The raise of global value chains, closely knitting together firms from many different countries, changed the nature of trade and the relevance of established models and corresponding statistical indicators. What was initially an innovation in business management became so successful that it changed not only trade economics but initiated a process that is having profound repercussions on our understanding of development and social policies. This mutation – some speak of a paradigm shift – blurs country borders, but also the traditional distinction between industrialised and developing economies. The issue prompted the G20 to identify in its 2012 Puerto-Vallarta meeting global value chains as one of the main dimension of modern global governance. The article is part of a dedicated volume (13) by World Economics and focuses on the trade and governance aspects, first revising the forces that led to the flattening of the world, then analysing the implications for trade statistics and policymaking.