LAPSE:2023.32863
Published Article
LAPSE:2023.32863
Impacts of Reverse Global Value Chain (GVC) Factors on Global Trade and Energy Market
Byeongho Lim, Jeongho Yoo, Kyoungseo Hong, Inkyo Cheong
April 20, 2023
Since the outbreak of COVID-19 and the American decoupling policy, the global value chains (GVCs) have been switched to regional GVCs, and, in the worst case, are subject to a potential alteration of reversing the GVCs, ultimately entailing a severe impact on international trade and the global energy market. This paper applies a quantitative approach using a computational general equilibrium (CGE) model to estimate the effects of the reverse GVC factors on the global economy, trade, and energy market. These reverse GVC factors will decrease the global GDP, and such effect will bring a greater influence on both China as well as the United States, which is pursuing decoupling. The increased trade costs due to these factors will reduce the GVC indices, mostly in ASEAN by 0.2~1.15%, followed by Korea, Japan and China. Surprisingly, the GVC index in the United States is expected to be strengthened due to the enhanced GVC with its allies such as Canada and Mexico. In China, the use of oil, gas and petroleum is expected to decrease by around 10%, and similar effects are expected in Korea and the EU. Among the world’s major energy producers, it is estimated that the US will reduce energy exports by 16−62% depending on the energy source, and the Middle East and Russia will significantly reduce their gas exports. The global energy market is shrinking, but in particular, the international gas market is expected to decrease by 27.3~38.6%.
Keywords
COVID-19, decoupling, global energy market, global value chain (GVC), reverse GVC factors
Suggested Citation
Lim B, Yoo J, Hong K, Cheong I. Impacts of Reverse Global Value Chain (GVC) Factors on Global Trade and Energy Market. (2023). LAPSE:2023.32863
Author Affiliations
Lim B: Korea Maritime Institute, Pusan 4911, Korea [ORCID]
Yoo J: Division of International Commerce, Pukyong National University, Pusan 48434, Korea
Hong K: Program in International Relations, New York University, New York, NY 10012, USA
Cheong I: Department of International Trade, Inha University, Incheon 22212, Korea
Journal Name
Energies
Volume
14
Issue
12
First Page
3417
Year
2021
Publication Date
2021-06-09
Published Version
ISSN
1996-1073
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PII: en14123417, Publication Type: Journal Article
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doi:10.3390/en14123417
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