Last month, I wrote
about how digital trade restrictiveness of countries is associated with how
much countries participate in Global Value Chains (GVCs). This follow-up column explains how
digital trade restrictions are also strongly associated with where countries participate in GVCs.
In another blog
post, I made clear that the use of ICT in GVCs is unrelated with the
complexity of value chains. Instead, ICT-intensity of GVCs relates better with
the relative position of industries in value chains. That is, where industries are most active in
GVCs. In fact, industries closer to consumers are often industries that are
also relatively more ICT-intense. They are placed more downstream. Vice versa,
industries that are more upstream often appear less ICT-intense.
Now, this pattern is also
reflected with regards to countries’ digital trade policy framework: countries
that are less restricted across the whole range of digital trade policies are more
active in supply chains that are closer to the final consumer, i.e. more
downstream. On the other hand, countries that are more restricted with digital
trade policies are often trading more in upstream value chains, being further away
from final consumers.
This can be seen in the figure below. The
vertical axis plots a measure of the relative position of countries in their supply
chains. Higher values on this indicator means higher GVC “upstreamness” of countries,
trading more in GVS that are more upstream. The horizontal axis plots ECIPE’s
Digital Trade Restrictiveness Index (DTRI) with higher values reflecting
greater digital trade restrictiveness.
The graph shows that countries such as Indonesia, India, Brazil and Turkey are more restricted regarding digital trade policies whilst also trading more upstream in GVCs. Contrary, countries which are less restricted in digital trade policies are trading more downstream in their supply chains. They are closer to the final destination of the good (or service), i.e. the consumer.
The graph shows that countries such as Indonesia, India, Brazil and Turkey are more restricted regarding digital trade policies whilst also trading more upstream in GVCs. Contrary, countries which are less restricted in digital trade policies are trading more downstream in their supply chains. They are closer to the final destination of the good (or service), i.e. the consumer.
Source: ECIPE; COMPNET
