Policy recommendations to help ameliorate inequalities in global value chains

Kent Law School Professor Donatella Alessandrini and Dr Jeremmy Okonjo have produced policy recommendations for the regulation of international trade to help ameliorate inequalities in global value chains (GVCs).

The recommendations come at the end of a one-year research project offering the first sustained legal analysis of the contribution made by the World Trade Organisation (WTO) to the proliferation of GVCs and the unequal distribution of the economic value along the chains.

Research for the project was funded by a British Academy Mid-Career Fellowship and conducted by Professor Alessandrini in collaboration with Kent Law Lecturer Dr Jeremmy Okonjo.

Drawing on socio-legal studies, world system theories and feminist economics, the project has analysed the Global Value Chain Development (GVCD) reports co-published by the WTO and the World Bank. It has focused on one central claim these reports have made about the development-related benefits of firms’ participation in GVCs and on the policy recommendations that follow.

Dr Alessandrini said: ‘The claim is that by inserting themselves into GVCs and technologically upgrading, firms can move up the value-added ladder and capture a greater share of the economic rewards, thereby also benefitting workers and their states in terms of employment, income and taxation. The policy recommendation following from these reports is that in order for insertion and upgrade to take place, states – especially developing countries – need to undertake deeper trade commitments to speed up the integration of their firms in GVCs.’

However, the research found that:

  1. the links between GVCs and development (understood as increased employment and income for firms, workers and states) are tenuous at best, with numerous case studies revealing the presence of informal workers, many of whom are women and migrants, and ‘social downgrade’ (the deterioration of working and living conditions), even when firms have technologically upgraded and moved up the value-added ladder
  2. the adoption of deeper trade commitments is likely to exacerbate socio-economic inequalities and wealth concentration by providing lead-firms with stronger legal entitlements and no corresponding legally enforceable obligations.

The policy brief, entitled ‘Global value chains, trade and inequalities’, identifies three key questions to embed into the architecture of international trade regulation. These questions address service liberalisation, investments liberalisation, and intellectual property rights protection under the TRIPS (Trade-Related Aspects of Intellectual Property Rights) Agreement. Policy recommendations include the addition of equality impact assessments, revision clauses and compensatory/adjustment mechanisms into bilateral, regional and multilateral trade agreements.

Professor Alessandrini is Director of Research and Outreach at Kent Law School. She is also Co-Director of Social Critiques of Law Centre (SoCriL). Together with Kent colleague Dr Luis Eslava, she is a member of The IEL Collective. Her book, Value Making in International Economic Law and Regulation (Routledge, 2016) was shortlisted for the Hart-Socio-Legal Book Prize in 2017.

Professor Alessandrini teaches postgraduate students in the field of WTO law and practice, and international investment law. She teaches undergraduate students in public law.

Dr Okonjo has research interests at the intersections of economics, law and technology. His current research examines the impact of emerging technologies such as Artificial Intelligence (AI), algorithms and Blockchain on national and international financial law and regulation, international trade Law, and constitutional law and governance.

Dr Okonjo teaches undergraduate law students in the fields of EU Law, Equity and Trusts, and Obligations. He teaches postgraduate students in WTO law and international investment law.