Brussels, 11/09/2013 (Agence Europe) - A report from the WTO extols the prospects for growth and the progress brought about by participation in global value chains.
Global value chains have become a dominant feature of world trade and offer new prospects for growth, development and jobs - particularly for developing countries - says a new joint report by the OECD, WTO and UNCTAD, which was presented to the G20 leaders in St Petersburg last week. However, effective participation in these chains will require significant new investment in technology dissemination, skill-building and upgrading, warn the three organisations.
According to the report, success in international markets depends as much on the capacity to import high-quality inputs as on the capacity to export - intermediate inputs account for over two-thirds of the goods and 70% of the services traded worldwide. The report states that implementation is now needed, on the multilateral level, of an effective framework for strong, sustainable, balanced and inclusive growth, in which all countries might reap the benefits. The report affirms that the costs of protectionism, and the benefits of multilateral opening in agriculture, manufacturing and services, are much higher in today's interconnected world than previously thought.
Furthermore, the reform in trade facilitation, which is currently being negotiated at the WTO, offers significant potential to reduce trade costs and improve countries' ability to participate in global value chains. Reducing global trade costs by just 1% would increase worldwide income by more than US$40 billion, 65% of which would accrue to developing countries, says OECD Secretary General Angel Gurria.
Nevertheless, open, transparent and predictable trade and investment policies need a range of accompanying policies to ensure that the benefits from global value chains are inclusive. In some developing countries, particularly the less developed, much work therefore remains to be done to address specific obstacles to effective participation in global value chains. Aid for trade initiatives and trade facilitation can play an important role in this work, the report concludes. (EH/transl.fl)