Latin America and the Caribbean in value chains

Global trade is increasingly being organized around what have been termed "global value chains". The available evidence on global value chains indicates that they work chiefly on a regional basis, since they are concentrated in North America, the European Union and East Asia, with focal points in the United States, Germany and Japan and China, respectively. This trend towards regionalization is due in a large part to the proximity between countries in a given region —which translates into lower freight costs— and the progressive elimination of barriers to cross-border trade under regional integration agreements. This trend towards geographical fragmentation of production creates challenges for the countries of Latin America and the Caribbean, which have thus far found it difficult to carve a niche for themselves in global value chains.

Related Subject(s): Economic and Social Development