The Impact Of Tariff Reduction On Domestic Value-added Rates

In the evolution of the global division of labor,international trade has undergone interindustry division of labor,intra-industry trade and so on,while global value chain division of labor means a new kind of intra-product division of labor.In terms of trade content,one of the important characteristics of the global value chain is that intermediate goods trade has replaced final goods trade as the main content of international trade.The traditional total trade accounting system has been unable to adapt to the new trade situation and trade characteristics.The export domestic value-added(DVA)and domestic value-added rate(DVAR)based on the value-added trade accounting system are a more accurate measure of a country 's actual trade gains and participation level in the global value chain.Furthermore,in the footsteps of economic globalization,the interests of all economies in the world are constantly infiltrating,and the concepts of balanced development and inclusive development of globalization have emerged.In 2013,China proposed an important initiative to develop the “Belt and Road”,actively promote the integration of regional value chains,and promote trade and investment liberalization and facilitation.Therefore,it is of great practical significance to study how import tariff concessions will affect the export value-added rate of countries along the “Belt and Road”.In terms of empirical methods,this article attempts to measure the domestic value-added rate of exports of the “Belt and Road” economies from a macro perspective,study the impact mechanism of tariff concessions on it,and investigate whether the level of economic development has a regulatory effect on the mechanism.The detailed method is to use the multiregional input-output table of 61 countries along the “Belt and Road” in the Euro database to decompose the total exports based on the KWW(2014)total trade decomposition method to measure DVA and DVAR,and further analyze the impact of trade liberalization on export domestic value-added rate by constructing a panel fixed effect model.The paper finds that,at the overall level,there is a significant positive relationship between the import tariff level of countries and DVAR.In addition that there is a significant negative relationship between the tariff and DVA,which shows that trade liberalization will increase the participation of the global value chain and reduce DVAR of countries along the “Belt and Road”,but at the same time will increase the domestic trade gains and DVA from an absolute scale.In addition,the development level of each country has a positive regulatory effect on this mechanism.In terms of DVA,although the link between the trade liberalization and the distribution of trade profits has been significantly weakened in the post-financial crisis era,this mechanism has remained and has far-reaching influence over the past two decades.At the DVAR level,the mechanism is strengthened,that is,the same level of tariff concessions will bring more losses in the export value added rate.Considering the heterogeneity of countries in different regions,after further grouping and regression,it was found that except for Central Asia,the import tariff of the “Belt and Road” countries in other regions has a significant impact on DVA of exports.The tariff levels of countries in Southeast Asia,Northeast Asia,West Asia and North Africa have no significant impact on DVAR.The import tariff in the “Belt and Road” countries of Central Asia,South Asia,and Central and Eastern Europe have a significant impact on the domestic value-added export rate.This article aims to provide corresponding policy implications for how the “Belt and Road” countries can better participate in the division of labor in the global value chain: Participating in the international division of labor is an effective channel to increase the level of domestic export profits,and can gain more value-added domestic exports through the import-induced export transmission mechanism.However,in the process of advancing trade liberalization and opening to the outside world,it may sacrifice the input ratio of domestic production factors to a certain extent and reduce the domestic value-added rate of exports,so that economic entities will be limited to low-value-added production links.Therefore,when participating in the division of labor in the global value chain,developing countries should pay attention to avoid the "low-end locking" problem,and actively promote industrial upgrading and technological innovation,so as to realize the transition from the low value-added link of the value chain to the high value-added link.