In the current context of uncertainty in the global trading environment, the need to establish greater linkages within and across a wider array of regions is increasing. Regional and global value chains (RVCs and GVCs) have been an important feature of the global economy through the past two decades and are poised to remain so in the years to come. Since 2008, trade in GVCs has accounted for over 60% of global trade in value-added terms, but their growth has slowed.
Concurrently, the growth of intraregional trade within East Asia and Latin America has stagnated. Intraregional merchandise exports within Latin America as a share of total merchandise exports has declined from its peak of 22% in 1995 to an estimated 17% in 2017. Though the level of intraregional trade in Asia and the Pacific is much higher, accounting for 56% of regional merchandise exports in 2016, its share has remained steady in the past five years.
This slowdown in the growth of intraregional trade and the overall global decline in the growth of merchandise trade volumes speak to the need for FEALAC countries to diversify their mix of products and markets. Through initiatives such as the Pacific Alliance, Latin American countries have demonstrated their desire to increase linkages with each other and the Asia-Pacific region. Bilateral merchandise trade volumes between East Asia and Latin America have more than quadrupled since 2000. Despite a decline in absolute and relative terms since 2013, trade with the Asia-Pacific region accounted for 17% of all Latin American merchandise exports in 2016 while Latin America was the destination of 4% of Asian-Pacific merchandise exports, up from 2% in 2000.
In order to take full advantage of the opportunities afforded by greater market integration, an empirical assessment of the greatest opportunities for insertion into RVCs and GVCs is critical. To understand the potential, analysis of existing economic linkages and value chains are powerful tools that can be used to leverage the complementarities that exist within and across both regions. Building on newly developed resources such as the UN Development Account Project “Input-Output Tables for Industrial and Trade Policies in Central and South America” and the Asian Development Bank “Multi-Regional Input-Output Tables”, the project will assess the potential for the insertion of FEALAC countries into various RVCs and GVCs, thereby promoting structural transformation and integration in and between both regions.
[Technical workshop on "Value chain development for deeper integration of FEALAC: Asian perspectives”]
10 Jul to 11 Jul. Bangkok, Thailand
As part of the project activities, the workshop was held in July. The purposes of the workshop are to review the study in intraregional value chains development and to identify emerging opportunities and challenges facing Asia-Pacific countries in deepening their integration. The reference materials can be found https://www.unescap.org/events/technical-workshop-value-chain-development-deeper-integration-fealac-asian-perspectives.