@@ Trade in intermediate inputs accounts for roughly two-thirds of international trade.This input trade reflects the increasing fragmentation of production processes across borders.It also creates two distinct challenges for measuring international interdependence.rnFirst, conventional gross trade statistics tally the gross value of goods at each border crossing, rather than the net value added between border crossings.rnThis well-known "double-counting" problem means that conventional data overstate the domestic value-added content of exports.Using input-output tables for individual G7 countries, existing estimates suggest that the import content of exports is 20%-30% and rising over time.Estimates for countries heavily engaged in processing trade (e.g.China) are on the order of 50%.
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