understanding global value chains: insights from recent oecd work javier lopez gonzalez, oecd trade...
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3 What does this mean? Smaller shares of bigger pies…TRANSCRIPT
UNDERSTANDING GLOBAL VALUE
CHAINS: INSIGHTS FROM RECENT OECD
WORKJavier Lopez Gonzalez, OECD Trade and Agriculture Directorate Paris 17th of February 2014
2
• Global value chains (GVCs) are re-shaping global economic activity.
In the early 1990’s G7 countries held 67% of global GDP, by 2010 this fell to around 50%.• Countries are increasingly relying on
foreign value added in order to produce goods.
Background
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What does this mean?Smaller shares of bigger pies…
1995 20090%
10%20%30%40%50%60%70%80%90%
100%
87%
57%
13%
43%
China electrical and optical equipment exports
(share)
Domestic Foreign
1995 2009 -
50.00 100.00 150.00 200.00 250.00 300.00 350.00 400.00 450.00 500.00
19.04
247.75
2.93
183.69
China electrical and optical equipment exports
(value)
Domestic Foreign
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• Sourcing foreign intermediates—the backward linkages:– Increases in productivity– Increases product sophistication of export
bundle– Increases diversification of export bundle
• New opportunities:– Scale effects.– Joining value chains rather than having to
start your own.– Complementarity rather than substitution?
Why should we care about it?
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How has participation evolved in Iraq?
1996 1998 2000 2002 2004 2006 2008 2010 20110%
10%
20%
30%
40%
50%
60%
70%
80%
90%
11% 14%8% 13% 12% 11% 10% 7% 8%
62%
70%
68% 60%51%
44%38%
30%32%
backward forward
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What role for policy?M
oroc
co
Egy
pt
Isra
el
Jord
an
Leba
non
Sau
di A
rabi
a
Tuni
sia
Turk
ey
-0.2
-0.1
0
0.1
0.2
0.3
0.4
Non-policy & constant Trade policy Investment opennnessResidual Total
7
Investment openness
-0.1
0
0.1
0.2
0.3
0.4
0.5
0.6
RW
AB
DI
MD
GK
EN
MU
SD
JIU
GA
ZAF
MO
ZA
GO
ZMB
SA
UTU
RA
RE
EG
YM
AR
TUN
JOR
LBN
NP
LB
TN IND
BG
DP
AK
LKA
MD
VJP
NC
HN
IDN
PH
LM
NG
MY
STH
AV
NM
KH
MB
RN
SG
PH
KG
BFA
NE
RS
EN
GA
BB
EN
TGO
CA
FM
LIC
MR
GIN
NG
AC
IVTC
DC
OG
Backward participation
Actual backward intergartion Contribution associated with investment opennness stance
Esatern and Southrn Africa (ESA)
Middle East and North Africa
(MENA)
South Asia (SAS)
Southeast Asia (SEA)
Western and Central Africa (WCA)
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Other policies?
-0.15 -0.10 -0.05 0.00 0.05 0.10 0.15
Services Trade Restrictiveness IndexProduct M arket Regulation
Technical occupations (share)Access to loans (index)
Unit Labour CostsTertiary graduates (share of workforce)
Institutional qualityFDI restrictiveness Index
R& D expenditureQuality of Electricity supply (index)
Tax rate (total)Broadband subscription (per '000)
Infrastructure, availability and qualityIntellectual property protection (index)Logistics Perform ance Index (custom s)
Standardizedcoefficients
DevelopingHigh-incom eTotal
For more information about OECD work on trade:
• Visit our website: www.oecd.org/trade
• Contact us: [email protected]; [email protected]
• Follow us on Twitter: @OECDtrade
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Trade and Agriculture Directorate