The Impact of Regional Integrations on Global Value Chains Participation

Nowadays research of the phenomenon of formation of global value chains (GVC) is of major interest for leading international organisations (UNCTAD, WTO, OECD. World Bank, IMF), which try not only to explain the nature of GVC, but to determine the cause of global fragmentation of production structures, and define a new system of quantitative evaluation of participation in GVC. Various experts consider GVC as an essential element of new theoretical paradigms of international trade theories, which radically changed the fundamental process of formation of value added and influenced all aspects of societies. Another global trend in the world economy that worth to be notices is the evolving regionalisation of trade relations. Due to this fact, along with analysis of theoretical aspects of formation of GVC, this paper attempts to explain the mechanism of integration in trade relations between countries assists involvement of the Parties of regional agreements into participation in GVC, considering the comparison of two regional agreements: The Association of Southeast Asian Nations (ASEAN) and Southern African Development Community (SADC). Furthermore, the paper identifies internal and external factors, which affect involvement of the countries of interest in the GVC the most. Findings of the paper confirm significant positive effect of a country’s participation in regional agreements (despite the levels of economic development of the latter) on formation of the GVC in this country. This allows to consider GVC as a new trade policy instrument, which could assist developing and least developed countries to establish international relations within the framework of global economy and find their niche in interregional trade.