ADB urges Asia to take advantage of global value chain opportunities

Sep 26, 2014 (LBO) – Asian economies, having reaped substantial gains from global value chains in the past 25 years, can extend these gains if governments and business work together to reduce tariffs and non-tariff trade barriers, and improve logistics and transport infrastructure, says a new Asian Development Bank (ADB) report. •GVCs thrive only where tariffs are low and predictable. Authorities can make tariffs more predictable by normalizing trade relations with partners, lowering bound tariffs under the World Trade Organization (WTO), and avoiding temporary trade measures. Low and predictable rates for other taxes, including value-added taxes collected at the border, also benefit GVCs.

•Better logistics and transport infrastructure may cut trade costs even more than tariff reduction. Delays in moving goods from inland factories to the coast, through customs facilities, or through ports themselves add to shipping costs. Infrastructure investment can ease port congestion and speed inland transport. Streamlining customs procedures to eliminate paperwork further trims shipping times. International cooperation—such as investment in regional transport corridors or WTO trade facilitation—can complement national efforts.

•Process and product standards are necessary for GVC operations and to safeguard public heal