Analyzing the U.S. Content of Imports and the Foreign Content of Exports (2006) / Chapter Skim
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2 Measuring Content Using Input-Output Tables
2 Measuring Content Using Input-Output Tables
Pages 16-48
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From page 16... ...
Currently, the United States records the gross value of exports and makes no adjustment for the fact that some part of the value of exports may have been produced in a foreign country. Likewise, the country currently records the gross value of imports and makes no adjustment for the fact that some of those imports include parts made in the United States.
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From page 17... ...
. counting of domestic output that internal supply chains might create by using a strictly value-added approach.
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From page 18... ...
The traditional accounting approach gives the impression that the United States is trading exports for imports, while the more accurate accounting approach shows the $500 payment for the assembly services provided by Mexico, with no offsetting export payment. These two accounting systems have very different implications for determining the U.S.
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From page 19... ...
imports, no one currently directly keeps track of supply chains inside and outside the United States and these simple adjustments to exports and imports cannot be done. ESTIMATING THE IMPORTS EMBODIED IN EXPORTS One of the committee's central tasks was to determine if there are ways to measure the foreign content of U.S.
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From page 20... ...
An alternative to tracing every detail of the supply chain from imports to exports would be to "tag" imports, electronically or chemically, so that the imported value added would be evident when the export is inspected at the point of exit. Clearly tracking exports and imports on this scale would be an impractical task.
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From page 21... ...
This is done by dividing the total intermediate inputs reported in Table 2-1 into domestic and imported inputs. One can create the import rows for the input-output matrix using the destination matrix (Table 2-3)
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From page 22... ...
Part A: Industries Industriesa Commodities Agriculture Mining Construction Manufacturing Agricultural products 68,682 78 5,860 144,622 Minerals 368 31,478 7,368 81,722 Construction 3,369 4,693 895 28,756 Manufactured products 49,395 14,510 299,429 1,380,590 Transportation, communication, and utilities 12,625 12,652 24,847 179,922 Trade 13,948 3,498 81,671 230,668 Finance, insurance, and real estate 20,647 33,253 16,485 71,167 Services 8,998 5,851 103,708 240,141 Other 166 29 1,076 13,826 Noncomparable imports 64 1,872 22,929 Total intermediate inputs 178,262 107,913 541,338 2,394,342 Value added 105,028 39,826 464,841 1,559,242 Total industry output 283,290 147,738 1,006,179 3,953,584 aThe input-output (I-O) accounts use two classification systems, one for industries and another for commodities, but both systems generally use the same I-O numbers and titles.
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From page 23... ...
Applying the same ratio to $23 billion of total agricultural imports, we estimate $5.7 billion of agricultural intermediate imports sold to farmers and $12.1 billion to manufacturers. Similar calculations for the other sectors lead to the imported inputs by sector of use that are reported in Table 2-4.
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From page 24... ...
Part B: Final Uses Final Uses (GDP) Gross Total Personal Private Changes in Intermediate Consumption Fixed Business Commodities Use Expenditures Expenditures Inventories Agricultural products 24,564 34,596 1,236 Minerals 176,417 105 956 387 Construction 218,971 577,089 Manufactured products 2,260,269 1,078,057 587,174 41,694 Transportation, communication, and utilities 695,452 437,478 17,996 1,250 Trade 453,157 873,411 112,475 5,127 Finance, insurance, and real estate 987,627 1,369,009 51,135 Services 1,458,335 2,010,510 166,967 25 Other 85,574 5,119 48,174 23,409 Noncomparable imports 69,413 47,744 Total intermediate inputs 6,650,777 Value addedd Total industry outputc 5,856,029 1,465,618 73,127 cMay not sum to totals due to rounding.
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From page 25... ...
add up to the totals reported in Table 2-2. Step Two: Estimate the Direct Imports Used to Produce Exports Estimating the inputs used directly to produce exports can then be carried out with the addition of an input-output requirements matrix such
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From page 26... ...
