Global value chain in east asia
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“Global Value Chain” in East Asia. Michitaka Nakatomi President Japan External Trade Organization(JETRO). Implications of WTO/IDE study. Issues of "global value chains" and "vertical specialization" highlighted

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Global value chain in east asia l.jpg

“Global Value Chain” in East Asia



Japan External Trade Organization(JETRO)

Implications of wto ide study l.jpg

  • Issuesof"globalvaluechains"and"verticalspecialization"highlighted

    • Diversityandcomplementaritiesofproductionnetworkscause"fragmentedvaluechains"

    • The concept of "country of origin" isbecoming increasingly difficult to apply

  • Importanceofloweringtradebarriers

  • Anewtraderegimeis needed,asfirms go beyond national boundaries

The regime should include l.jpg

  • Wider regionalcoverage

  • Universality

  • Eliminationoftradebarriers

    • Freermovementofgoods,services,capital,peopleandtechnologies

  • Contributiontoglobalbusinessactivities

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  • WTOasauniversalregime

    • WTOasaregimeforensuringcompanies'productionsandactivitiesglobally

    • SwiftconclusionofDohaRoundnecessary

  • Aregimethatprovidessolutionstobusinesschallengesisneeded

    • Notonlytariffs,butalsoanti-dumpingrules,tradefacilitation,tradeandinvestment,competitionpolicyandintellectualpropertyrights, of the study:necessitytodealwithNTMs

  • Speed : Business requires a regime which responds quickly to its needs.

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Complementaryregimes for WTO

  • FTAs

    • Bilateral

    • Regional

  • PlurilateralAgreements(suchasITA)

  • Otherbilateralorregionalcooperation

    ⇒ Consistency with WTO rules is required

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  • SupplychainsinEastAsia

    • Deepeningofintra-regionaltrade

    • Thewidespreadsystemofsupplychains

  • Japan'ssupportforWTOregime

    • Only17%ofJapan'stradeiswithFTApartners

    • A multilateral-basedtraderuleisthebestsolution

Major flow of intermediate goods and finished goods in asia electrical electronic l.jpg
Major Flow of Intermediate Goods and Finished Goods in Asia (Electrical/Electronic)

1.6times (23.3←14.4)




6.5times (25.1←4.6)

South Korea








Hong Kong

3.2times (36.7←11.6)


4.9times (21.9←4.5)

9.8times (43.8←4.5)



1.3times (19.1←15.1)

Flow of finished goods

Flow of intermediate goods

2.1times (35.1←16.8)



* Electric/electronic machinery export value (billion USD)

Source: RIETI-TID(2009), White Paper on International Economy and Trade 2010 (METI)

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Japan’s s worldupporttowards the multinationalization of business

Vertical/horizontal integration across borders

1. Promotion of FDI

inward /outward FDI

See next page

2. Trade liberalization

3. Contribution to international

trade rules (ITA, ACTA etc.)

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Japan’s Outward FDI by Country/Region world(International Investment Position, End of 2009)

Total: 740 billion USD

Sources: Prepared by JETRO from Ministry of Finance and Bank of Japan balance of payment and cross-border investment statistics, and Bank of Japan foreign exchange rates.

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Master Plan on ASEAN Connectivity world

  • To build the ASEAN Community by 2015, ASEAN designed a plan focused on Physical Connectivity (transportation, energy, ICT etc.), Institutional Connectivity (trade facilitation, MRAs etc.) and People-to-People Connectivity (tourism, education, culture etc.).

  • ERIA, ADB, UNESCAP and other International Organizations helped the ASEAN Secretariat in drafting the work.

  • The Master Plan was presented at the 17th ASEAN Summit in 2010.

Source: ERIA

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Japan’s support fostering: world

1. Connectivityin soft infrastructure

1) FTAs

E.g. (Completedwith):

Singapore, Malaysia, Thailand, Indonesia, Brunei,

Philippines, Vietnam, ASEAN, India

(Under negotiation with): Korea, Australia

(Under study with): China and Korea, Mongolia,ASEAN+3,


2) Trade facilitation

3) IPR protection, etc.

2. Connectivity in hard infrastructure

Infrastructure development

3. People-to-people connectivity

Human resource development (HRD)

Creating connectivity in ASEAN and with

the surrounding region