The views expressed in this presentation are the views of the author and do not necessarily reflect the
views or policies of the Asian Development Bank Institute (ADBI), the Asian
Development Bank (ADB), its Board of Directors, or the governments they represent. ADBI does not guarantee the accuracy of the data included in this paper and accepts no
responsibility for any consequences of their use. Terminology used may not necessarily be consistent with ADB official terms.
ASEAN in the Global
Value Chains
The 8th OECD-AMRO-ADB/ADBI-ERIA
Asian Regional Roundtable on Macroeconomic and Structural Policies
Tokyo, 13 - 14 February 2020
Disclaimer: No part of this presentation should be cited, distributed, and/or reproduced without prior written consent from the ASEAN Secretariat
ASEAN has strong regional dimension to GVCs
Origin of value added in exports – Backward participation (2014)
In 2014, 32.7% of the
value added in ASEAN
Member States’ (AMS)
exports was sourced from
abroad, nearly half of
which came from Asian
partners, including intra-
ASEAN.
Source: Baseline Report on Key Policy
Areas Related to Global Value Chain,
ASEAN Secretariat, internal document
(2018); data from OECD TiVA (2017)
ASEAN’s domestic value added share increased by 3.8% since 2000..
Changes in backward participation (2000 to 2014)
Source: Baseline Report on Key Policy Areas Related to Global Value Chain, ASEAN Secretariat, internal document (2018); data from OECD TiVA (2017)
..and growing forward participation from 18% in 2000 to 21% in 2014
GVC participation by region (2000 to 2014)
Backward Forward 2000
0.45
0.4
0.35
0.3
0.25
0.2
0.15
0.1
0.05
Source: Baseline Report on Key Policy Areas Related to Global Value Chain, ASEAN Secretariat, internal document (2018); data from OECD TiVA (2017)
ASEAN’s GVC participation has also significant contribution to employment..
Employment content of exports - share (2011)
84.1% of ASEAN
workers engaged in
producing exports
are employed
domestically, while
the value added in
exports being
domestic is 67.3%.
Source: Baseline Report on Key Policy Areas Related to Global Value Chain, ASEAN Secretariat, internal document (2018); data from OECD TiVA (2017)
Although GVC participation vary across ASEAN, positive trends have been
observed in all ASEAN Member States (AMS)
Backward Forward 2000
0.6
All AMS have seen
either their forward
0.5
or their backward
participation in
0.4 GVCs grow between
2000 – 2014
0.3
0.2
0.1
0
SGP MYS THA VNM BRN KHM PHL IDN
Source: Baseline Report on Key Policy Areas Related to Global Value Chain, ASEAN Secretariat, internal document (2018); data from OECD TiVA (2017)
GVC participation depend strongly on industrial specialization
ASEAN GVC participation by sector relative to
ASEAN aggregate GVC participation by sector
the rest of the world
Backward Forward 2000 Backward Forward
0.7 0.8
0.6 0.6
0.5
0.4
0.4
0.2
0.3
0
0.2
0.1 -0.2
0 -0.4
Source: Baseline Report on Key Policy Areas Related to Global Value Chain, ASEAN Secretariat, internal document (2018); data from OECD TiVA (2017)
Enhancing ASEAN’s GVC participation: policies matter …
Securing entry to GVCs Expanding participation in Upgrading within GVCs and
GVCs creating new GVCs
• Hard infrastructure: • Competitive environment • Building innovative, human
connectivity, energy and • Open services sector backed and firm capital
logistics by strong and enforceable • Governance and intellectual
• Domestic regulatory reforms regulation (including financial property protection
• Trade and investment services) • Harmonization of rules and
liberalization and trade • Preferential trade agreements standards with international
facilitation to support regional integration norms
• Soft infrastructure: education • Openness to FDI and
and training to increase imported technology
absorptive capacity of firms
and workers, ICT development
Source: UNESCAP (2015)
Enhancing ASEAN’s GVC participation: role of regional initiatives
• Enhancing participation in GVCs identified in AEC Blueprint 2025, Characteristic 1 (Highly
Integrated and Cohesive Economy, Element A6 (Enhancing Participation in Global Value
Chain).
