value-added trade

Value-added trade refers to the process where countries import raw materials or intermediate goods, transform or process them through manufacturing, and then export the finished or more developed products. This process increases the economic value of the original materials, contributing more significantly to a country's economy. For example, a country might import raw steel, use it to produce cars, and then export those cars. The difference in value between the raw input and the final product reflects the added value created during processing and manufacturing. This concept highlights how countries can benefit from specialized production and global supply chains.