World Economy

Reducing Trade Barriers

Reducing  Trade BarriersReducing  Trade Barriers

East Asian economies need to redouble efforts to cut barriers to trade in intermediates and services crucial to continued expansion of cross-border global value chains, according to a World Bank report, Yahoo reported. The bank said the ability of countries to participate in GVCs rests critically on their capacity to efficiently import world-class inputs, technology and know-how. “Within a GVC, imports are critical inputs into exports. Therefore, export success hinges on removing barriers to imports of intermediate goods, broadly defined. Taking a long-term, cross-country perspective, growth in domestic value added in exports is robustly associated with growth in intermediate trade,” WB said in the East Asia Pacific Economic Update. Based on the preliminary results from its ongoing research, the bank confirmed that growth in value added within GVCs is strongly correlated with trade and investment policy, infrastructure and connectivity, the business climate and governance. It noted that boosting infrastructure, deepening trade integration and improving the investment climate are thus also imperative.