Global Trade and International Classifications

The future of international trade statistics

Responding to demands of policy makers for more information on international trade and its relation to global value chains, employment, environment and the interdependence of economies, the participants of the Global Forum on Trade Statistics identify the following points of improvement.

Improve the relevance of international trade statistics by connecting trade information and integrating it with its economic, social, environmental and financial dimensions while minimizing the response burden.

Improve the statistical production process by better defining and organizing the co-operation among national stakeholders

Improve international classifications and correspondence tables relevant for research on international trade and globalization, such as research on trade in value added, on global value chains and on outsourcing of business functions.

Global Business StrategiesProduction Process

Manufacturing Processes

Processing primary goods processing intermediate goods

producing final goods

Import of primary goods

Import of intermediate goods

Import of intermediate processing services

Import of final goods processing services

Support Business FunctionsDistribution and Logistics; Marketing and Sale; ICT Services; Research and Development; Legal and Administrative Services

Import of support business services

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Revision of the Classification by Broad Economic

Categories

(BEC)

Global Value ChainsThe Apple iPod, and Emblematic Case: Low Cost Assembly and Global Sourcing

Regional production systems are nested within global production systems

Designed in Cupertino

Assembled in China

OECD 7

USA CHN

iPhone: $179.00

Assembly: $6.50

2009 US trade balance in iPhones(mio USD)

CHN JPN KOR GER ROW World

Gross -1,901.2 0 0 0 0 -1,901.2

Value added 48.1 -684.8 -259.4 -340.7 -542.9 -1,901.2

Components: $10.75

The iPhone example (Xing and Detert, 2010)The iPhone example (Xing and Detert, 2010)

JPN

KOR

GER

ROW

$60.6

$22.96

$30.15

$48.04

Apple sold 11.3 million iPhones in the USin 2009

Retail price: $500.00(Profit margin: 64%)

Global sourcing and MNC affiliates

Materials

Customers

Suppliers

Price

End Use

Market Modular

LeadFirm

Turn-keySupplier

Relational

Captive Suppliers

Captive

LeadFirm

Component and Material

Suppliers

Hierarchy

IntegratedFirm

LeadFirm

Full-packageSupplier

Component and Material

Suppliers

RelationalSupplierIndustrialized countries

Developing countries

Local MNC affiliates

Exports

9

Classification by Broad Economic Categories (Current version) Basic classes of goods in SNA

1 Food and beverages

11 Primary

111 Mainly for industry Intermediate112 Mainly for household consumption Consumption

12 – Processed

121 Mainly for industry Intermediate122 Mainly for household consumption Consumption

2 Industrial supplies not elsewhere specified

21 Primary Intermediate22 Processed Intermediate

3 Fuels and lubricants

31 Primary Intermediate32 Processed

321 Motor spirit Not classified322 Other Intermediate

4 Capital goods (except transport equipment), and parts and accessories thereof

41 Capital goods (except transport equipment) Capital42 Parts and accessories Intermediate

5 - Transport equipment and parts and accessories thereof

51 Passenger motor cars Not classified52 Other

521 Industrial Capital522 Non-industrial Consumption

53 Parts and accessories Intermediate6 Consumer goods not elsewhere specified

61 Durable Consumption62 Semi-durable Consumption63 Non-durable Consumption

7 - Goods not elsewhere specified Not classified

10

Classification by Broad Economic Categories (Proposed) Basic classes in SNA

1 Food and beverages products

11 Primary

111 Mainly for industry Intermediate112 Mainly for household consumption Consumption113 Multi-purpose goods Not classified

12 – Processed

121 Mainly for industry Intermediate122 Mainly for household consumption Consumption123 Multi-purpose goods Not classified

13 – Services

131 Mainly for industry Intermediate132 Mainly for household consumption Consumption133 Multi-purpose services Not classified

2 Energy products

21 Primary

211 Mainly for industry Intermediate212 Mainly for household consumption Consumption213 Multi-purpose goods Not classified

22 – Processed

221 Mainly for industry Intermediate222 Mainly for household consumption Consumption223 Multi-purpose goods Not classified

23 – Services

231 Mainly for industry Intermediate232 Mainly for household consumption Consumption233 Multi-purpose services Not classified

