Project Data Sheet

Project Data Sheets (PDS) contain summary information on the project or program: Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

PDS Creation Date
PDS Updated as of 27 Aug 2014

Project Name Global Supply Chains and Trade in Value Added
Country Regional
Project/Program Number 46196-001
Status Approved
Geographical Location
In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.
Sector Industry and trade
Subsector Industry and trade sector development
Strategic Agendas Inclusive economic growth (IEG)
Drivers of Change
Gender Mainstreaming Categories

Financing

Type/Modality of Assistance Approval Number Source of Funding Approved Amount (thousand)
Technical Assistance8127Technical Assistance Special Fund500
TOTAL US$ 500

Summary of Environmental and Social Issues

Environmental Aspects
Involuntary Resettlement
Indigenous Peoples

Stakeholder Communication, Participation and Consultation

During Project Design
During Project Implementation

Description

Project Rationale and Linkage to Country/Regional Strategy

The international fragmentation of production has created the need for new measures of trade that account for the value that is actually added by a country to the goods or services it exports, net of the imported value of intermediate parts and components (trade in value added). By contrast, traditional trade statistics reflect gross value, thus double-counting the value of intermediates as they cross international borders multiple times. As a result, international trade statistics provide an inaccurate picture of trade involving heavily networked economies. For example, domestic value added is estimated to account for roughly 60 percent of the exports value of People s Republic of China (PRC) while its trade surplus with the United States is thought to be overestimated by about 40 percent . Only by duly accounting for trade in value added (TVA) can ADB research and policy advice be made reflective of the economic and social implications of production networks in the region. Moreover, TVA analysis informs forecasts and estimates on the impact of foreign demand or supply shocks as they propagate through GSC, such as were triggered by recent natural disasters in Japan and Thailand, or such as threats posed to regional growth by the unresolved Euro Area crisis. Analytical issues in relation to GSC and TVA concern mainly the measurement of global supply chains and vertical specialization (the foreign value added embedded within exports). The main approaches are: (i) input-output analysis, associating inputs with industry outputs and identifying the source of those inputs; (ii) defining product categories using some descriptors like parts and components ; (iii) firm level data on foreign inputs, tracking both foreign input purchases and exports by firms have become available; (iv) processing trade data, available for some countries, notably PRC and Mexico, where trade statistics are reported separately for firms that are officially designated as export processing; (v) multinational firm data, especially datasets that provide information on affiliate sales or intra-firm trade. This TA will compare the strengths and weaknesses of these approaches with special reference to Asia s role in GSC. A further issue concerns the assessment of the determinants and structure of GSC. Such analysis typically has used measures of vertical specialization, or value added trade, as the dependent variable in regression analysis focused on understanding if trade of this sort behaves differently from other trade, e.g., is more sensitive to trade costs. The literature is still extremely thin on these issues and this TA can do much to shed light on the drivers and impediments to GSC and TVA in Asia. Finally, there is a key issue concerning offshoring and its effects on firms and labor markets. Such analysis has to rely mainly on firm level data, which is becoming increasingly available. Because these datasets also include firm level characteristics and are in some cases linked to employment databases, analysis can now go much further in understanding why individual firms choose to produce with foreign value added, and how this affects their outcomes, for example in terms of productivity or wages.

Development Impact

DMC policymakers' greater awareness of GSCs in national economic growth and development

Project Outcome

Description of Outcome
GSC TVA book is referred within and outside ADB
Progress Towards Outcome

Outputs and Implementation Progress

Description of Project Outputs
Dissemination of GSC TVA book
Status of Implementation Progress (Outputs, Activities, and Issues)
Progress since Q3 2013: The TA Conference was held in Hong Kong in December 2013 to discuss the final papers. The event was well-attended by trade experts. The manuscript was submitted to the publisher in December 2013. The book publication and book launch will be held in the second half of 2014. Research activities in collaboration with Fung Global Institute are ongoing. Additional country case studies on GSC and TVA were commissioned in Q1 2014. These background papers, together with the text based from the GSC TVA book, will serve as inputs for the Asian Development Outlook 2014 Update theme chapter, to be launched on September 2014.
Status of Development Objectives
Material Changes

Business Opportunities

Date of First Listing 2012 Jul 10
Consulting Services
To be determined
Procurement
To be determined
Procurement and Consulting Notices
http://www.adb.org/projects/46196-001/business-opportunities

Timetable

Concept Clearance 31 May 2012
Fact-finding
Management Review Meeting
Approval 03 Aug 2012
Last Review Mission

Milestones

Approval No. Approval Signing Effectivity Closing
Original Revised Actual
Technical Assistance 8127 03 Aug 2012 03 Aug 2012 31 Aug 2014 30 Jun 2015

Utilization

Date Approval Number ADB (US$ thousand) Others (US$ thousand) Net Percentage
Cumulative Contract Awards
Cumulative Disbursements

TA Amount (US$ thousand)

Approval Number Approved Amount Revised Amount Total Commitment Uncommitted Balance Total Disbursement Undisbursed Balance
Technical Assistance 8127 500 500 320 180 277 223

Contacts and Update Details

Responsible ADB Officer Benno Ferrarini (bferrarini@adb.org)
Responsible ADB Department Economics and Research Department
Responsible ADB Divisions Macroeconomics and Finance Research Division
Executing Agencies

Links

Project Website http://www.adb.org/projects/46196-001/main
List of Project Documents http://www.adb.org/projects/46196-001/documents