GVC

The value chain describes the full range of activities that firms and workers do to
bring a product/good or service from its conception to its end use and beyond.
This includes activities such as design, production, marketing, distribution and
support to the final consumer.
A value chain can be contained within a single geographic location or even a
single firm (think about a fruit that is grown, packaged, sold and consumed
within one country). A global value chain is divided among multiple firms and
geographic spaces. For example, a computer uses labor and materials from
multiple suppliers in different countries, is assembled in another country, and
was designed and will ultimately be sold in other places. The GVC Initiative is
particularly interested in understanding value chains that are divided among
multiple firms and spread across several locations, hence the term "global value
chain."
GVCs make a significant contribution to international development. Value-added
trade contributes about 30% to the GDP of developing countries, significantly
more than it does in developed countries (18%) furthermore the level of
participation in GVCs is associated with stronger levels of GDP per capita growth.
GVCs thus have a direct impact on the economy, employment and income and
create opportunities for development. They can also be an important mechanism
for developing countries to enhance productive capacity, by increasing the rate
of adoption of technology and through workforce skill development, thus building
the foundations for long-term industrial upgrading.
However, there are limitations to the GVC approach. Their contribution to the
growth may be limited if the work done in-country is relatively low value adding
(i.e. contributes only a small part of the total value added for the product or
service). In addition there is no automatic process that guarantees diffusion of
technology, skill-building and upgrading. Developing countries thus face the risk
of operating in permanently low value-added activities. Finally, there are
potential negative impacts on the environment and social conditions, including:
poor workplace conditions, occupational safety and health, and job security. The
relative ease with which the Value Chain Governors can relocate their production
(often to lower cost countries) also create additional risks.

What is 'Brexit'
Brexit is an abbreviation for "British exit," which refers to the June 23, 2016,
referendum whereby British citizens voted to exit the European Union. The
referendum roiled global markets, including currencies, causing the British pound
to fall to its lowest level in decades. Prime Minister David Cameron, who
supported the United Kingdom remaining in the European Union, resigned on July
13 as a result. Home Secretary Theresa May, leader of the Conservative Party,
became Prime Minister.

Brexit Fallout

Fulfilling various negative predictions, the leave vote severely impacted markets
worldwide. The British pound crashed by more than 11% against the dollar its
biggest-ever one-day fall and Londons FTSE and Stoxx Europe 600 fell by 8%
on the news. Both Barclays and Lloyds Banking Group saw their shares plummet
more than 30 percent before rebounding slightly. Germanys Deutsche Bank was
down about 14%, the Bank of Ireland and two of Italys largest banks were all
down by more than 20%. Shares in Greeces big banks were down around 30%.

In the U.S., stock markets were down 3% across the board, with investors rushing
to safe-haven assets such as bonds, gold and the Japanese yen. Morgan Stanley
and Citigroup were down nearly 10%, with Bank of America, JPMorgan Chase and
Goldman Sachs all trading down by between 5% and 7%. Oil prices also trended
downwards by 5.2%. In a CNBC interview, former Federal Reserve Chairman Alan
Greenspan said the fallout was worse than 1987, calling it the "worst period I
recall since I've been in public service. The global economy is in real serious
trouble. This has a corrosive effect that will not go away," he added

