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Symposium 2014

Virtual Library File - Multilateralising 21st-century Regionalism

The Challenge

The Rada Plaza fire in a clothing manufacturing plant in Bangladesh gave the world a sordid picture of the global supply chain at its worst. The owner of the plant became a poster child for GVC (Globa ...

The Rada Plaza fire in a clothing manufacturing plant in Bangladesh gave the world a sordid picture of the global supply chain at its worst. The owner of the plant became a poster child for GVC (Global Value Chain) players in emerging economies—large country-based companies with resources to gather labor pools of low-skilled, poorly-paid workers who are just grateful for any job, even in the most hellish work environment.

Richard Baldwin stresses the changes in the nature of trade as an increasing share of world trade consists of trade in intermediates. This increases – in his opinion - the complexity of trade as it is not just about selling goods but also about making goods. This has triggered a shift in trade governance. As fragmented production networks are strongly regionally embedded, governmental initiatives have shifted to the regional level thereby challenging the importance of multilateral trade agreements. Baldwin ultimately asks what role the WTO will play in the future and closely related, which trade agreement provisions should be harmonized at the multilateral and which at the regional level.