Title:
1Global Value Chain in East Asia
- Michitaka Nakatomi
- President
- Japan External Trade Organization(JETRO)
2Implications of WTO/IDE study
- Issues of "global value chains" and "vertical
specialization" highlighted - Diversity and complementarities of production
networks cause "fragmented value chains" - The concept of "country of origin" is becoming
increasingly difficult to apply - Importance of lowering trade barriers
- A new trade regime is needed, as firms go beyond
national boundaries
3The regime should include
- Wider regional coverage
- Universality
- Elimination of trade barriers
- Freer movement of goods, services, capital,
people and technologies - Contribution to global business activities
4Importance of WTO
- WTO as a universal regime
- WTO as a regime for ensuring companies'
productions and activities globally - Swift conclusion of Doha Round necessary
- A regime that provides solutions to business
challenges is needed - Not only tariffs, but also anti-dumping rules,
trade facilitation, trade and investment,
competition policy and intellectual property
rights, etc.cf. Chapter IV of the study
necessity to deal with NTMs - Speed Business requires a regime which responds
quickly to its needs.
5Complementary regimes for WTO
- FTAs
- Bilateral
- Regional
- Plurilateral Agreements (such as ITA)
- Other bilateral or regional cooperation
- ? Consistency with WTO rules is required
6Japan's action and global value chains in East
Asia
- Supply chains in East Asia
- Deepening of intra-regional trade
- The widespread system of supply chains
- Japan's support for WTO regime
- Only 17 of Japan's trade is with FTA partners
- A multilateral-based trade rule is the best
solution
7Major Flow of Intermediate Goods and Finished
Goods in Asia (Electrical/Electronic)
US/ Europe
1.6times (23.3?14.4)
5.9times(124.4?21.1)
6.5times (25.1?4.6)
South Korea
1.1times (27.4?24.2)
10.9times (29.4?2.7)
1.8times(8.2?4.7)
Japan
China/ Hong Kong
3.2times (36.7?11.6)
1.6times(8.7?5.4)
4.9times (21.9?4.5)
9.8times (43.8?4.5)
Taiwan
ASEAN
1.3times (19.1?15.1)
Flow of finished goods
Flow of intermediate goods
2.1times (35.1?16.8)
2008?1998
2008?1998
Electric/electronic machinery export value
(billion USD)
Source RIETI-TID(2009), White Paper on
International Economy and Trade 2010 (METI)
8Intra-regional trade percentage in major regions
of the world
9Japans support towards 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.)
10Japans Outward FDI by Country/Region
(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.
11Master Plan on ASEAN Connectivity
- 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
12 Japans support fostering
- 1. Connectivity in soft infrastructure
- 1) FTAs
- E.g. (Completed with)
- Singapore, Malaysia,
Thailand, Indonesia, Brunei, - Philippines, Vietnam, ASEAN,
India - (Under negotiation with) Korea,
Australia - (Under study with) China and
Korea, Mongolia,ASEAN3, -
ASEAN6 - 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