oecd/wto trade in value added (tiva) indicators united kingdom

OECD/WTO TRADE IN VALUE ADDED (TIVA) INDICATORS
UNITED KINGDOM
The United Kingdom’s domestic value added content of its exports in 2009 was, at 83%, relatively high
compared to other OECD countries and higher than the equivalent figure in 1995 (79%), reflecting the
increasing specialisation of UK exports in services (Fig. 1).
Figure 1: Domestic value added content of gross exports, %
(EXGRDVA_EX)
100%
2009
1995
80%
60%
40%
20%
LUX
SVK
IRL
KOR
HUN
CZE
ISL
NLD
BEL
SVN
FIN
SWE
EST
CHN
PRT
DNK
AUT
ISR
MEX
CHE
POL
DEU
FRA
GRC
IND
TUR
ESP
ITA
CAN
CHL
NZL
GBR
ZAF
NOR
JPN
IDN
AUS
USA
BRA
RUS
0%
For goods, the foreign content of the United Kingdom’s exports was highest in the Transport Equipment
industry (31%) closely followed by the Chemicals and minerals, Basic metals, Machinery and Electrical
equipment industries, where around 25% of the value of exports consists of foreign value added (Fig. 2). The
foreign content in Food products, Textiles and apparel, Wood and paper and Business services fell
significantly however between 1995 and 2009, possibly reflecting the declining importance of these industries
to UK exports.
Figure 2: Foreign value added content of gross exports, by industry, %
Total
Other services
Business
services
Finance &
insurance
Transport &
telecoms
Wholesale &
retail
Other
manufactures
Transport
equipment
Electrical
equipment
Machinery
1995
Basic metals
Chemicals &
minerals
Wood & paper
Textiles &
apparel
Food products
Mining
35%
30%
25%
20%
15%
10%
5%
0%
Agriculture
2009
(EXGR_FVASH)
The share of intermediate imports used to produce exports was highest in Basic metals products (53%);
while around 35% of imported intermediate Mining, Machinery, Transport equipment and Textiles and
apparel products were subsequently being exported (Fig. 3). Shares fell between 1995 and 2009 for quite a
few import categories, notably Electrical equipment, mirroring the significant fall in the industry's share of
overall value added exports (7% in 2009 compared to 14% in 1995).
Figure 3: Share of imported intermediate inputs that are exported, by import category, % (REI)
2009
1995
60%
40%
Total
Other services
Business services
Finance &
insurance
Transport &
telecoms
Wholesale & retail
Utilities
Other
manufactures
Transport
equipment
Electrical
equipment
Machinery
Basic metals
Chemicals &
minerals
Wood & paper
Textiles & apparel
Food products
Mining
0%
Agriculture
20%
Nearly one-fifth of the total value of UK exports of Transport equipment originated in other European
countries, about the same as in 1995 (Fig. 4). However, other European transport equipment manufacturers
contributed less in 2009 (2.5%) than in 1995 (3.0%) while the shares provided by North American transport
equipment manufacturers rose nearly 1 percentage point (pp). The foreign content of UK Transport
equipment provided by business services increased notably too, again driven by an increase in North
American input.
Figure 4: Foreign value added in Transport equipment, by originating region and industry, %
East and S.E. Asia
Europe
North America
Other regions
South America
5.0
4.0
3.0
2.0
1.0
0.0
1995 2009 1995 2009 1995 2009 1995 2009 1995 2009 1995 2009 1995 2009 1995 2009 1995 2009 1995 2009
Mining
Chemicals
& minerals
Basic
metals
Electrical Transport Wholesale Transport & Finance &
equipment equipment and retail telecoms insurance
Business
services
Other
[Figure 4 illustrates how the TiVA infrastructure can be used to focus on the origins of foreign value added in the
output of a particular sector in a particular country].
The UK-US bilateral trade relationship is stronger in value added terms than in gross terms (Fig. 5),
There is more UK value added exported to the US and the US is the UK’s main source of value added
imports. Meanwhile, the importance of nearby trading partners such as Ireland and Netherlands is reduced.
Figure 5a: Exports, partner shares, in gross and value added terms (as a % of total), 2009
Gross exports (EXGRSH)
25.0
Domestic value added in foreign final demand (FDDVASH)
20.0
15.0
10.0
5.0
0.0
USA
DEU
FRA
ITA
ESP
IRL
NLD
JPN
CHN
CAN
BEL
SAU
CHE
AUS
IND
Figure 5b: Imports, partner shares, in gross and value added terms (as a % of total), 2009
Gross imports (IMGRSH)
Foreign value added in domestic final demand (FDFVASH)
20.0
15.0
10.0
5.0
0.0
USA
DEU
FRA
CHN
ESP
ITA
NLD
NOR
JPN
IRL
BEL
RUS
CAN
POL
CHE
The domestic value added embodied in exports and intermediate imports embodied in exports, combine
to reveal notable differences in United Kingdom’s trade balance positions with some of its major trading
partners (as recorded in the OECD-WTO TiVA database). In value added terms an increased surplus with the
United States is apparent for 2009 (Fig. 6). Surpluses with Ireland and Switzerland are smaller however,
partly reflecting the presence of UK output (notably services) in the exports of these countries to third
countries and Irish and Swiss output in UK exports. The UK bilateral trade deficit is smaller with France,
Spain, Norway and China in value added terms than in gross terms, partly reflecting the lower domestic
value added content of these countries' exports relative to the UK.
Figure 6: Bilateral trade balances, USD million, 2009
2009 Gross Trade surplus/deficit (TSGR)
2009 Value Added surplus/deficit (TSVAFD)
20,000
10,000
0
-10,000
-20,000
-30,000
USA
SAU
IRL
AUS
SGP
CHE
FRA
NLD
ESP
DEU
NOR
CHN
In value added terms about 58% of the United Kingdom’s exports reflected services in 2009. This is
higher than the OECD average (48%) driven in large part by the relatively high dependency of the UK on
exports of services products in gross terms (Fig. 7), and was 16 pp higher than in 1995. The service content
of manufactured goods was comparable to other large European economies, at about 30% in 2009 (Fig. 8).
Figure 7: Services content of gross exports, 2009
90.0
Domestic content
80.0
Foreign content
(EXGR_*_SV; SERV_VAGR)
Total 1995
70.0
60.0
50.0
40.0
30.0
20.0
10.0
Foreign service contents
LUX
GRC
ISL
IRL
GBR
BEL
ESP
DNK
FIN
IND
PRT
SWE
ISR
Figure 8: Services content of gross exports, by industry, 2009
AUT
EST
FRA
CHE
USA
ITA
DEU
NZL
TUR
SVN
NLD
POL
JPN
HUN
CZE
AUS
SVK
ZAF
KOR
BRA
CAN
RUS
NOR
CHL
MEX
IDN
CHN
0.0
(EXGR_*_SV; SERV_VAGR)
Domestic service contents
1995 Total
40%
30%
20%
Other
manufactures
Transport
equipment
Electrical
equipment
Machinery
Basic metals
Chemicals &
minerals
Wood & paper
Textiles & apparel
Mining
Agriculture
0%
Food products
10%
The information included in this note is based on the May 2013 release of the Trade in Value Added (TiVA)
database. The data can be accessed from www.oecd.org/trade/valueadded. For further information, please
contact us ([email protected]).