Increasing efficiencies through a better trade facilitation policy environment remains a critical issue for reducing trade costs and thus promoting competitiveness and increased participation in global value chains. OECD Trade Facilitation Indicators allow countries worldwide to identify concrete areas of action that can help reduce trade costs.
Global value and supply chains
About 70% of international trade involves global value chains (GVCs), as services, raw materials, parts, and components cross borders – often numerous times. A strong trend has emerged towards the international dispersion of value chain activities such as design, production, marketing, distribution, etc. This emergence of GVCs and increased interest in their sustainability and resilience requires analysing supply chains as a whole and developing policies around them.
Key messages
Supply chain resilience is key for economic resilience. Extreme weather events and natural disasters, ongoing geopolitical tensions, regulatory uncertainty, economic fluctuations, the use of export restrictions in critical supply chains and threats of cyber-attacks put pressure on global supply chains. The persistence of these events increases pressure on companies and governments to anticipate, respond and recover from acute external shocks. Understanding supply chain interdependencies is key to enhancing supply chain resilience. The OECD’s Toolkit for Resilient Supply Chains provides policy makers with guidance on how to complement private sector efforts to enhance supply chain resilience.
Conventional measures of international trade do not allow for the measurement and assessment of supply chain trade nor provide an understanding of where value is created. The OECD hosts a variety of datasets and conducts relevant analysis to help address this issue. The OECD Trade in Value-Added (TiVA) dataset is central in this context. Tailored trade flow monitoring exercises and analyses of specific supply chains complement this.
Demand for supply chains to be environmentally and socially sustainable is on the increase. A rich landscape of trade and trade-related policies, voluntary standards and corporate accountability tools is arising to enhance the sustainability of supply chains. The OECD Due Diligence Guidance for Responsible Business Conduct represent a central pillar of this landscape. Trade facilitation can play an important role in greening trade whilst keeping compliance related trade costs at a minimum.
