Global Value Chains and World Trade

Prospects and Challenges for Latin America

image of Global Value Chains and World Trade

The analysis of how Latin American and Caribbean economies participate in different segments of GVCs is at the heart of the current work agenda of the Economic Commission for Latin America and the Caribbean, which focuses on how structural change and productivity gains can promote economic development with equality. This volume builds on the relevant literature and suggests that the movement of firms to higher value added activities in GVCs requires them to step up their innovation efforts and develop new products and processes. Success in improving market shares and value added will depend, however, on which firms innovate most. Hence, innovation is a necessary but insufficient for increasing value added and market shares. Evidence suggests that since the 2008 economic crisis, the participation of Latin America and the Caribbean in global production networks has increased.



Economic integration and value chains case study: Dairy products in Central America

Central America has the oldest and deepest integration process in the Americas. It has evolved from a process of market integration into a broader process that includes a degree of social integration and some common political and judicial institutions. However, trade matters are still the core of the integration since this is the only arena in which there is agreement between all Central American countries. Since 1960, the region has been opening internal trade to most regional products, and today 95.7% of total goods are covered by a harmonized external tariff and can be freely traded within Central America.


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