Anmerkungen:
In: Chapter 4 of the book "Global Value Chain Development Report 2017: Measuring and Analyzing the Impact of GVCs on Economic Development", published by World Bank, IDE-JETRO, OECD, Research Center of Global Value Chains (UIBE) and the WTO, pp. 97-117
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments July 1, 2017 erstellt
Beschreibung:
Global value chains (GVCs) break up the production process so different steps can be carried out in different countries. It will come as no surprise that GVC trade is very vulnerable to trade costs, which are amplified and magnified when production is geographically fragmented. This paper measures international trade costs from the value chain perspective and reviews their implications at the industry, national, and global levels. Trade frictions increase the average production cost by 18% in a single stage of the value chain. Most of the additional expenses result from deficient logistic and trade facilitation conditions, many of which fall under the control of domestic policymakers. Trade costs vary by sector and countries. Benchmarking shows that trade costs on inputs can greatly damage the competitiveness of industries. For instance, the gross margin of motor vehicle industries is 27% lower than the benchmark in average of the 60 countries surveyed. The issue is particularly relevant for developing countries who wish to join value chains and move to higher value-added activities over time. They try to address this problem by establishing draw-back schemes and export processing zones. The paper shows that this is a second-best approach that limits the development of a domestic value chain. A better approach is to improve trade facilitation for all firms in the domestic economy. In GVCs, trade costs are not only damaging for domestic firms, they also affect all trade partners and generate systemic losses. Using network analysis that goes beyond the traditional bilateral dimension of international trade, the paper identifies also where investment in trade facilitation would have the highest social returns from a multilateral perspective