Are Global Value Chains Really Global? Policies to Accelerate Countries’ Access to International Production Networks

The term “global value chain” (GVC) is frequently used to refer to a multi-country process in which different stages of production are carried out in specialised plants in different parts of the world. But casual evidence of this phenomenon suggests that these global linkages might be rather regional, as they seem to concentrate geographically around North America, the European Union, and East Asia, with other countries in the world remaining mostly on the sidelines. This paper seeks to document more systematically whether this is the case and if so, why. Using measures of trade in value added, we first provide evidence on the extent to which GVCs are regionally oriented. Then we ask what forces are shaping the current patterns of trade in GVCs, and, in particular, we examine the role of transport-related factors and trade policy measures. In the light of this evidence, we then assess the policy options for developing countries aiming to improve their participation in cross-border production sharing.

Tag: Global Trade & Investment Architecture, Global Value Chains, Infrastructure, Mega-regionals, Multilateral, Regional Trade Agreements, Regional/Bilateral/Plurilateral, Rules of Origin, Services, Tariffs