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"Assembled in Europe" - the role of processing trade in EU export performance

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Abstract

According to recent analyses, processing trade represents around 50% of total Chinese exports. But processing trade is not just a feature of Chinese trade or other emerging economies. It is also one option that EU trade policy offers to interested companies, subject to a specific set of rules and procedures. If in the case of China processing trade is responsible for half of China's impressive trade performance, what is the role of processing trade in Europe? This column investigates the use and role of processing trade - a trade regime credited as a key driver of Chinese export performance but largely overlooked in Europe - on the overall and sectoral EU trade performance in recent years. It argues that, despite its rather low profile in trade debates, EU exports after inward processing accounted for around 10% of total extra-EU exports in 2011. Given its non-negligible share, processing trade procedures may require further reflection on how to maximize its benefits for EU's external competitiveness.

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  • Cernat, Lucian & Pajot, Michael, 2012. ""Assembled in Europe" - the role of processing trade in EU export performance," DG TRADE Chief Economist Notes 2012-3, Directorate General for Trade, European Commission.
    • Handle: RePEc:ris:dgtcen:2012_003
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    File URL: http://trade.ec.europa.eu/doclib/docs/2012/october/tradoc_150006.pdf
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    Citations

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    Cited by:

    1. Robert C. Johnson, 2018. "Measuring Global Value Chains," Annual Review of Economics, Annual Reviews, vol. 10(1), pages 207-236, August.
    2. Kalina Manova, 2014. "Firms and Credit Constraints along the Global Value Chain: Processing Trade in China," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 15(03), pages 08-11, August.
    3. Cernat, Lucian & Kutlina-Dimitrova, Zornitsa, 2014. "Thinking in a box: A ‘mode 5’ approach to service trade," DG TRADE Chief Economist Notes 2014-1, Directorate General for Trade, European Commission.
    4. Ayçıl Yücer & Jean-Marc Siroën, 2017. "Trade Performance of Export Processing Zones," The World Economy, Wiley Blackwell, vol. 40(5), pages 1012-1038, May.
    5. Kalina Manova, 2014. "Firms and Credit Constraints along the Global Value Chain: Processing Trade in China," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 15(3), pages 08-11, August.
    6. Matthew Grant, 2020. "Why Special Economic Zones? Using Trade Policy to Discriminate across Importers," American Economic Review, American Economic Association, vol. 110(5), pages 1540-1571, May.

    More about this item

    Keywords

    EU TRADE; EU exports; processing trade regime;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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