Getting Better Value Out of Global Value Chains

Abstract

Global value chains (GVCs) have provided Asia's emerging economies with a fast track to development. The GVC for Apple's iPhone is analyzed. Despite the benefits of participating in GVCs, most Asian countries are still capturing very little value from GVCs. Greater efforts are required to open markets and strengthen human capital, and technological and innovative capacities. President Trump's decision to withdraw the US from the Trans-Pacific Partnership (TPP), his rejection of multilateral trade and his protectionism will undermine the further development of Asia's GVCs. There is no sign that any Chinese efforts, such as through the Regional Comprehensive Economic Partnership, would be an effective replacement for the TPP. Asian governments need to more actively promote socially responsible GVCs in order to foster decent middle-class societies.