FIRE per 0.6 0.7 0.1 2.5 8.1 1.6 0.1 0.0 29.8 10.3 53.8 46.2 Construction 100.0 (in utilities; and ements inerals 0.1 3.2 9.8 8.6 2.4 4.0 0.0 1.3 M 21.3 22.5 73.0 27.0 100.0 Requir utput utputs 0.1 1.2 4.5 4.9 7.3 3.2 0.1 0.0 communication, O Agricultural 24.2 17.4 62.9 37.1 100.0 tation, Input-O ts inputs impor transpor U.S. oducts products = pr ed youtput 2-2 TCU intermediate added industr TE: TABLE nerals anufactur U rvices Inputs ther oncomparable Agricultural Mi Construction M TC Trade FIRE Se O N Total Value Total NO
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From page 27... ...
Applying this assumption allows one to consider exports as being indistinguishable from production generally. With this assumption the imported intermediate fractions in Table 2-5 can then be used to find the intermediate imports embodied in U.S.
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From page 28... ...
TABLE 2-4 Imports Used to Produce U.S. Output Output Imports Agricultural Minerals Construction Manufacturers Agricultural products 5,739 7 490 12,084 Minerals 127 10,893 2,550 28,279 Construction 0 0 0 0 Manufactured products 10,575 3,106 64,103 295,564 TCU 151 152 298 2,157 Trade 176 44 1,028 2,903 FIRE 81 131 65 281 Services 20 13 235 544 Other 1 0 6 72 NOTE: TCU = transportation, communication, and utilities; FIRE = finance, insurance, and real estate.
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From page 29... ...
29 Total Intermediate TCU Trade FIRE Services Other Outputs 0.1 0.6 4.1 4.4 0.2 87.5 38.2 0.0 0.0 0.0 2.2 128.6 4.7 1.3 6.6 2.9 2.6 21.8 1.8 1.8 0.5 8.8 0.5 58.4 15.7 5.3 4.1 9.4 1.8 54.3 1.0 2.1 0.3 4.4 0.2 29.1 1.6 4.3 17.8 9.7 0.3 39.4 3.9 6.0 5.2 14.5 0.4 39.7 0.3 1.0 2.5 2.2 0.3 7.7 Total Intermediate TCU Trade FIRE Services Other Inputs 13 152 959 1,029 47 20,519 18,117 11 2 11 1,059 61,048 0 0 0 0 0 0 15,090 14,559 4,136 72,991 3,766 483,890 2,409 818 631 1,448 274 8,338 190 411 62 856 33 5,703 159 428 1,758 962 31 3,896 327 497 434 1,203 31 3,304 17 58 146 128 16 443
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From page 30... ...
0.5 0.5 0.1 2.4 8.0 1.6 0.1 0.0 0.0 0.3 0.0 0.0 0.1 0.0 0.0 0.0 (in 23.4 10.3 6.4 Construction utilities; atrix M and inerals 0.0 3.2 7.7 8.5 2.3 4.0 0.0 1.3 0.0 7.4 0.0 2.1 0.1 0.0 0.1 0.0 0.0 M 13.9 22.4 ements Requir 0.1 1.2 4.4 4.9 7.3 3.2 0.1 0.0 2.0 0.0 0.0 3.7 0.1 0.1 0.0 0.0 0.0 communications, Agricultural 22.2 13.7 utput ts tation, impor ts. Input-O oducts products oducts products transpor pr ed pr ed = 2-5 eimpor a ar TCU nerals anufactur U rvices ted ther oncomparable nerals anufactur U rvices ther ws TE: TABLE mestic Agricultural Mi Construction M TC Trade FIRE Se O N Agricultural Mi Construction M TC Trade FIRE Se O Ro a Do Impor NO
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From page 31... ...
And so on and so on. All the stages are added together to get to the direct plus indirect imports embodied in exports.
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From page 32... ...
