The objective of this report is to examine the extent to which countries in Latin America and
the Caribbean participate in global value chains and what are the drivers of such
participation. Production processes have been increasingly fragmented worldwide. For example
the production of the Boeing 787 Dreamliner involves 43 suppliers located in 135 locations
around the globe. There are many examples like the Dreamliner from the 451 parts that go into
the iPod to the less technologically intensive but still widespread multi-country production of
a Barbie doll. All this reflects significant changes in the way world production is being
reorganized across national borders. That is for many goods production has become a
multi-country process in which different stages are carried out in specialized plants in
different parts of the world. Countries which specialize in different stages of the production
process are thus linked by these global value chains. For developing countries a clear
opportunity from the continuous international fragmentation of production arises in the form of
participating in activities that were virtually not opened to them in the past. Therefore the
international fragmentation of production provides opportunities for trade diversification an
issue that can be of particular importance for Latin America and the Caribbean as the region's
export base is in general highly concentrated in a few industries and particularly biased
towards natural-resource intensive sectors. The aim is to identify whether there is policy
space for implementing strategies that allow countries to improve their position in regional
and global value chains.
