The transformation of global value chains in the post-covid era and regional comprehensive economic partnership (RCEP) agreement

Abstract

From the beginning 1980s, the ICT technology improvements and liberalization in the trade lead to an outsourcing of the production process. Countries trade value- added instead of final goods. In this setting, as the value is being created globally, this form of production and trade is usually named as global value chains. By outsourcing some parts of production, companies decrease their costs through economies of scale but make the production sensitive to the shock in one of the links. This risk is realized through the COVID- 19 pandemic. This accelerates the regionalization of the global chains. In this study, we analyze the regionalization of the global value chains concerning the Regional Comprehensive Economic Partnership (RCEP). We found that RCEP would accelerate of the regionalization the value chains in East Asia.