32 rcent 0.0 1.4 1.1 0.4 0.7 0.0 9.5 Pe 19.1 13.2 140.7 Plus a ts ect 0 37 rect 975 742 302 284 Di Indir Impor 3,738 9,791 69,307 85,175 rcent 0.0 8.2 0.8 0.6 0.2 0.4 0.0 5.7 Pe 10.5 77.1 a estate. ts 0 20 irect 531 442 141 143 real D Impor 2,046 5,364 42,725 51,411 and ts 78 insurance, 1998 Total Expor 6,961 19,563 70,106 70,298 73,154 38,456 93,720 523,300 895,636 finance, Exports, = in Percent 0.0 7.7 87.5 58.4 54.3 29.1 39.4 39.7 61.2 FIRE 128.6 utilities; Embodied ts 0 and 443 Value Intermediate Impor 8,338 5,703 3,896 3,304 20,519 61,049 483,890 587,143 Import ts 0 9,896 8,322 5,783 ts.
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From page 33... ...
ACCURACY AND VALIDITY OF THE CONTENT CALCULATIONS The accuracy of these direct and indirect imports embodied in exports depends on the validity of the similarity assumptions that underlie the calculations. The assumption of similarity of imports and exports with domestic production within the product categories is obviously incorrect if product categories are highly aggregated.
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From page 34... ...
Agriculture, hunting, forestry, and fishing 0.073 Mining and quarrying 0.11 Food products, beverages, and tobacco 0.074 Textiles, textile products, leather, and footwear 0.16 Wood and products of wood and cork 0.12 Pulp, paper, paper products, printing, and publishing 0.061 Coke, refined petroleum products, and nuclear fuel 0.27 Chemicals, excluding pharmaceuticals 0.10 Pharmaceuticals 0.061 Rubber and plastics products 0.088 Other nonmetallic mineral products 0.065 Iron and steel 0.086 Nonferrous metals 0.12 Fabricated metal products, except machinery and equipment 0.095 Machinery and equipment, n.e.c.a 0.093 Office, accounting, and computing machinery 0.25 Electrical machinery and apparatus, n.e.c.a 0.099 Radio, television, and communication equipment 0.15 Medical, precision, and optical instruments 0.086 Motor vehicles, trailers, and semitrailers 0.18 Aircraft and spacecraft 0.12 Iron and steel 0.086 a Not elsewhere classified. SOURCE: Kei-Mu Yi (personal communication)
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From page 35... ...
Third, there is no assurance that the similarity assumptions actually apply with greater accuracy as the product categories are disaggregated.5 Consider now the fourth assumption. It is this last step, the calculation of direct plus indirect import content of exports, that is most troublesome 5Although the mix of imports, exports, and output of the large aggregate manufactures are clearly not the same, this may apply with equal vigor to the components: drugs and household appliances and computers and so on.
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From page 36... ...
Import to Export to Products Output Output Newspapers and periodicals 1.0 2.9 Paperboard containers and boxes 1.4 3.2 Tobacco products 2.2 9.6 Metal containers 2.5 2.0 Other printing and publishing 3.2 3.5 Paints and allied products 4.0 6.7 Heating, plumbing, and fabricated structural metal products 4.0 3.7 Screw machine products and stampings 5.4 5.1 Food and kindred products 6.6 5.1 Cleaning and toilet preparations 7.3 9.1 Miscellaneous machinery, except electrical 7.6 7.2 Petroleum refining and related products 8.5 5.5 Service industry machinery 10.9 13.0 Plastics and synthetic materials 12.0 18.5 Miscellaneous textile goods and floor coverings 12.2 9.5 Broad and narrow fabrics, yarn and thread mills 12.4 8.7 Stone and clay products 13.4 3.1 Other transportation equipment 13.7 9.4 Rubber and miscellaneous plastics products 14.0 7.5 Lumber and wood products 14.1 4.1 Paper and allied products, except containers 14.5 9.2 Agricultural fertilizers and chemicals 15.4 18.8 Industrial and other chemicals 16.6 17.4 Aircraft and parts 17.0 45.0 Primary iron and steel manufacturing 18.3 4.7 Glass and glass products 18.5 10.1 Engines and turbines 19.5 33.4 Scientific and controlling instruments 19.6 23.1 Farm, construction, and mining machinery 19.7 21.9 Miscellaneous fabricated textile products 20.0 3.6 Other fabricated metal products 21.8 11.5 Furniture and fixtures 23.3 6.0 Primary nonferrous metals manufacturing 25.2 11.0 Materials handling machinery and equipment 26.1 15.4 Truck and bus bodies, trailers, and motor vehicle parts 26.6 20.5 Metalworking machinery and equipment 27.1 14.6 Special industry machinery and equipment 28.4 25.8 Electrical industrial equipment and apparatus 29.4 16.0 Electronic components and accessories 30.7 30.2 Household appliances 34.1 13.6
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From page 37... ...
