AND Development
INVESTMENT AND VALUE ADDED TRADE IN THE GLOBAL ECONOMY
Competing in Global Value Chains
EU Industrial Structure Report 2013
Global Value Chains: Development Challenges and Policy Options
Proposals and Analysis
Global Value Chains: The New Reality of International Trade
World Investment Report 2013: Global Value Chains: Investment and Trade for Development
Global Production Networks: Theorizing Economic Development in aninterconnected world
By Neil M. Coe, Henry Wai-Chung Yeung
TRADE IN VALUE ADDED (TIVA) INDICATORS GUIDE TO COUNTRY NOTES
TRADE IN VALUE-ADDED: CONCEPTS, METHODOLOGIES AND CHALLENGES
(JOINT OECD-WTO NOTE)
Global value chains in a changing world
Edited by Deborah K. Elms and Patrick Low
GLOBAL VALUE CHAINS IN A POSTCRISIS WORLD
Olivier Cattaneo, Gary Gereffi, and Cornelia Staritz
Making Global Value Chains Work for Development