Global Value Chains and International Trade Dynamics

Abstract

International trade through global value chains (GVCs) has helped the world split production of various goods and services across countries over time, providing a new dimension to globalisation (Gereffi et al., 2001). This has resulted in most products being ‘made in the world’. The story of comparative advantage in production of commodities stands modified as ‘comparative advantage in tasks’ (Blinder, 2006). Today, developing economies have the option of specialising in exportable tasks which could serve as the engine of trade-driven economic growth (Kummritz et al., 2017). Accordingly, trade agreements have proliferated to facilitate trade in parts and components. However, recent de-globalisation trends—including, the US–China trade war, the withdrawal of the USA and India from the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and Regional Comprehensive Economic Partnership (RCEP) agreements, respectively, the muted effectiveness of the WTO’s dispute settlement system and, most recently, the disruption of global trade and supply chains due to the COVID-19 crisis and the ongoing Ukraine crisis—raise questions about the future prospects of GVCs and more broadly about the future of globalisation (Amiti et al., 2019

Baldwin & Tomiura, 2020

Miroudot & Nordström, 2020). There are a number of academic questions that these developments generate, and this special issue entitled ‘Global Value Chains and International Trade Dynamics’ deals with a subset of these questions. We are grateful to the editor, Foreign Trade Review, and his/her team for giving us the opportunity to guest edit this special issue. The six articles included in this special issue may be broadly divided into three specific themes. The first two articles have a global canvas and address questions such as the effect of GVC participation on long-term growth and the effects of deglobalisation on Chinese involvement in GVCs and associated ramifications. The third and fourth articles concentrate on two specific sectors, namely the garment and wearing apparel sector and the automotive sector in India, and examine India’s participation in these sectoral GVCs. The last two articles address questions on the effect of GVC participation on gender- based wage gap and the problems faced by Micro Small and Medium Enterprises (MSMEs) in participating in GVCs. Both the articles are based on experiences in India.