Measuring trade in value added

The increasing international fragmentation of production that has occurred in recent decades has challenged the conventional perception and interpretation of trade. Traditional measures of trade record gross flows of goods and services every time they cross borders. In a world characterised by global value chains (GVCs), this leads to what many describe as “multiple” counting of trade, which may in turn lead to misguided policy measures. The OECD-WTO estimates of trade in value added (TiVA) can better interpret trade in a world of GVCs. The TiVA Database can also act as an impetus for the production of national statistics that better reflect global interdependencies.