Global Value Chains and the Changing Pattern of North-South Trade: Apparel, Electronics and Automotive Sectors in 2005-2014

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Over the last several decades, it became apparent that manufacturing production shifted increasingly to developing countries through foreign direct investment (FDI) and offshore outsourcing. It gave rise to a fragmented and decentralized production system, called global value chains (GVCs), and increased the export of manufacturing goods from the Global South to the North, reshaping the division of labor in the world economy. However, since the global economic crisis of 2007-08 and the aftermath, a new trend called ‘shifting end markets’ has emerged, or the rise of the South as end markets in GVCs. Yet, in many emerging economies, economic growth began to slow down over the past few years. This paper examines the changing patterns of North-South trade in three GVCs – apparel, electronics and automotive – in 2005-2014, the period interspersed by the economic crisis and the recession. Using bilateral trade data from UN Comtrade, the patterns of North-South trade and the composition of major exporters to the South are analyzed for both intermediate and finished goods in each sector. The paper discusses findings from the analyzes in terms of sectoral and temporal differences as well as a varying degree of developed and developing countries in South-bound trade.