GLOBAL VALUE CHAINS

CHALLENGES,

OPPORTUNITIES AND IMPLICATIONS FOR POLICY

OECD Global Parliamentary Network meeting Paris, 2 October 2014 Trudy Witbreuk, Head of the Development Division, OECD Trade and Agriculture Directorate

GVC participation, 1995 and 2009

GVC participation in non-OECD economies

• Y

OECD Trade and Agriculture Directorate 3 OECD (2013) Interconnected economies

Services value-added in gross exports

Jobs in the business sector sustained by foreign final demand, 1995 and 2008

Implications: Trade and Investment Policies

• GVCs are about imports and exports;

• Barriers to import = taxes on exports

• Trade facilitation + efficient services

• Standards

6

OECD Trade Facilitation Indicators

OECD Trade Facilitation Indicators country profile

Countries with high regulatory barriers import less, but also export less services

0%

1%

2%

3%

4%

5%

6%

7%

8%

Air Legal services Insurance Banking

Imports

Exports

OECD Services Trade Restrictiveness Index country profiles

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1

Regulatory transparency

Barriers to competition

Other discriminatorymeasures

Restrictions to movement ofpeople

Restrictions on foreign entry

Average

Minimum

OECD Services Trade Restrictiveness Index

» The STRI provides a snapshot of individual countries, relative to average and best practise

» Allows countries to benchmark,

» …trade negotiators to target bottlenecks,

» …and firms to identify requirements to enter new markets

» The STRI does not prescribe generic solutions,

» …but helps governments to identify opportunities to improve their services policy performance.

The Importance of Complementary Policies

• The efficient functioning of GVCs (hence the participation of countries in GVCs) depends on the easy/smooth circulation of productive resources within GVCs: goods (final and intermediate), services, capital, people, human capital, technology

– Strong social, environmental and governance frameworks and policies

– Sound public institutions

– Competition policy

– Innovation systems

– Financial systems

– Active labour market policies

– Investment in education, skills and training

– Adequate social safety nets

For More Information

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