Costa Rica in GVCs · COSTA RICA: EXPORTS AND EPZ Source: COMEX, using data from BCCR. Source:...
Transcript of Costa Rica in GVCs · COSTA RICA: EXPORTS AND EPZ Source: COMEX, using data from BCCR. Source:...
Costa Rica in GVCs
Anabel GonzálezMinister of Foreign Trade, Costa Rica
Latin America’s prospects for upgrading in global value chainsColegio de México
March 14, 2012
The Latin American Context
•Agriculture and natural resources dominate most LAcountries’ export basket (minimum transformation, low unitary values, little differentiation)
Driven by surging Asian demand
•Some participation in low-value GVC (eg. apparel)
Impacted by China et al and by greater trade exposure to
industrialized markets
•Limited participation –by few countries- in GVC with higher technological content
The case of Costa Rica
52%
22%
39%
28%
19%
35%
40%
24%
48%
30%
7%
88%
85%
89%
24%
74%
24%
14%
71%
22%
60%
52%
2%
51%
4%
9%
4%
16%
2%
6%
1%
59%
2%
97%
32%
33%
6%
39%
12%
29%
63%
9%
72%
43%
66%
77%
10%
9%
11%
16%
24%
3%
45%
Argentina
Bolivia
Brazil
Chile
Colombia
Costa …
Ecuador
El …
Guatem…
Honduras
Mexico
Nicaragua
Panama
Paraguay
Peru
Uruguay
Venezu…
Total …
Latin America: Export Basket by Country (2009)
Agriculture
Natural Resources
Manufacturing
0%
10%
20%
30%
40%
50%
Share of High-Tech Exports in Manufactured Exports
2010
1997
Costa Rica: Exports and FDI
Source: COMEX, using data from PROCOMER. Source: COMEX, using data from BCCR* Preliminary data.
Source: COMEX, using data from PROCOMER and BCCR.
1.899
10.361
0
2.000
4.000
6.000
8.000
10.000
12.000
1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011*
Costa Rica: Exports 1991-2011
178,4
2.145
0
500
1.000
1.500
2.000
2.500
1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011*
Mill
on
US$
Costa Rica: FDI Inflows (1991-2011)
0
2.000
4.000
6.000
8.000
10.000
0
500
1.000
1.500
2.000
2.500
1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011*
FDI
Costa Rica: Relationship between FDI Inflows and Merchandise Exports, US$ million (1991-2011)
Exp
ort
s
AgroindustryFirst contact centers
Blue-Chip companies
Consolidation of CR as one of the main FDI locations in Latin America
1st leading medical devices company
Costa Rica: evolution of FDI
19
60
19
82
19
86
19
90
19
95
20
00
20
04
20
11
Pioneer of the industrial
sector
Textiles & apparel
Costa Rica: towards increased sophistication of production processes
Low cost labor
Access to highly Skilled labor pool
Sub-assembly
•Parts and
components
assembly
•Sub-assembly of
components
Assembly
•Textile maquila
•Devices class I
•Product
assembly
Manufacturing and
Assembly
• Extrusion
•Injection
•Thermoforming
•Precision
engineering
•Product
assembly
•Packaging
Design and
Engineering
•Re-design of products
•Devices class II and III
•Product validation
•Re-design of
processes
•Automatization
Research & Development
•New products design
•Design of new
processes (BTCa/)
•Prototype testing
•Pre-clinical and clinical
studies
Source: CINDE, 2011. Notes: a/Business Transformation Center.
Increasing sophistication
Costa Rica: participation in GVC
Electronics55%
Medical devices36%
Automotive7%
Film & Broadcasting
1%
Aeronautic/Aerospace
1%
Costa Rica: GVC-related exportsby industry
2011
Source: COMEX, using data from PROCOMER.Source: COMEX, using data from PROCOMER.
57%67% 64%
43%33% 36%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2009 2010 2011
Costa Rica: Participation of GVC-related exports in total exports
2009-2011
Other GVC-related exports
COSTA RICA: EXPORTS AND EPZ
Source: COMEX, using data from BCCR.
Source: COMEX, using data from BCCR and PROCOMER.
Sou
rce:
Mo
nge
-Ari
ño
(2
01
1).
41%
42%
12%5%
Costa Rica: Structure of Exports (2010)
Raw Materials & Intermediate Goods
Final Consumption Goods
Capital Goods
Other
Source: COMEX, using data from BCCR.
36%
22%
59%
39%
71%
00,10,20,30,40,50,60,70,80,9
1
Costa Rica: Domestic Component of GVC Exports (DCE), by chain (2009)
51%
20%
16%
13%
Costa Rica: Structure of Imports (2010)
Raw Materials & Intermediate Goods
Final Consumption Goods
Capital Goods
Other
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
Costa Rica: Share of EPZ Exports (1991-2010)
Other Exports
EPZ Exports
Costa Rica’s: participation in GVC: Key drivers
• Attraction of FDI• Interagency execution
Strategic visionProactive and coordinated
approach
• Political and economic stability• Export processing zone regime
Sound business environment
• WTO + PTAs with 54 countries• Robust air transportation network
Solid export platform
• Quality of educational system -1st in LatAm (WEF)• Cost competitive
Educated work force
• Middle of the Americas• Proximity to US market
Privileged geographical location
Diversify
Participate in more GVC
Increase tasks performed
Expand number of firms
Strengthen
Increase local content
Promote backward
linkages to local suppliers
Upgrade
The role of innovation, science and technology
Increased focus on high-skilled
tasks
Costa Rica: What next in GVC?
OPPORTUNITIES AND CHALLENGES AHEAD
•How to increase participation in GVC in the absence of a regional production system?
•What growth potential for US-centered GVC?
•What role for Costa Rica in GVC centered in Asia?
•What role for Costa Rica in GVC producing for emerging markets?
chal
len
ges
• Increased linksbetween Asia and Latin America
• Expansion of GVC
• Off-shoring services
• Growth dynamics of emerging markets
op
po
rtu
nit
ies
Domestic agenda in support of GVC
•Securing preferential access to international markets and deepening trade liberalization
•Reducing the cost and time to trade at the border and securing trade flows
•Enhancing and expanding the human resource base
•Moving towards an innovation-driven economy
•Upgrading infrastructure
•Securing the energy supply
•Better understanding CR's participation in GVC
What role for trade policy in enhancing Costa Rica’s participation in GVC?
Trade liberalization• The role of PTAs
• An enhanced ITA?
• Removal of non-tariff barriers
• Increased competition in trade-related services
• Exploring new ideas
• Eg. an International Digital Economy Agreement?
Trade facilitation• Simplification and harmonization of trade regulations and procedures
Protection of IPRs
A multilateral investment framework?