Trade fragmentation has become a mainstream phenomenon following a long period of globalization and the proliferation of global value chains (GVCs). Nonetheless, ASEAN+3 economies remain important participants in global trade and the extent to which they can accrue gains by continuing to expand exports and integrate into GVCs is crucial for domestic production and growth. That said, gains from international trade tend to vary across economies and are associated with GVC length and the position of each economy in those GVCs. This note shows that an economy needs to retain more GVC stages to support the development of domestic firms and increase domestic value-added, and that it should move toward more upstream positions in GVCs to capture a larger share of value-added.
Analytical Notes