Brexit and German-British Production Chains A Sector-Level Analysis of Value Chains fir tge Year 2017. Bertelsmann Stiftung GED Study March 2019

Sachs, Andreas (2019) Brexit and German-British Production Chains A Sector-Level Analysis of Value Chains fir tge Year 2017. Bertelsmann Stiftung GED Study March 2019. UNSPECIFIED.

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Abstract

What is value-added trade and why is trading with added value important? Value-added refers to the additional value created by a production step. The sum of the value-added of all production steps is equal to the final value of the product. The value created in a specific country as part of an international production chain can be measured. It is also possible to measure the value-added con-tent in imports and exports of intermediates between different countries. These exports and im-ports are also referred to as trade in value-added or value-added trade. Intermediates trade merely captures the final value-added step and additionally assigns all value-added contributions of previ-ous steps to the supplier of intermediates. In an international comparison, countries with a low value-added share in trade are typically countries where simple assembly of intermediate products is carried out. What is the volume of value-added trade between Germany and the United Kingdom? Looking at total trade, Germany imports 115 billion euro worth of goods and services from the United King-dom, including more than 50 percent intermediates. The United Kingdom imports 70 billion euro worth of goods and services, including around two thirds intermediates. Looking at value added alone, both the United Kingdom and Germany import EUR 50 billion worth of goods and services from each other's partners.

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