Global Value Chains in the Atlantic Space

Scientific paper nº. 4

Global value chains (GVCs) have revolutionized trade. Countries no longer have to produce a particular product from scratch; all they must do is insert themselves into an existing chain of production that often spreads across several countries. Nevertheless, insertion into a global value chain has become a real challenge. Economies that are not able to successfully insert
themselves into multiple GVCs are likely to reduce their opportunities for industrialization and economic growth. The purpose of this paper is to investigate the extent to which countries in the Atlantic Space have inserted themselves into GVCs in the past two decades. It draws on an original dataset of trade patterns by stage of production and value added that spans
from 1995 to 2012, collected from the UN COMTRADE databank and the OECD-WTO Trade in Value Added (TiVA) dataset. It finds that despite some interesting cross-country variation, participation in GVCs is still generally low. The paper proceeds as follows. In Section 2, we review the concept of value chain participation and alternative methodologies for measuring it.
Section 3 provides a panoramic view of trade flows in the Atlantic, and Section 4 focuses on empirical evidence of GVC participation in two case studies (Mexico and Brazil). Section 5 briefly assesses the available information on trade in value added in selected countries of the Atlantic space and the last Section concludes.