If trade statistics included the value of intellectual property rights
associated with physical goods, the United States would see an increase in
export capacity and a decrease in the trade deficit.
More and more American multinational corporations are outsourcing the
production and assembly of their products to foreign companies. When they do
so, they derive the largest share of their revenue from the intellectual
property embedded in core technological innovation and brand names. However,
conventional trade statistics are compiled based on the value of goods
crossing national borders, as declared to customs. Generally, the added value
associated with intellectual property rights and embedded in physical goods
is not recorded as either export or import of any country. Hence, current
trade statistics greatly underestimate United States (US) exports and
substantially exaggerate its trade deficit. In this paper, we use the case of
Apple, the largest American consumer products company, to illustrate the
failure of conventional trade statistics to report actual US export capacity
in the age of global value chains. According to our analysis of this case, if
the value added of Apple intellectual property sold to foreign consumers was
counted as part of US exports, total US exports would increase by 3.2%, and
its trade deficit would decrease by 6.4%. In terms of bilateral trade, the
value added under examination here would lower the US trade deficit with the
region comprising the People’s Republic of China; Hong Kong, China;
Taipei,China; and Macau, China by 5.7%, and that with Japan by 7.8%.
https://www.adb.org/publications/global-value-chains-and-missing-exports-united-states