That cannot be a real question, since if the United States did not pay for its imports with exports, and there was a trade balance, then we would have to eliminate all of our imports, including intermediate imports embodied in exports, intermediate imports embodied in domestic production, and imports of final goods. A second question might be: What would happen to U.S.
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From page 38... ...
AND FOREIGN CONTENT OF IMPORTS AND EXPORTS TABLE 2-10 U.S. Imports, Exports, and Imports Embodied in Exports, 91 by 91 Input/Output Matrix, 1998 Total Intermediate Product Imports Imports Percent Livestock and livestock products 2,519 2,461 97.7 Other agricultural products 12,089 8,875 73.4 Forestry and fishery products 8,931 10,364 116.0 Agricultural, forestry, and fishery service 9 8 92.9 Metallic ores mining 1,248 921 Coal mining 326 309 94.7 Crude petroleum and natural gas 61,648 96,294 156.2 Nonmetallic minerals mining 1,201 1,233 102.6 New construction 0 0 Maintenance and repair construction 0 0 Ordnance and accessories 922 7 0.8 Food and kindred products 32,855 12,432 37.8 Tobacco products 1,155 66 5.7 Broad and narrow fabrics, yarn and threads 5,269 5,137 97.5 Miscellaneous textile goods and floor coverings 2,790 1,608 57.6 Apparel 66,035 15,334 23.2 Miscellaneous fabricated textile products 5,923 3,057 51.6 Lumber and wood products 18,124 17,527 96.7 Furniture and fixtures 16,717 3,135 18.8 Paper and allied products, except containers 17,063 14,293 83.8 Paperboard containers and boxes 600 574 95.7 Newspapers and periodicals 274 60 22.1 Other printing and publishing 3,323 2,165 65.1 Industrial and other chemicals 22,458 19,995 89.0 Agricultural fertilizers and chemicals 3,358 2,664 79.3 Plastics and synthetic materials 8,046 7,429 92.3 Drugs 37,954 13,463 35.5 Cleaning and toilet preparations 3,641 687 18.9 Paints and allied products 743 641 86.3 Petroleum refining and related products 14,581 8,194 56.2 Rubber and miscellaneous plastics products 23,872 21,520 90.1 Footwear, leather, and leather products 18,632 9,591 51.5 Glass and glass products 4,333 4,124 95.2 Stone and clay products 9,762 10,108 103.5 Primary iron and steel manufacturing 17,372 19,575 112.7 Primary nonferrous metals manufacturing 21,491 24,142 112.3 Metal containers 325 323 99.4
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From page 39... ...
MEASURING CONTENT USING INPUT-OUTPUT TABLES 39 Direct Plus Total Direct Indirect Exports Imports Percent Imports Percent 907 112 12.4 173 19.0 14,581 353 2.4 721 4.9 2,263 437 19.3 849 37.5 38 0 1.3 1 2.1 1,023 92 9.0 266 26.0 1,396 6 0.4 26 1.9 3,223 4,039 125.3 10,639 330.1 677 54 7.9 117 17.3 0 0 0 69 0 0.0 0 0.0 2,373 1 0.0 1 0.0 25,446 339 1.3 592 2.3 4,943 6 0.1 7 0.1 3,696 470 12.7 688 18.6 2,171 122 5.6 186 8.6 8,085 1,596 19.7 1,701 21.0 1,076 237 22.0 279 25.9 5,224 494 9.5 1,151 22.0 4,283 240 5.6 268 6.2 10,864 666 6.1 1,400 12.9 1,363 45 3.3 71 5.2 768 2 0.2 4 0.5 3,608 59 1.6 154 4.3 23,496 2,331 9.9 4,360 18.6 4,113 280 6.8 471 11.4 12,452 711 5.7 1,404 11.3 11,534 463 4.0 518 4.5 4,528 44 1.0 70 1.5 1,266 36 2.8 60 4.7 9,467 564 6.0 1,021 10.8 12,703 1,898 14.9 2,827 22.3 1,858 1,351 72.7 1,085 58.4 2,375 299 12.6 502 21.1 2,250 196 8.7 454 20.2 4,480 2,230 49.8 4,088 91.2 9,345 3,248 34.8 5,900 63.1 258 20 7.6 32 12.3 continued
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From page 40... ...
