For a decade Duke's Center for Globalization, Governance and Competitiveness (CGGC), under the leadership of Professor Gary Gereffi, has directed research on global trade patterns that has been valuable to scholars and policymakers alike. The center is now changing its name to reflect its focus on global value chains, which traces the production, marketing and sale of items across national boundaries, one of the hallmark of a globalized economy.
Below, Gereffi discusses the name change and the center's accomplishments.
Q: You are changing the name of the center from the Center for Globalization, Governance and Competitiveness to the Duke University Global Value Chains Center. Why?
We decided to change the name of the center to reflect our accomplishments and further put our stamp on the importance of global value chain analysis to address development issues. The center was initially founded in 2006 as Duke CGGC in part to continue the legacy of the Rockefeller Foundation-funded Global Value Chain Initiative (2000-2005). This initiative brought together about two dozen interdisciplinary academic and policy-oriented researchers to create a framework that would analyze the impact of global industries on developing countries and workers around the world. Over the past decade, the center has pioneered the use of global value chain (GVC) analysis in 85 research reports dealing with a wide range of international development issues in more than 50 industries and 30 countries. This GVC framework, a relatively unknown paradigm back in the early 2000s, has been widely adopted by most international organizations in the United Nations system, leading bilateral donors (such as the U.S. Agency for International Development) and regional development banks in Latin America, Africa and Asia.
I am one of the originators of GVC-style analysis (since the early 1990s) and over the years we have developed an incredible research team that has great knowledge and experience in using GVC analysis to address real-world issues for governments, foundations and international organizations. We are the primary university-based research center to utilize and extend the GVC framework to link economic, social and environmental issues. Given this, we decided to change the name of the center to reflect these accomplishments and further put our stamp on the importance of Global Value Chain analysis to address development issues.
Q: How will your focus change, if at all?
There will not be a significant change in focus. Most GVC Center work will continue to leverage the GVC framework. However, the GVC Center will seek to more clearly differentiate its contributions in terms of original research, advisory services for policymakers and foundations, and capacity building and training for both researchers, development practitioners and organizations.
Q: You have written about the harm Trump protectionist measures such as terminating NAFTA would have on certain U.S. business sectors. What do you recommend to address job creation and other issues fueling protectionists’ concerns?
The emergence of global supply chains highlights the cross-border nature of production and trade in the world today. An increasing amount of global trade actually occurs within the major global regions – North America, Europe and East Asia – especially since the 2008-09 economic crisis that led to a dramatic slowdown in global trade and production. In this context, the politics of economic nationalism are especially harmful. President Trump’s initial impulse has been to threaten our closest trading partners – Mexico and Canada – with “blowing up NAFTA” (the North American Free Trade Agreement, launched in 1994) in order to bring back U.S. jobs and lower our record global trade deficit.
The problem with simple protectionist measures, like imposing U.S. border taxes on imports from Mexico and Canada, is that U.S. imports from those countries actually contain high levels of U.S. content. U.S. imports from Mexico, for example, have about 40 percent U.S. content, and our imports from Canada have about 25 percent U.S. content. Meanwhile, the U.S. content in imports from China, which accounts by far for the largest U.S. bilateral trade deficit, is just 4 percent. In order to compete more effectively with China, the U.S. should be strengthening its economic ties with our North American neighbors, not threatening to curtail them.
Q: How would these changes – both protectionist and what you suggest -- affect North Carolina’s economy?
North Carolina is in many ways a microcosm of the U.S. economy. The center saw this first-hand through our North Carolina in the Global Economy project in which we analyzed information about how industrial restructuring is impacting North Carolina's key industries. (See http://www.ncglobaleconomy.com).
Our state has been a leader in traditional manufacturing industries (such as textiles and furniture) and resource-based industries (such as tobacco and hog farming), some of which are in decline. We also have dynamic world-class high tech sectors, like information technology, biotechnology and finance. North Carolina needs to “move up the value chain” to higher-value niches in its traditional industries (for instance, it is now a leader in “smart textiles” that use technically advanced fibers to supply the medical, aerospace and defense industries with specialized materials), and it needs to attract world-class companies that are global innovators in its high-tech sectors. Long-term competitiveness will depend heavily on continuing to improve the skills in North Carolina’s workforce, but also on infrastructure investments that can employ people across the state at all skill levels.
Q: What impact is the uncertainty over U.S. tax policy, trade policies and health care having on U.S. businesses?
The uncertainty and delays in U.S. policy reform efforts are hurting not only U.S. businesses, which are likely to hedge their bets on new investments that could fuel domestic economic growth, but they will curtail many foreign investors from coming into the country as well.
Q: Finally, how can the center help governments and businesses navigate all the instability around the world?
The Duke GVC Center carries out international benchmarking of leading firms and countries involved in the various industries that we study. We create detailed value-chain maps that allow us to see not only who is competing with whom in similar product markets around the world, but also to determine what are the main upgrading trajectories that exist in each industry. These trajectories allow us to assess the main challenges and opportunities that exist as countries and firms try to improve their positions in global value chains, or to avoid backsliding in the face of intense competitive pressures. Technological change, such as automation, is actually a far bigger threat to existing U.S. jobs than trade policies per se.