Australia’s export potential is all in the supply chain

By Callam Pickering

A new research discussion paper from the Reserve Bank of Australia, International Trade Costs, Global Supply Chains and Value-added Trade in Australia, provides fresh insight into global supply chains and Australia’s export sector, suggesting that Australia is more reliant on the US and Europe than commonly believed.

According to a recent paper, new "value-added trade" estimates "suggest that the US and Europe are more important for export demand than implied by conventional trade statistics, as some Australian content is indirectly exported there via east Asia".

But these exports contained a high share of either imported materials or inputs purchased from other sectors; as a result, manufacturing accounted for just 19 per cent of valued-added trade over that period.

Gross measures of trade typically overstate actual trade flows since goods that cross international borders on a number of occasions — as part of a broader supply chain — are counted multiple times.

Read more here: Business Spectator


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