According to a joint international report published this week by the World Trade Organization (WTO), global value chains (GVCs) continued to expand in 2022, as indicated by the growing share of foreign inputs in exports and the increasing participation rates of economies worldwide.

However, the report also flags increasing risks from the dependence on a small number of economies for certain products and highlights the vulnerability of GVCs to rising trade tensions and global crises.

The report provides an update on trends in GVCs with new data extending until 2022, highlighting that GVCs remain a central part of globalization despite mounting pressures. Foreign inputs comprised 28% of global merchandise exports last year, a record level according to the report. Moreover, GVC participation rates of almost all economies were higher in 2022 compared to their pre-pandemic levels in 2018.

The report finds that the export value and share of potential bottleneck products - products that are exported by very few economies - has more than doubled since 2000, from 9% to 19% of total trade, contributing to the vulnerability of GVCs.

The report, titled "GVC Development Report 2023: Resilient and Sustainable GVCs in Turbulent Times", is a joint publication by the Asian Development Bank (ADB), the Institute of Developing Economies - Japan External Trade Organization (IDE-JETRO), the Research Institute for Global Value Chains at the University of International Business and Economics (UIBE) Beijing, and the World Trade Organization.

 

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