1/5 of manufacturing exports are carry-along trade

One-fifth of all exports by Dutch manufacturers consist of products that are not self-manufactured, but supplied along with their own products, a phenomenon referred to as carry-along trade. This is reported by Statistics Netherlands (CBS) in the latest edition of the Internationalisation Monitor, based on new research into this phenomenon.

In 2016, carry-along trade (CAT) exports by the manufacturing sector amounted to nearly 20 billion euros, against over 15 billion euros in 2010. As a result, the share of CAT in manufacturing exports increased slightly during this period, from just below 18 percent in 2010 to 20 percent in 2016. Around 65 percent of the goods which are exported by manufacturers concerns self-manufacturing. These are the so-called core exports. Approximately 16 percent of manufacturing exports are ‘other exports’; this category includes goods that are not self-manufactured and are exported to other countries than the core or incidental exports.

Two-thirds are core export products

Over two-thirds of CAT exports are part of an industry’s core product range. For example, a certain type of fine-cut tobacco is not produced by the tobacco manufacturer himself but included in his product range. Nearly one-third of CAT exports are products which are not the industry’s core business, but which - combined with the core products - lead to product enrichment. To stay with the example of tobacco manufacturers, these products could be lighters and rolling paper.

Around 35 percent of exporters in manufacturing industries engage in carry-along trade and use it as a structural export strategy. This percentage has hardly changed over time. Close to one-quarter of CAT exports concern re-exports while around three-quarters involve Dutch-manufactured goods. Approximately one-seventh of total manufacturing exports can be attributed to re-exports.

Dutch manufacturing exports (bn euros)
 Core exportsCarry-along tradeOther exports

Majority of CAT exports destined for Germany

The same key export destinations in carry-along trade are seen in total manufacturing exports, in more or less the same proportions, i.e. Germany (20 percent of the total), the United Kingdom (10 percent), Belgium (9 percent), the United States and France (both 8 percent). Germany, the United States and South Korea are more likely than average to be CAT destinations; China less likely than average.

Carry-along trade by destination, 2016 (%)
 Share of destinations in manufacturing CAT exportsShare of destinations in total manufacturing exports
United Kingdom9.79.7
United States7.86.9
South Korea3.92.2

CAT exports relatively most common in pharmaceutical industry

Carry-along trade is largely concentrated in the pharmaceutical industry, in relative terms. CAT exports reaches 34 percent of total exports in this industry, producing packaging for medicinal products for example. CAT is also a frequent phenomenon in the paper and printing industry (33 percent). In the wood and building materials industry and in the metal industry, however, it has a relatively low incidence: 9 and 12 percent respectively.

Carry-along trade by industry, 2016 (%)
 Core exportsCarry-along tradeOther manufacturing exports
Paper and printing40.832.526.7
Electrotechnical and machinery57.82220.1
Food, beverages and tobacco69.621.68.8
Chemical and plastic products63.720.515.8
Textile, clothing and leather79.413.67
Other products63.913.322.9
Transport equipment75.912.811.3
Wood and building materials65.49.525.2