A little over a year ago the OECD and the World Trade Organization (WTO) launched Trade in Value-Added (TiVA), a new database on trade measured in value-added terms. The evidence that we have unlocked using TiVA has begun to revolutionise our understanding of what is happening in global trade, investment and production. Take global value chains (GVCs), which are a dominant feature of the global economy today. Goods produced in the European Union (EU) and exported to the United States may include raw materials from China and Malaysia, and use services from Japan and India. Goods and services are no longer produced by a firm in one country and sold to consumers in another; production is fragmented around the world, while components cross borders multiple times as value is added to output along the way.

In a recent article in the OECD Observer, Vézina and Melin describe how online platforms lower trade barriers and enable micro to small and medium-sized enterprises (SME) to build multinational operations. The contrast with traditional trade is stark, where exporting is normally confined to the largest corporations. Technology is reshaping the international trading landscape, and the changes are real and quantifiable. This is sharpening the role international trade can play in promoting sustainable development.

Small and medium-sized enterprises refers to firms of up to 250 workers each, but did you know that these so-called SMEs make up some 90% of employment in the OECD area? 

©Francois Lenoir/REUTERS

Talks to free up more trade and investment between the European Union and the United States got under way early in 2013. A good agreement in 2014 would be a positive thing, and not just for the EU and the US. Here is why. 

Click to enlarge

Case studies of specific products, particularly in the electronics industry, show that value creation along a global value chain tends to be unevenly distributed among activities. The highest value creation is found in upstream activities, such as the development of a new concept, research and development (R&D) and the manufacturing of key components. But it is also found in downstream activities, such as marketing, branding and customer service.

Though China has recently been a dominant force in trade and investment on the African continent, India and Korea are fast becoming serious challengers. How can African countries make more of these evolving trends? And what role can the traditional partners in the OECD area play?

©Christian Charisius/Reuters

The world economy has become more complex, with global value chains and myriad interconnections among producers across continents. This has an impact on trade and investment policy, as well as on development, and exposes the shortcomings of the usual way of measuring trade.

Will China’s growth slowdown last and what does it mean for the rest of us?

©UK Government Service

The new OECD/WTO database on trade in value-added is not just about changing the numbers, but policymakers’ approaches too. It gives trade fresh importance, and a place high on the agenda of the UK’s G8 presidency. 

©Charles Platiau/Reuters

Getting information and communications “right” has always been a necessary condition for delivering sound policy advice; today, there are many more possibilities to generate and to share evidence-based policy insights, but there are also many more competing messages and messengers. Here are two examples.

Economic data

E-Newsletter

Stay up-to-date with the latest news from the OECD by signing up for our e-newsletter :

Twitter feed

Editor's choice

  • OECD General-Secretary Angel Gurría on Global Economy. Angel Gurría speaks in Brisbane, where the G-20 summit took place this weekend,on Bloomberg Television's "On the Move."
  • Speaking to Dukascopy TV, OECD’s Peter Jarrett says the deficit reduction plans are not to blame for the stagnation of French growth and increase of unemployment.
  • Base Erosion and Profit Shifting (BEPS)
  • Base Erosion and Profit Shifting: "Currently tax planning results in locating the profits in tax havens where nothing is happening. BEPS is rewriting the international tax rules to realign the location of the profits and the real activity."
  • Try our latest OECD Observer crossword!
  • Better Life Index
    How do you measure a Better Life? The OECD has launched a new interactive infographic where visitors can explore the priorities of people worldwide. Be a part of it. Create and share your Better Life Index.
  • Tim Harcourt Video
  • G20 and Australia: Economist Tim Harcourt speaks to the BBC about how Australia has gone from "Down Under to Down Wonder".
  • OECD Week 2014 : Resilient economies for inclusive societies. Forum 2014 was organised around three cross-cutting themes: Inclusive Growth, Jobs, and Trust. Watch the video. And check out our 2014 yearbook by clicking here.
  • better-life
  • What does a better life mean for you? Watch this video produced by students from La Sorbonne and see what people around the world have to say.
  • In the transition to cleaner and greener economies, the OECD is helping government and business with the tools to get climate finance right for greener growth plus job creation, while treating our environment as a precious resource.

Most Popular Articles

Subscribe Now

<b>Subscribe now!</b>

To receive your exclusive print editions delivered to you directly


Online edition
Previous editions

Poll

Is deflation a major risk in OECD economies?

Yes
No
Don't know

OECD Insights Blog

NOTE: All signed articles in the OECD Observer express the opinions of the authors
and do not necessarily represent the official views of OECD member countries.

All rights reserved. OECD 2014