Information technology and e-commerce
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Global value chains and employment in developing economies
The emergence of global value chains – whereby goods that used to be produced within one country are now fragmented and distributed across global networks of production – has offered developing countries new opportunities to integrate into the global economy. This has also had fundamental impacts for workers in developing countries. The chapter shows that higher earnings and employment within sectors and firms is associated with GVC integration which also supports other spillovers that operate through labor markets. But it has also had distributional implications of where jobs go and the types of jobs they are. Jobs growth has occurred directly in the export sector as well as indirectly through linkages of exporting firms to domestic input-supplying firms. Employment creation and wage gains have been biased towards more skilled workers in developing countries which contrasts with the predictions of trade theory. The skill-biased nature of GVC trade is associated with increased complexity of global supply chains as well as increased use of skill-intensive inputs notably services. New emerging trends including automation and digitization may further determine how employment in developing countries will be affected by GVC trade in the future. The findings point to education as well as trade and labor policies as important factors for strengthening the GVC-labor relationship.
Recent patterns of global production and GVC participation
Taking advantage of a new accounting method to decompose GDP production into pure domestic production traditional trade simple and complex GVC activities this chapter examines recent trends in global value chain (GVC) activities across the world. Our main findings show that the pace of GVC activities picked up in 2017 after a period of slow down since 2012; intra-North American and intra-European GVC activities declined relative to inter-regional transactions due to higher penetration via Factory Asia but value chains still remain largely regional; China is increasingly playing an important role as both a supply and demand hub in traditional trade and simple GVC networks although the US and Germany are still the most important hubs in complex GVC networks; bilateral trade balances are significantly affected by the supply and demand of third countries; and net imports are no longer a proper measure of the impact of international trade on the domestic economy in the age of GVCs.
Global Value Chain Development Report 2019
This report takes stock of the evolution of global value chains (GVCs) in light of technological developments such as robotics big data and the Internet of Things. It discusses how these technologies are reshaping GVCs and examines the effect of these changes on labor markets in developed and developing economies and on supply chain management. The report discusses how technological developments are creating new opportunities for the participation of small and medium-sized enterprises in global value chains and reviews issues related to GVC measurement. The report is a follow-up to the first Global Value Chain Development Report which revealed the changing nature of international trade when analyzed in terms of value chains and value-added trade.
The ITA and innovation
The general-purpose nature of information technology (IT) means that its widespread use in other economic sectors helps induce organizational and technological innovation throughout the economy. Innovation in IT itself has a magnified effect on economic productivity.
The impact of the trade liberalization brought by the ITA
Participants in the Information Technology Agreement (ITA) significantly liberalized trade in information technology (IT) products by reducing the rates of both the bound (the maximum rate that a WTO member can legally levy on a certain product) and most-favoured nation applied tariffs (those applied in practice by governments).
The ITA Committee: 15 years of encouraging trade
The ITA Committee was established to oversee the implementation of the ITA including to review the product coverage consult on non-tariff barriers (NTBs) consider classification divergences and serve as a forum to work out disagreements between participants.
The road to the Information Technology Agreement
The Information Technology Agreement (ITA) was a landmark trade deal signed by 14 WTO members and states or separate customs territories in the process of acceding to the WTO in December 1996. Not only was it the first sectoral agreement to be successfully negotiated among developed and developing countries but it was also the first one to fully liberalize trade in a specific sector (with an estimated worth of US$ 500 billion a year) after the Uruguay Round.
Global production networks, electronic products and developing countries
Many manufactured goods are now produced with components sourced from several places around the world using international supply chains within global production networks (GPNs). This is particularly the case for most finished electronic products which are not “made in” a single country any more but are rather “made in the world”.
Foreword
Fifteen years ago 28 WTO members and acceding members overcame numerous political and technical obstacles and agreed to work together for the expansion of trade in information technology (IT) products through the Information Technology Agreement (ITA). This landmark agreement demonstrates not only that developed and developing countries can work together in a mutually beneficial manner but also that the WTO could serve as an effective forum to promote trade opening beyond what was achieved during the Uruguay Round.
15 Years of the Information Technology Agreement
The Information and Technology Agreement (ITA) was finalized at the first WTO Ministerial Conference in Singapore in 1996 committing its participants to completely eliminate duties on certain information technology products. In its 15 years the ITA has promoted affordable access to a wide range of technologies encouraging closer cooperation between developed and developing countries. As production networks become increasingly global the ITA will continue to facilitate the shift from products made in a specific country to “made in the world”. To mark the 15th anniversary of the ITA this publication charts the political and technical obstacles which were overcome during the creation of the Agreement and the issues which still need to be resolved. It details the establishment of the ITA Committee and how the Agreement is implemented and investigates the impact the ITA has had on trade liberalization and innovation. The publication also examines the effect information technology has had on global production networks and what this means for developing countries and the ITA.
A Quantitative Assessment of Electronic Commerce
This paper tries to assess quantitatively the role of electronic commerce in economic activity and in trade and tariff revenue collection. The share of value added that potentially lends itself to electronic trade represents around 30 percent of GDP most importantly distribution finance and business services. Electronic commerce is also likely to boost trade in many services sectors significantly. Despite the growing importance of electronic commerce for economic activity and trade tariff revenue loss from electronic commerce is likely to be minimal. Trade in potentially digitizable media goods which currently faces a tariff in some countries represents less than one percent of total world trade. The revenue collected on these products amounts to less than one percent of total tariff revenue in most countries. Even if some of this trade moved “online” tariff revenue loss would be only a very small share of tariff revenue.