• Element A6 fully recognises the contribution of other Elements in the Blueprint to enhance
GVC participation, such as:
• Trade facilitation;
• Standards harmonisation and compliance;
• Connectivity;
• Elimination/reduction of NTMs; and
• Domestic regulatory reform.
• Element A6 is operationalised under the ASEAN Work Plan for Enhancing the GVC Agenda
2016 – 2025, adopted at the 48th ASEAN Economic Ministers’ Meeting in 2016.
Priority Areas under ASEAN’s GVC Work Plan
• Enhance participation and upgrading in GVCs by creating an enabling policy
environment
➢ to sharpen ASEAN's understanding of the complex inter-linkages that make GVCs work
so as to equip ASEAN to develop policies aimed at increasing participation and
upgrading in GVCs
• Improve statistics and analytical capacity in support of GVC related activities
➢ to expand the data and analytical capacity of ASEAN
• Improve trade in services within GVCs
➢ to facilitate the smooth-functioning of GVCs through the promotion of competitive
domestic service sectors
• Make GVCs inclusive by promoting SME and AMS engagement
➢ to ensure that the gains of GVC participation are shared within and between ASEAN
countries
• Facilitating readiness for tomorrow’s GVCs
➢ to be forward looking and be able to better adapt to changing production paradigms
Enhancing ASEAN’s GVC participation through strengthening cooperation
with partner countries including China, Japan and Korea
FTAs/CEPs Entry Into Force Coverage/Key Areas
ACFTA Framework Agreement (2003), Trade in Goods, Services, Investment,
Goods (TIG) (2005), Dispute Settlement DSM, and Economic
Mechanism (DSM) Agreement (2005) Cooperation
Trade in Services (TIS) (2007),
Investment (2010)
AJCEP Framework Agreement (2003), AJCEP, Goods, Services, Investment,
and Investment (2008) Economic Cooperation, DSM
AKFTA Framework Agreement (2005), DSM Goods, Services, Investment,
Agreement (2006), TIG (2007), TIS Economic Cooperation, DSM
(2009), Investment (2009)
Positive trends recorded in ASEAN total trade with China,
Japan and Korea
600 30% from 2010 – 2018,
25% ASEAN total trade
500
20% with China, Japan
400 15% and Korea grew at
10% an annual average of
300
5% 9.4%, 0.7% and
200 0% 5.9% respectively.
-5%
100
-10%
0 -15%
2011 2012 2013 2014 2015 2016 2017 2018
China Japan Korea
growth-China growth-Japan growth-Korea
ASEAN’s trade composition with China, Japan and Korea
100%
27.1%
34.2% 33.9% 34.2% 37.8%
80% 41.9%
51.8% 48.4% 47.8% 47.3%
54.7% 53.2%
60%
Share to Total Flow
19.7% 24.2%
39.7%
15.7% 36.4% 28.0%
40% 24.0% 21.3% 23.5%
19.8% 17.6% 17.6%
16.3%
24.0% 33.8%
15.4% 20.5%
20% 16.7%
24.3% 24.0% 26.6% 27.5% 29.7% 27.4%
24.8%
18.4% 15.9%
12.5% 11.9% 13.5%
0% 3.0% 2.5% 0.7% 1.2% 0.7% 1.3%
Export Import Export Import Export Import Export Import Export Import Export Import
2010 2018 2010 2018 2010 2018
-20%
China Japan Korea, Rep.
Others Raw Materials Intermediate Goods Consumer Goods Capital Goods
GVCs are not exempt from global challenges
GVC
Participation
Ways forward
The need for ASEAN to:
• Reinforce trade and investment linkages in region and beyond (reduce trade transaction
costs, investment facilitation and promotion, roll out trade and transport facilitation
initiatives, improve connectivity).
• Continue support towards open, inclusive, and rules-based multilateral and regional
trading system.
• Deepen services integration, going beyond market opening towards closer regulatory
cooperation.
• Further future-proof the region’s economy by developing hard and soft infrastructures,
including regulatory reform and digital infrastructure, building human capital
development, embracing new business models that take into account sustainability
dimensions.
Thank you
“ONE VISION, ONE IDENTITY, ONE COMMUNITY”
www.asean.org
