The contribution of regional integration to production integration

Value chains are rapidly gaining traction worldwide as a means of organizing production. In that context, the governments of Latin America and the Caribbean have identified strengthening production integration as a priority in their development agendas and in their regional integration agreements. Although there is no single definition of regional production integration, it is usually understood as a process by which the production of goods or services is shared between two or more countries in the same geographical area. The aim is to exploit the production complementarities between the countries involved and promote the participation of SMEs and, in general, companies based in relatively less developed countries. Thus, along with the improved efficiency normally associated with value chains, production integration also has broader aims relating to social and territorial development. With the right policies, production and development asymmetries can be reduced between the members of an integration scheme, as well as within countries.

Related Subject(s): Economic and Social Development
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