• Archive for February, 2019

    Are Trade Wars Missing the Point? (Part II)

    by  • February 12, 2019 • Faculty Commentary • 0 Comments

    Cho_Sungjoon thumbBy Sungjoon Cho [originally posted on the International Economic Law and Policy Blog on February 12, 2019]


    In the previous post, I introduced main finding of the recent McKinsey report (“Globalization in Transition: The Future of Trade and Value Chains.”)  The report highlighted the growing importance of services and the relative decline of goods production in global value chains (GVCs).  Likewise, GVCs have become more technology and knowledge-intensive.  In addition, “regional” value chains have become prominent as emerging economies mature and are now capable of insourcing more of intermediate products, which they used to import from advanced economies.  Then, what would be possible implications of those new phenomena to the WTO? (more…)

    Are Trade Wars Missing the Point? (Part I)

    by  • February 6, 2019 • Faculty Commentary • 0 Comments

    Cho_Sungjoon thumbBy Sungjoon Cho [originally posted on the International Economic Law and Policy Blog on February 5, 2019]


    The answer might be in the affirmative according to the recent report by McKinsey Global Institute, titled “Globalization in Transition: The Future of Trade and Value Chains.”  Here is a summary of its main findings.

    1. “Goods-producing value chains have grown less trade-intensive.”
    2. “Services play a growing and undervalued role in global value chains.”
    3. “Trade based on labor-cost arbitrage is declining in some value chains.”
    4. “Global value chains are growing more knowledge-intensive.”
    5. “Value chains are becoming more regional and less global.”

    On its face, this report might seem to play the same gloomy tune as “slowbalization.”  However, the McKinsey report does not equate this new phenomenon with the decline of globalization.  On the contrary, it attributes the phenomenon as the economic maturation of emerging economies, such as China, India, Thailand, Malaysia and Indonesia, which are “now consuming more of what they produce.”  By 2030, developing countries’ consumption will exceed a half of global consumption. (more…)