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Book (stand-alone)Assessing the impact of trade and other policies on global value chain (GVC) participation, positioning and vertical specialization in agriculture and food
Background paper for The State of Agricultural Commodity Markets (SOCO) 2020
2020Also available in:
No results found.This technical paper includes: A literature review of the impact of trade policies and domestic support measures (for example, subsidies) on global value chain (GVC) participation including the effects of tariffs and non-tariff measures, Regional Trade Agreements (RTAs) and Rules of Origin, as well as recent market developments and trade tensions on GVC linkages. The computation of indicators and decomposition for 18 agri-food sectors and 29 countries and aggregate regions, derived from the most recent (2014) release of the Global Trade Analysis Project (GTAP) database. The description of the modeling and simulation exercises using a Computable General Equilibrium (CGE) Model to analyse the effects of tariffs on GVC participation/positioning on countries and regions, and conduct simulation scenarios to quantitatively assess the effects of trade and other policy changes on GVCs participation (scenarios will include a reduction on tariff levels and trade liberalization). -
Book (stand-alone)A quantitative analysis of trends in agricultural and food global value chains (GVCs)
Background paper for The State of Agricultural Commodity Markets (SOCO) 2020
2020Also available in:
No results found.Over the last decade, increasing international fragmentation of production has affected both trade and production: these activities have become increasingly organized around what is commonly referred to as global value chains (GVCs). Increased fragmentation has brought with it challenges of tracing and measuring international divisions of labor, value-added, and so forth. In fact, conventional measures of trade only measure the gross value of exchanges between partners. They are not able to reveal how foreign producers, upstream in the value chain, are connected to final consumers at the end of the value chain. The aim of this paper is to use a globally consistent set of country-level data on GVC participation positioning in the agri-food sectors to distill global and regional trends in GVC participation between 1995-2015. It also focuses on five selected countries: Brazil, Germany, Ghana, Nepal, and Viet Nam - to illustrate how country-specific characteristics affect GVC participation trends as well as identify major differences across countries. This is the first time such a detailed trend analysis has been carried out for the agricultural and food sectors, with near-universal regional coverage, and covering two decades. The authors suggest that the inter-temporal and cross-country trends identified in this paper can contribute to derive insights into development pathways for low-and middle-income countries, as well as identify how key characteristics of countries will affect the way it uses international trade to boost domestic agricultural productivity growth. -
Book (stand-alone)The effects of global value chain (GVC) participation on the economic growth of the agricultural and food sectors
Background paper for The State of Agricultural Commodity Markets (SOCO) 2020
2020Also available in:
No results found.Trade liberalization has long been advocated as a means to foster growth and welfare. In developing countries, the expansion of global value chain (GVC) participation of agriculture and food sectors could support transformation from a subsistence-oriented and farm-centered system to a commercialized, productive and off-farm centered one. While empirical evidence examining the linkages between GVC participation and economic performance in the agricultural sector has traditionally relied on case studies at the product level, the availability of new aggregate data on trade in value added, now provides an unprecedented opportunity to carry out a global empirical assessment of the linkages. The present paper examines new measures of GVCs participation and positioning from the EORA panel data for the period 1995–2015 (Nenci, 2020) and tests their effects on changes in agriculture value added per worker. The results show that changes in GVC participation are, on average and ceteris paribus, positively associated with changes in agriculture value added per worker, net to time-invariant confounders, whereas mixed results are found on the effects of countries’ positioning along the value chain. In the conclusive remarks, the authors argue that import tariff and non-tariff barriers – including barriers to service trade – should be seen as the first obstacle to increase GVC participation and improve domestic value-added. The presence of signs of heterogeneity by geographical location confirms that general universal recipes do not exist.
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