Ken Kraemer testified before the U.S. International
Trade Commission (USITC) on “The effects of
U.S. company participation in global value chains”
on December 16, 2010 in Washington DC. He presented
the joint work done with Jason Dedrick and Greg
Linden that has been reported in the New
York Times and Wall Street Journal.
Curiously, an article referring to the work
appeared in the WSJ on the day of testimony.
The research shows that Apple clearly garners
the largest share of profits in the supply chain.
The U.S. also gains from Apple’s R&D and
product innovation, which creates high-paying
engineering, technical and managerial jobs in
Apple’s U.S. headquarters and jobs in Apple’s
own retail stores and other retailers such as
The research also shows that U.S. bi-lateral
trade data with China can be misleading. For
example, China is charged with a $150 trade
surplus on the $299 iPod, but that $150 mostly
represents inputs from the U.S., Japan, Korea,
Taiwan and other countries. China simply assembles
the product for a few dollars. There are no
Chinese firms providing inputs to the iPod.
Several articles provide more detailed information
and can be found at the following URLs:
Also testifying with Kraemer before the USITC,
which turned into nearly a four hour session
with the Commissioners questions, were economists
J. Bradford Jensen of Georgetown University
and William Milberg of the New School for Social
Research in New York. The testimony and questions
and answers will be published by the USITC in
the next few months.