0 0 Water and sanitary services 0 0 Wholesale trade 19,182 9,255 Retail trade 0 0
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From page 41... ...
MEASURING CONTENT USING INPUT-OUTPUT TABLES 41 Direct Plus Total Direct Indirect Exports Imports Percent Imports Percent 2,903 132 4.5 206 7.1 2,847 400 14.1 523 18.4 9,485 1,773 18.7 2,797 29.5 9,559 461 4.8 584 6.1 11,176 92 0.8 163 1.5 2,289 50 2.2 106 4.6 5,830 510 8.7 862 14.8 8,830 216 2.5 311 3.5 11,804 1,116 9.5 1,642 13.9 2,817 439 15.6 647 23.0 38,203 5,436 14.2 6,787 17.8 5,087 99 1.9 148 2.9 6,610 1,260 19.1 1,733 26.2 3,060 11 0.3 41 1.3 4,960 299 6.0 513 10.3 20,372 1,690 8.3 2,093 10.3 45,480 10,080 22.2 13,099 28.8 7,320 941 12.9 1,311 17.9 23,589 125 0.5 160 0.7 30,438 2,871 9.4 3,664 12.0 57,158 2,100 3.7 2,553 4.5 4,565 60 1.3 96 2.1 30,992 953 3.1 1,205 3.9 3,976 163 4.1 316 8.0 6,165 590 9.6 936 15.2 4,820 6 0.1 12 0.3 15,214 93 0.6 189 1.2 9,951 246 2.5 396 4.0 29,665 654 2.2 1,047 3.5 3,135 0 0.0 0 0.0 5,597 0 0.0 0 0.0 0 0 0 503 37 7.3 71 14.2 423 0 0.0 0 0.0 67 0 0.0 0 0.0 71,417 818 1.1 1,295 1.8 33 0 0.0 0 0.0 continued
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From page 42... ...
Another question that might be raised concerns the effect of the external deficit on the level and structure of imports and exports of manufactures: If the external deficit causes depreciation of the value of the dollar, which stimulates U.S. exports, how much of the increased value of exports is offset by greater imports of intermediate inputs?
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From page 43... ...
First, one has to find out the level of domestic output directly used to produce exports by multiplying the vector of exports by the domestic rows of the input/output requirements matrix in Table 27. This can be expressed as SD x where SD is the matrix of domestic inputoutput shares and x is the vector of export values.
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From page 44... ...
Bidirectional or Unidirectional Supply Chains It seems logical to assume that after each stage of processing products are changed and the destinations are changed. But the calculation of direct plus indirect inputs assumes that there is no change in the destinations matrix and no change in the input requirements matrix.
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From page 45... ...
. Timing Issues The timing of the imports to produce exports is another potentially important issue since supply chains can be stretched greatly over time.
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From page 46... ...
Although there is no evidence regarding the importance of this timing issue, the study of global supply chains would ideally allow for the fact that supply chains are stretched over time as well as across country borders and the input-output table could be expanded to allow inputs distinguished by year of purchase.6 Price Data and Price Responses Full understanding of global supply chains requires measurement of prices as a product is passed from one stage of processing to another. Any policy change will have price effects, and there is no way to know the response to that change without knowledge of prices and without studies of the responsiveness to price changes of final sales and production methods, including the choice of inputs and the geographical organization of supply chains.
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From page 47... ...
By and large, the existing trade tracking and classification systems do not yet take account of these developments. For example, how can trade in services be tracked when the international trade does not involve a physical carrier medium for the service activity and the service activity is an intermediate and therefore separable from the ultimate consumer.
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From page 48... ...
and U.S.-produced intermediate inputs. The measurement of the U.S.
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