A large share of international trade is organized in global value chains, and the allocation across countries is an important factor for their income, growth, and jobs. Firms organise production across borders, taking advantage of production cost differentials. While many firms, states and other societal actors benefit from this international division of labour, the gains are spread unevenly. Specialised production stages, such as design and marketing, typically command high value added whereas profit margi
Social conditions in global supply chains are highly uneven, particularly in South-North chains. Especially in firms competing on the basis of cheap labour and in countries characterised by weak institutions, low pay and miserable working conditions are commonplace. Child labour is still widespread. Problems prevail in particular in agriculture, mining and light industries. Many workers still lack freedom of association and the right to collective bargaining, smallholder farmers suffer from weak bargaining
The way global supply chains are organised affects nature and climate in many ways. Integration in global supply chains helps to disseminate environmental standards globally and can allocate production towards locations where environmental conditions are best and ecological footprints are low. Yet, globalised production may also accelerate the diffusion of unsustainable patterns of production and consumption, increasing greenhouse gas emissions and resource depletion. Some firms may apply less rigorous stan