E15_GVCs_Draper Freytag_FINAL_001In this analytical piece Peter Draper and Andreas Freytag, as part of a compilation of papers produced for the E15 Expert Group called Global Value Chains: Development Challenges and Policy Options, set out to better understand the dimensions of GVC’s, the developmental impacts thereof and its implications for the WTO. Some interesting points emerging from the analytical piece is highlighted in the following paragraphs.

Global Value Chains (GVCs) have received increased attention in recent years, and have become a key analytical device given their obvious relevance to economic development strategies. However, the GVC narrative calls for market liberalization at a time when some developing countries are subscribing to the ‘smart industrial policy’ argument as a strategy for development. Consequently, while there is substantial interest in applying the analytical lessons learnt to trade negotiations, especially with reference to the WTO, the global community’s perspectives are divided on the developmental impact thereof.

This division also holds true for the policy agenda associated with the GVC narrative and the desirability of including it into WTO negotiations. Despite the many disagreements the GVC narrative raises there are also cooperative opportunities and common interests arising from it, meaning members might be open for negotiations on certain issues but not others. Thus pursuing ‘negotiations a la carte’ in the WTO context would require a plurilateral approach and related changes in the way the WTO operates. Given the current state of the WTO and increasing preference for regional trade negotiations an earnest effort should be made towards plurilateral negotiating processes supported by concerted deliberation mechanisms linked to WTO processes, if the centrality of the WTO to the global trading system is to be assured.