What the WTO’s “Made in the World” isn’t

by

The WTO’s “Made in the World” initiative is a data exercise aimed at measuring and analyzing value-added trade flows.

Michele Nash-Hoff, a US manufacturing advocate, misrepresents this statistical exercise as a massive policy change. Her Huffington Post piece is curious because it accurately describes the statistical project and the shortcomings of measuring trade flows in gross terms while simultaneously quoting people out of context to invent the idea that rules of origin may soon be eliminated. (HT: Alex Raileanu)

How would you like to go shopping and find that everywhere you went, the label said “Made in the World” instead of “Made in China,” “Made in India,” “Made in USA” etc.?…

In 2011, Andreas Maurer, chief of the WTO’s International Trade Statistics Section, said “… in the past two or three years there has been huge momentum to get the necessary information” that would be used to rationalize elimination of country of origin labeling.

The World Trade Organization and the European Union moved one step closer to eliminating “country of origin” labeling. On April 16, 2012, the European Commission and WTO held a conference to mark the launch of the World Input-Output Database (WIOD). This new database allows trade analysts to have a better view of the global value chains created by world trade…

Director-General Pascal Lamy has said that “improved measurement and knowledge of actual trade flows will help better understand the interdependencies of today’s national economies, supporting the design of better policies and better trade regulation worldwide.”…

This Initiative could have dire consequences for America’s manufacturers and consumers. For manufacturers, it could eliminate one of the options allowed by the WTO — filing a charge for product “dumping” against another country to have countervailing duties applied against that country. For consumers, “Made in the World” labels wouldn’t allow you to protect your family from the tainted, harmful, and even life threatening products coming from China.

I’m interested in these data initiatives and I have never ever seen such a policy implication suggested. It’s clearly absurd.

If the label said “Made in the World”, one couldn’t know if the product were domestic or foreign, so no trade duties of any sort could apply. Is this what we imagine WTO member countries are headed towards? Eliminating rules of origin would render every preferential trade agreement and preference scheme obsolete by implementing perfectly non-discriminatory trade. The world has never been close to such a policy regime. I’m bemused that Ms Nash-Hoff has managed to turn an exercise in data collection and analysis into a scary free-trade conspiracy.

The WTO’s Andreas Maurer posted in the comments section of the Huffington Post to set the record straight:

Your article refers to another article which stated that “… in the past two or three years there has been huge momentum to get the necessary information” that would be used to rationalize elimination of country of origin labeling. This is not true.
That article by Mr Richard McCormack referred to the WTO’s Public Forum Session in September 2011. But that Session in no way propagated the “elimination of country of origin labelling” and the introduction of a “Made in the World” label. Rather it stated that current international trade statistics do not adequately reflect where value added is created.
Understanding where value is created is very important for business and national policy makers alike, and is the object of intense academic investigation. As your article points out, a research consortium produced a public database last month. In addition, WTO and OECD are jointly working to develop statistics on trade in value added.
But this research project does not affect whatsoever the way country of origin is reported by official statistics collected through customs. There is no intention at all to have the “Made in the World” logo actually appearing on any traded product. This logo only illustrated a statistical concept. Thus the article above misrepresents the objectives of the WTO.

Advertisements

One Response to “What the WTO’s “Made in the World” isn’t”

  1. Brock Haussamen Says:

    This post was helpful. While I didn’t have the impression that Made in the World labels were imminent, I do recall seeing WTO material and maybe a speech by Lamy using the phrase, liking the concept, and not being sure about its exact application.

Comments are closed.