Globalization and independence

Global value chains represent a competitive microeconomy of companies that operate in countries where inputs are the most suitable for production processes. The companies are linked to each other by the origin of the property and the design to be part of a more complex whole.

These chains are affected by floods, transportation delays, fires, and other calamities created by Covid-19, climate change, and economic crises. For this reason, companies are currently planning their productive relocation to have timely production and inventories to face eventualities of nature, the pandemic and society.

Associated with climate change, companies receive pressure from governments for global recommendations to decarbonize production and transportation in global value chains. This is a challenge of enormous significance. It is about accelerating the transition to zero carbon dioxide emissions. Many companies are already in the process of achieving carbon neutrality by 2050.

It is not for less. Global value chains represent 50% of total world exports. The participation of developing countries has increased, especially since the financial crisis of 2008. For this reason, the governments of the countries consider – rightly – that companies in global value chains have to be protected by their internationalization and its contribution to national economies.

The T-MEC has the support of the governments and was promoted by them. Paul Krugman, Nobel laureate in economics, says: “American companies have benefited from cheaper components and labor, which in turn has benefited consumers.”

At the recent meeting of the heads of state of the United States, Canada and Mexico, it was agreed to strengthen global value chains. It is clear that their behavior runs in parallel with government incentives to reactivate economies. If this is not simultaneous in all countries, bottlenecks are constituted in the production processes. This year, the shortage in Mexico of semiconductors has meant affecting 20% ​​foreign direct investment in the auto parts sector and curbing the country’s exports.

Developing countries have to integrate into global production systems, investing by the private sector and solving the problems of poor infrastructure, an eminently governmental task.

Globalization and the interdependence that is clearly manifested in global value chains constitute microeconomic modernity. But you have to be clear. The Italian writer Alberto Moravia says: “Modernity is a snake that we have eaten but have not yet managed to digest.”

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Economist

Economy and Society

Writer and graduate in economics, graduated from the National Autonomous University of Mexico. From 1984 to 1990 he was the Mexican ambassador to the Kingdom of Denmark, where he was awarded the Dannebrog order.