Integration & Trade Journal: Volume 15 : No. 32 : January-June, 2011

This journal contains a collection of articles on integration and trade in Latin American and the Caribbean. The topics addressed are as follows: international fragmentation of production and its effects on the labor market, regional production sharing networks in Latin America and East Asia, global value chains in regards to the export and service sectors. Also included are panel interviews with industry experts on global value chains and several book and article reviews. While geographic separation of activities involved in producing a good or a service across two or more countries is not new, in recent decades the world economy has witnessed an unprecedented intensification of this phenomenon. The resulting international organization of production has substantially increased interdependencies among economies around the globe and has translated into a fast growing trade in intermediate inputs and services (Yeat, 2001; Hummels, Ishii & Yi, 2001; UNCTAD, 2004). Unsurprisingly, such a development has attracted the attention of researchers, businessmen, and policymakers alike, who have not spared names to describe it, including international production fragmentation, offshoring, global value chains, international production networks, slicing the value added chain (Krugman, 1995), disintegration of production (Feenstra, 1998), delocalization (Leamer, 1996) or the great unbundling (Baldwin, 2006). From the point of view of developing countries, increased international production fragmentation provides opportunities to engage in international trade transactions that were virtually not available before. In particular, this fragmentation process allows those countries to become part of an ever finer international division of labor, whereby they enter into cross-border production sharing networks by participating in just one (or a few) facet(s) of the activities involved in producing a final good. In contrast, in absence of such vertical specialization, emerging economies would have to master entire production processes in order to become viable competitors in world markets.