As noted above, while domestic policies remain relevant, they might not be at the appropriate level to best harness the challenges of competitiveness within GVCs. For example, the harmonization of standards, competition principles or rules of origin might be better done at the regional level. GVCs increase the cost of non-harmonization and the value of multilateral and plurilateral agreements (OECD-WTO, 2013b).

A new set of policies is also needed with regard to so-called “Aid for Trade” (AFT) to make a better use of official development aid (ODA) for trade integration. Among others, a greater emphasis should be put on reducing the “thickness of borders” and facilitating the operation of business.

Drawing the lessons from the paradigm shift from public to private impetus, trade and development policies should be increasingly designed and implemented in consultation and – where possible – in association with the private sector that does trade and is in a better position to assess both the constraints to trade and the impact of trade and development technical assistance and capacity building. It is about moving from supply-side to demand-driven trade strategies.

With regard to the pivotal role of GVCs in contemporary trade flows, three major intermediate objectives should be added to the trade competitiveness and development strategies: joining, maintaining participation, and moving up value chains. In addition, given the benefits and risks associated with participation in GVCs, accompanying policies should help maximize/minimize the said benefits/risks, ensuring that the chain of results from competitiveness to growth and development is preserved (e.g., by avoiding national content or overly restrictive investment laws).

This task is made difficult by the heterogeneity of sectors: the organization of GVCs tends to be sector-specific (and sometimes even firm-specific), and there are no one-size-fits-all policies (Sturgeon and Memedovic, 2012).

# **PART 2 – MEASURING A COUNTRY’S PERFORMANCE WITH REGARD TO GVCs**

# **_The participation of countries in GVCs_**

_The input-output structure of GVCs and trade in value-added_ GVCs have an input-output structure, which describes the process that brings a product or service from initial conception to consumption and beyond. Therefore, input-output tables are the basic statistical element for the measurement of a country’s participation in GVCs.

To date, and using different methodologies, several initiatives have sought to compile inter-country input-output tables. The pioneering work in this field has been carried out by the Institute of Developing Economies (IDE-JETRO), which covered linkages between 10 Asian countries and 76 industries in intermittent years between 1975 and 2005. Similar initiatives followed. A selection of the main recent initiatives is listed below. These datasets differ in country coverage, data source (official statistics vs. other sources) and methodology:

- The World Input-Output Database (WIOD) is compiled by a consortium of 11 institutions and funded by the EU.  Based on supply-use tables from official national statistics, it identifies the input-output linkages between 40 countries (plus the “rest of the world”) and 35 industries, providing time-series over the period 1995-2009. This dataset was released in April 2013.

- The OECD Inter-Country Input-Output tables represent a similar effort. Building on the OECD harmonized input-output tables, the objective is to mainstream the activity and extend the country coverage. The tables include 57 economies accounting for 95% of world output (plus the “rest of the world”), with a breakdown into 37 industries. Five years are covered so far (1995, 2000, 2005, 2008 and 2009) but time-series will be produced. The OECD ICIO

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