Kevin Carmichael has an article in the Globe and Mail Economy Lab on the attempts to determine the actual benefits a country derives from international trade:
Currency traders love the monthly import and export data, which provide an excellent guide of how much demand exists for dollars, euros, yen, francs and the like.
But for anyone seeking a more precise understanding of the dynamics of international trade, the data compiled by customs agents are about as about as relevant to a modern economy as carbon paper.
The reason: supply chains. Virtually nothing is produced entirely within a single border anymore. Companies outsource everything from components to packaging. That means a good can cross a border several times on its way to becoming a final product. Each time, it’s value increases. That value is what the customs agent enters in his or her computer. But that inflates the actual contribution of that good to a country’s economy.
It is relatively early days, but some economists are trying to develop a more useful measure of international trade. Among them is the Conference Board of Canada, which Thursday released the first of three reports based on what it calls “value-added trade.” The report should be required reading in Ottawa. Its conclusions challenge much of what we think we know about the nature of Canada’s economy.
