Global Value Chains: The New Reality of International Trade

The phenomenon of global value chains (GVCs) is one of the manifestations of globalisation, which is changing many aspects of economic and trade relations. The policy ramifications of these changes are only now starting to be debated and better understood. Current trade rules were designed for the 20th century, where goods were made and exported either fully or primarily by one country. They may thus be out of synch for disciplining and monitoring current patterns of international trade. Global value chains have brought about important changes for the world trading system, not just in the structure and composition of trade but also in their implications for the role of the WTO. The speed of change in the 21st century is accelerating. More statistical and analytical information on how world trade and investment is being carried out, together with the implications of these changes for individual countries and their trade and development paths, is needed to understand these changes better. At present a gulf exists between the trade policy community in Geneva and the business community at home in dealing with these issues. More dialogue and policy research is needed. This publication is one step in the direction of starting to close the gap between trade and investment practices and the normative framework within which they take place so that it does not widen further.

Tag: Functioning of the WTO, Global Trade & Investment Architecture, Global Value Chains, Industrial Policy, Multilateral, Multinational Enterprise, Negotiations, Poverty & Development, Regional Trade Agreements, Services, Small and Medium-Sized Enterprises