3 – Transport products

31 Goods

311 Mainly for gross fixed capital formation Capital312 Mainly for industry Intermediate

312a Generic

312b Customized

313 Mainly for household consumption Consumption314 Multi-purpose goods Not classified

32 Services

321 Mainly for gross fixed capital formation Capital322 Mainly for industry Intermediate323 Mainly for household consumption Consumption324 Multi-purpose services Not classified

11

Classification by Broad Economic Categories Basic classes in SNA

4 – Electronic products

41 Goods

411 Mainly for gross fixed capital formation Capital412 Mainly for industry Intermediate

412a Generic

412b Customized

413 Mainly for household consumption Consumption414 Multi-purpose goods Not classified

42 Services

421 Mainly for gross fixed capital formation Capital422 Mainly for industry Intermediate423 Mainly for household consumption Consumption424 Multi-purpose services Not classified

5 – Products not elsewhere classified

51 Goods

511 Mainly for gross fixed capital formation Capital512 Mainly for industry Intermediate

512a Generic

512b Customized

513 Mainly for household consumption Consumption514 Multi-purpose goods Not classified

52 Services

521 Mainly for gross fixed capital formation Capital522 Mainly for industry Intermediate523 Mainly for household consumption Consumption524 Multi-purpose services Not classified

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New Classification for

Business Functions

A value chain describes the full range of activities that firms and workers

carry out to bring a product from its conception to its end use and beyond.

Global Production International SourcingPeter Boegh Nielsen (Statistics Denmark)

CORE FUNCTIONS

SUPPORT

SUPPORT C. FUNCTIONS

15

Core business functionProduction of final goods or services intended for the market or third parties carried out by the enterprise and yielding income. The core business function equals in most cases the primary activity of the enterprise. It may also include other (secondary) activities if the enterprise considers these to comprise part of their core functions.

CPC classes88 Manufacturing services on physical inputs owned by

others854 Packaging services87 Maintenance, repair and installation (except construction)

services89 Other manufacturing services; publishing, printing and

reproduction services; materials recovery services

16

Support business function

• Distribution and LogisticsCPC classes61 Wholesale trade services62 Retail trade services65 Freight transport services671 Cargo handling services672 Storage and warehousing services6791 Freight transport agency services and other freight transport services68 Postal and courier services

• Marketing, sales and after sales services including help desks and call centres

CPC classes83114 Marketing management consulting services836 Advertising services and provision of advertising space or time837 Market research and public opinion polling services83812 Advertising and related photography services85931 Telephone call centre services85962 Trade show assistance and organization services

• Engineering and related technical servicesCPC classes833 Engineering services8391 Specialty design services

17

Support business function

• Distribution and Logistics• Marketing and sales• After sales services including help desks and call centres

• Engineering and related technical services• ICT services• Administrative and management functions• Research & Development

• Procurement• Finance and Accounting• Facility Management

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EBOPS 2010 to CPC, version 2.0

Correspondence Table

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International Trade in service statistics

Service exports/imports Statistics - BOP

FATS statistics

Transactions between residents and non-residents

Transactions between residents

20

Services transactions between residents and non-residents (BPM5)

1. Transportation

2. Travel

3. Communication services

4. Construction services

5. Insurance services

6. Financial services

7. Computer and information services

8. Royalties and license services

9. Other business services

10. Personal, cultural and recreational services

11. Government goods and services

21

Services transactions between residents and non-residents (BPM6)

1. Manufacturing services on physical inputs owned by others

2. Maintenance and repair services

3. Transportation

4. Travel

5. Construction

6. Insurance and pension services

7. Financial services

8. Charges for the use of intellectual property

9. Telecommunications, computer and information services

10. Other business services

11. Personal, cultural and recreational services

12. Government goods and services

Starting from the existing correspondence table between EBOPS 2002 and CPC 1.0, the new correspondence table was established and was subsequently amended in accordance with the text of Chapter 10 of BPM6 and Chapter 3 of MSITS 2010.

References: MSITS 2010, Chapter 3, Section O BPM6, Chapter 10 CPC, version 2.0 (see

http://unstats.un.org/unsd/cr/registry/cpc-2.asp )