Global Value Chains

The book 'Africa in the New Trade Environment; Market Access in Troubled Times' is a collection of articles edited by World Bank renowned economists; Souleymane Coulibaly, Woubet Kassa, and Albert G. Zeufack. The work builds on the expert panel discussions on the future of global trade and its impact on Africa, the theme explored at the World Bank Africa Knowledge Fest on February 22, 2017. The authors make it clear that their goal is ‘to present a strategy to bolster Sub-Saharan Africa’s market access in the current global environment’.

An African-Caribbean Economic Engagement Network is a grand vision of bold design and will not be easy to achieve; however, the fact that it is possible should be cause for optimism.

Global Value Chains (GVCs) are the main form of contemporary transnational capitalism. They are complex legal and financial structures that challenge traditional international-national and public-private dichotomies. They shape and define the speed of work and extraction, build bridges, raise walls, and transform lives and nature in each place where they touch base around the globe. Covid-19, a biological shock that has triggered a legal and economic reconsideration of global markets, has revealed the ecological backbone of value chains and highlighted the need to rethink the premises of competitiveness and cheapness around which they are imagined.

WTO members should revisit the liberalization commitments with a view to engaging in further impact assessments of present and proposed liberalization commitments. More importantly, international and national trade policy makers should welcome new imaginaries of a global digital economy, including the use of trade policy tools to make domestic digital economies competitive at the global stage. This requires a re-conceptualization of the foundations of international trade law, and national tax, competition, property, privacy and data protection laws.

This post engages with the Global Value Chain Development (GVCD) reports co-published by the World Trade Organization and the World Bank. It focuses on one central claim these reports have made about the development-related benefits of firms’ participation in GVCs, and on the policy recommendations that follow. The claim is that by inserting themselves into global value chains (GVCs) and technologically upgrading, firms can move up the value-added ladder and capture a greater share of the economic rewards, thereby also benefiting workers and their states in terms of employment, income and taxation.

This online symposium is the outcome of a workshop on ‘GVCs, Trade and Development’ hosted by the Kent Law School and IEL collective in July 2020 and supported by the British Academy (Grant no. MD19\190020). The workshop engaged with the policy research literature produced by the World Trade Organisation and World Bank since 2013, in particular their Global Value Chain Development (GVCD) reports of 2017 and 2019.

International trade is not free of costs; the dominant view is that the benefits outweigh these costs. Following Ricardo and other free trade enthusiasts, the premise inbuilt in international economic law is that trade is a win-win social activity. Everybody would be better off in the long-run. Meanwhile, the immediate losers could perhaps expect that international economic rules would take their interests seriously, as in making their vulnerability visible or ensuring they receive compensation, particularly when the long-run takes too long to arrive.

This blog aims to present some of the challenges being faced within Africa’s trade landscape and some of the workable policy instruments for overcoming these barriers in the digital post-COVID-19 age. In other words, the broad objective is to propose innovative solutions for enhancing post-COVID-19 economic resilience across businesses and households in a sustainable fashion.

A new economic wisdom seems to be informing the development agenda of international economic institutions, including the World Trade Organisation’s (WTO). The argument is that, although global value chains (GVCs) have existed for a long time, the pace and intensity of global interactions is rapidly changing, consisting of ever more functional ‘fractionalization’ and geographical ‘dispersion’ of production, and so is the nature of trade, with the unprecedented increase in the exchange of components and tasks originating in different parts of the world.

Currently, the world finds itself at a crisis point. The global health pandemic caused by COVID-19 has drastically changed the way we live, how we run our economies and even, how we teach and research IEL. In the post-COVID world, old rules and games may not apply any more. The scholarly interventions presented in the IEL Collective symposia offers tools for a new, pragmatic internationalism – one based on critical reflection, methodological diversity and contributes towards the development of a more holistic landscape of scholarship on law and the governance of the global economy.