Global Value Chains: New Evidence for North Africa

This paper analyzes the participation and the position of North African countries into global value chains (GVCs). Exploiting the recently released multiregional Input-Output tables from UNCTAD-Eora, we describe regional and country GVC involvement. North African countries have not been able so far to fully integrate into international production networks. However, large part of their (low) trade is due to value added related activities, mainly in the upstream phases, and the importance of foreign linkages has been increasing over time signalling the existence of unexploited opportunities. We complement the Input-Output analysis with evidence from bilateral trade flows and case studies from specific sectors. This anecdotal evidence is in line with previous findings. Overall, our results suggest that enhancing GVC participation of North African countries is likely to substantially benefit local industries, countries and the whole area. However, the ability to retain such benefits relies on specific characteristics, such as the level of human capital, the trade logistics and the presence of trade barriers, thus leaving room for policy intervention.