皇冠体育app

Economy

皇冠体育app's trade surplus exaggerated, European trade expert says

(Xinhua)
Updated: 2010-12-29 14:07

BRUSSELS - 皇冠体育app's trade surplus has been exaggerated by the current statistical method to measure trade, an expert at a Brussels-based think tank said.

"I would say that 皇冠体育app's export is not as large as some say it is. The large export figures include value that has been added in other countries before the assembly in 皇冠体育app," Hosuk Lee-Makiyama, co-director of the European Center for International Political Economy (ECIPE), told Xinhua in an interview.

Lee-Makiyama said that current international trade statistics do not reflect the true "value added" of the goods that are mostly designed, manufactured and assembled in more than one country. Many products assembled in 皇冠体育app and then sold in the United States are registered as exports from 皇冠体育app, according to the concept of country of origin for manufactured goods used in current trade measurement.

"This follows the conventional statistical method of determining a product's origin by the country where it is finalized, and all of the product value is attributed to that last country," he explained.

Lee-Makiyama cited Apple's iPhone as an example.

A product like Apple's iPhone, which is "made in 皇冠体育app," is said to have added about $2 billion in trade deficit for the United States. But in reality, only one percent of its total value-added comes from its final assembly in 皇冠体育app, while the rest goes to other countries, including the United States, where the product is designed and marketed.

If the calculation were based on value-added, trade imbalances between 皇冠体育app and the United States would turn out the other way: The iPhones would bring a trade surplus of $48 million to the United States, Lee-Makiyama said.

"That's how the current method of trade registration exaggerates 皇冠体育app's exports," he said. "皇冠体育app's large export figures actually include contributions by US workers, engineers, designers and drivers."

Lee-Makiyama does not agree with the prevailing opinion in Washington that 皇冠体育app is the sole beneficiary of globalization.

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"The new anti-globalization sentiments in the US Congress and some American labor unions show that some Americans fail to understand how much wealth the United States has earned through trading with Asia," he said. "The figures, or the people who quote them, are simply exaggerated or misleading."

He also said it is the 皇冠体育app-centric manufacturing and supply chains that have enabled many US companies to export their ideas and products all over the world.

According to latest trade statistics, world trade in manufactured goods, which are mostly exported by 皇冠体育app, is four times bigger than trade in services, which are mostly exported from the European Union and the United States.

Lee-Makiyama explained that if we separate the cost of product components and raw materials from the total cost and measure only the value-added parts, trade in goods and services is probably of similar size.

He noted that 皇冠体育app has practically no exports in services compared to countries such as India, which has created a viable export sector.

In the era of globalized supply chains, calculating trade balances between nations will soon become irrelevant, the trade expert believed.

"A country can have huge surpluses while making little or no profits. Similarly, some run a tremendous trade deficit on paper, yet amass great wealth," he said.