Trade in Value Added (TiVA)
Contents
Unlocking the Complexity of Trade in Value Added (TiVA)
Deciphering TiVA Methodology
Trade in Value Added (TiVA) serves as a pivotal statistical tool, offering insights into the intricate web of value creation in global supply chains. Unlike traditional trade statistics, TiVA delves deeper into the origins of value added, shedding light on the contributions of each country and industry in the production of goods and services for international trade.
Unraveling TiVA Indicators
TiVA indicators, jointly developed by the Organization for Economic Cooperation and Development (OECD) and the World Trade Organization (WTO), provide policymakers with a nuanced understanding of commercial relations between nations. By tracing value added through various stages of production to final exports, TiVA illuminates the interconnectedness of global value chains (GVCs) and addresses the challenge of double or multiple counting prevalent in traditional trade metrics.
OECD's Role in Advancing TiVA Measures
The OECD plays a pivotal role in enhancing TiVA methodology, leveraging insights from trade policy analysis, investment policy evaluation, and developmental strategies. Through initiatives like the Inter-Country Input-Output (ICIO) system, the OECD facilitates a comprehensive assessment of economic globalization, encompassing factors such as trade-induced job creation, skills development, and carbon emissions.
Illustrating TiVA in Action: The Apple Example
The manufacturing journey of Apple products epitomizes the complexity of global value chains. From design in the U.S. to assembly in China, with inputs sourced from diverse countries, the production process involves a multitude of stakeholders. TiVA's accounting framework enables a granular examination of value added at each stage, transcending geographical boundaries and providing a holistic perspective on international trade dynamics.