Global/Regional Value Chains Integration of Developing Countries Through Innovation WTO Public Forum 1-3 Oct 2013 CUTS/OIF By Ambassador Shree B.C. Servansing ACP-EU TBT Progamme Brussels

Introduction GVCs: Not a new phenomenon but a new analytical perspective to understand globalisation & shifts in the pattern of world trade SVEs: open and export-oriented economies Major Challenge: how can SVEs be empowered to seize opportunities presented by the increased globalization of production and fragmentation of tasks?

Three Key Elements Strategies for integrating/upgrading in GVC’s Shaping factors and entry barriers in GVC’s location The Importance of Innovation & Policy implications for MTS, particularly A4T

Strategies for integrating/upgrading in GVCs Functional upgrading: improvement in the position of firms would result from increasing the range of functions performed or a change in the mix of activities performed towards higher value tasks Process upgrading: efficiency gains by reorganizing the production system or introducing new technologies Product upgrading: moving into more sophisticated product lines Inter-chain upgrading: using the capabilities acquired in one chain to be capitalized in another more technologically advanced chain.

Shaping factors/ entry barriers (I) Many factors determine and shape entry: Ennabling maroeconomic environment, Good governance, Supply side constraints, Infrastucture, Investment, etc All countries doing these things. What makes the difference? Improving Competitiveness. Foster Innovation as a horizontal concept in Quality improvement and management Permeates policy-making, processes in production/supply chains, products and services – OECD recommendations to its members applicable to SVEs also Innovation policies Policies to upgrade the human resource base of the economy Policies to foster entrepreneurship and new areas of economic activity Cluster policies and efforts at the local/regional level Policies to enhance attractiveness Governance Intellectual property rights (IPR)-related policies

Shaping factors/ entry barriers (II) Capacity-building and financial support Aid For Trade, an ideal vehicle

Shaping factors/ entry barriers (III) Promoting regional integration Enhancing regional value chains

From Raw Sugar to Sugar Care Cluster Industries SUGAR-CANE RAW SUGAR REFINING DISTILLING Bagasse by product Special Sugars White Suger Quality Rum Ethanol Co-generation Knowledge-base Services exports Inputs BASIC UPGRADING Crucial Elements: - Industry Alliance: Lead Firm Sud Sucker - Aid-for-Trade: EDF support for Sugar Sector Reform - Technology Transfer: Brazil Raw Material VALUE-ADDED