What does Brexit mean for India? As a former British colony, the country
enjoys particularly close economic, trade, political and cultural ties to the United
Kingdom.
Although significant coverage has predictably focused on the fallout from the
referendum, the UKs decision to leave the European Union presents a potential
upside for India in numerous ways.
First, the massive selloff of the British pound that followed Brexit resulted in a
roughly 8% decline of the currency relative to the Indian rupee. Financial experts
predict the plunge to continue before the pound stabilizes, making it
considerably less expensive for Indians to travel and study in the UK. The falling
currency also presents cheaper real estate options for Indian citizens and
companies seeking property in the UKs notoriously expensive property market.
Second, Brexit will likely compel London to seek a more robust trade relationship
with New Delhi. Britain and India have been so far unable to reach a free trade
agreement, with negotiations having become mired in the convoluted financial
politics of the 28-nation EU bloc.
Now unencumbered by the rest of the EU, the UK will aim to boost trade ties with
India and other similarly situated countries. With Indias economy outperforming
all of its counterparts, the erstwhile crown jewel of the British Empire appears to
be shimmering brightly once again from Londons view.
Third, and closely related, the financial and political uncertainty enveloping the
EU makes the Indian stock market a more attractive destination for foreign
investment. While Indian markets experienced a dip in the immediate aftermath
of the referendum, they have generally recovered, particularly relatively to other
global exchanges.
Fourth, some analysts predict Brexit could lead to changes in UK immigration
policies that would favor high-skilled workers from India. Divorced from the rest
of the Europe, the UK could potentially face a dearth of high-skilled EU workers if
the movement of professionals from the continent is curbed. India could benefit

from the possible shortfall. This would be ironic given the xenophobia, nativism
and isolationist sentiment that presaged and perhaps even motivated the exit.

Trump and general trade

Donald Trump did the opposite, railing against trade with Mexico and China and
promising to stop the decline of the manufacturing sector.

TPP
The Trans-Pacific Partnership (TPP) or Trans Pacific Partnership Agreement (TPPA)
is a trade agreement among twelve of the Pacific Rim countriesnotably not
including China. The finalized proposal was signed on 4 February 2016 in
Auckland, New Zealand, concluding seven years of negotiations. It is currently
awaiting ratification to enter into force. The 30 chapters of the agreement aim to
"promote economic growth; support the creation and retention of jobs; enhance
innovation, productivity and competitiveness; raise living standards; reduce
poverty in the signatories' countries; and promote transparency, good
governance, and enhanced labor and environmental protections."[5] The TPP
contains measures to lower both non-tariff and tariff barriers to trade,[6] and
establish an investor-state dispute settlement (ISDS) mechanism.[5][7]

TRUMP AND TPP

President-elect says he will leave TPP, with Japanese prime minister Shinzo Abe
warning trade deal would be meaningless without US

Why does Donald Trump dislike the TPP?

During the US presidential election campaign, Mr Trump gave broadbrush
arguments against the pact, and used plenty of colourful language.
In June 2016 he described it as "another disaster done and pushed by special
interests who want to rape our country, just a continuing rape of our country". In
another speech he referred to the TPP as "the greatest danger yet".
But while there was plenty of talk about "taking back control" of the US economy,
there were few specifics.
Announcing the plan to pull out of the TPP, he said that the US would "negotiate
fair, bilateral trade deals that bring jobs and industry back onto American
shores".

The deadlock in Doha round negotiations

The WTO launched the Doha round negotiations in 2001. These negotiations
aimed to minimize tariffs on agricultural and industrial goods, to remove
agricultural and farm subsidies and to relax non-tariff barriers.1 At the WTO
meeting in 2003, however, the developed and developing countries failed to

reach a collective position on provisions regarding trade liberalization which

needed to be included in the future multi-trading system.2 More specifically,
developed and developing countries have had dissenting positions on subsidies
for food and agricultural sectors, Singapore issues, non-agricultural market
access and trade facilitation provisions.3
All member countries have attempted to break through the deadlocked situation
in each of the WTO annual meetings since 2003. Additionally, from 2008 to the
present, the global economic crisis has determined some countries (e.g the US
and Russia) to apply trade protectionism4 in order to save their industries and
minimize potential social unrest (as in the Eurozone: Greece and Spain).
The incremental number of regional, inter-regional and bilateral free trade
agreements (FTAs) Consequently, countries and regional entities have employed
bilateral/regional and cross-regional approaches to create a commercial and
investment relationship between them. Then, number of free trade arrangements
and economic partnership agreements between regional organizations and
countries increases.