Global value chains offer opportunities for growth, jobs and development, but more must be done so all countries and firms can participate equally, according to a new OECD-WTO-World Bank Group report.
“Global Value Chains: Challenges, Opportunities and Implications for Policy” argues that success in international markets depends as much on the capacity to import high-quality inputs as the capacity to export: in an increasingly inter-connected global economy where more than 70% of trade is in intermediate goods and services, integration into GVCs today will determine future trade and FDI patterns as well as growth opportunities.
The report outlines how the rise of GVCs has produced a new “trade-investment-services-know-how nexus” encompassing trade in intermediate inputs, the movement of capital and ideas and the growing demand for services to coordinate dispersed production locations. It highlights how interconnected economies are today, while pointing out the risk of policies which inhibit participation in GVCs, such as various forms of trade and investment restrictions. It also underscores the need for complementary policies, such as those that boost education and skills, to improve the ability of firms, and in particular those in less developed economies, to participate in and benefit from GVCs.
Access to “Global Value Chains: Challenges, Opportunities and Implications for Policy” here.