Increased production fragmentation and the resulting rise in intermediates trade have changed the composition and structure of international trade flows. Today, most of global trade is conducted along global value chains (GVCs). However, recent events, such as the financial crisis, the COVID-19 pandemic, and the Russian invasion of Ukraine have exposed the fragility of GVCs. In addition to this, the proliferation of trade agreements with different rules of the game between different groups of countries has made this a more complex problem to solve through the multilateral system. This chapter discusses the role of preferential trade agreements (PTAs) to foster GVC resilience. Building on a novel data set that covers about 700 PTAs and their GVC-related provisions, we first discuss the major trends of GVC-related provisions in PTAs and their impact on the development of value chain complexity. Second, we derive a set of possible instruments which, if included in future PTAs, could make GVCs more resilient and reduce the impact of shocks on trade flows.

This case study examines the dispute between Micron Technology, United Microelectronics Corporation (UMC), and Fujian Jinhua Integrated Circuit Co. Ltd. over the alleged theft of Micron’s trade secrets in integrated circuits (ICs), specifically dynamic random-access memory chips. This dispute offers a lens through which to analyze China’s strategic efforts to strengthen its semiconductor industry by overseas investment. It begins by introducing China’s ambitious policy framework aimed at achieving self-reliance in the semiconductor industry, set against the backdrop of geopolitical tensions and the COVID-19 pandemic’s impact on global IC supply chains. It then turns to the case adjudicated by Taiwanese courts in 2020, where UMC and Jinhua faced allegations of trade secret misappropriation from Micron. Finally, this study compares the different legal and regulatory approaches of Taiwan and the United States in addressing such disputes, highlighting the challenges in regulating global supply chains amidst evolving geopolitical and economic landscapes.

Chapter Seven analyzes the progress of the transition from the production of vehicles with internal combustion engines to the production of electric vehicles in eastern Europe. The transition is considered in the context of the development of the automotive industry in eastern Europe since the early 1990s and the relative position of the east European integrated periphery in the European automotive industry value chains and production networks. The chapter argues that foreign firms are driving the transition, while the role of the east European governments and local firms is much less significant. The transition is slower than in western Europe, and eastern Europe will continue to produce internal combustion engine vehicles for longer. Eastern Europe will continue to rely on its competitive advantage of low production costs, especially low labor costs, to continue to attract foreign direct investment in the automotive industry. The chapter considers the consequences of the transition on the position of east European countries in automotive value chains, production networks and the division of labor in the European automotive industry.

Chapter Six investigates how distinct tiers of firms contribute to value creation and value capture in the automotive industry. It investigates the relationships between the firm’s position in automotive industry global value chains and global production networks and its prospects for value creation and capture in the context of the Czech automotive industry. It employs firm-level indicators to evaluate the value creation and capture of distinct supplier tiers in the Czech automotive industry, while considering differences between foreign-owned and domestic firms. The analysis suggests that the economic effects of the automotive industry largely depend on its capital intensity and that mostly foreign-owned higher-tier firms generate and capture greater value than lower-tier firms, which include the vast majority of domestic suppliers.

Chapter Eight summarizes basic points and arguments of the book and discusses its conceptual and methodological contribution to the global production networks and global value chains perspectives, and to the understanding of the changing geography of the contemporary European automotive industry. The topics include the long-term effects of foreign direct investment for economic development in less developed countries and in peripheral regions; the spatial concept of integrated peripheries and its application in the explanation of automotive industry’s gradual expansion from core to peripheral regions; the regional development effects of automotive foreign direct investment in integrated peripheries; the internationalization and restructuring of the European automotive industry; the core-periphery structure of the European automotive industry; value creation and value capture in the automotive industry; and the transition to the production of electric vehicles in eastern Europe.

Chapter Five investigates the core-semiperiphery-periphery structure of the European automotive industry between 2003 and 2017 by drawing on the global value chains and global production networks perspectives and on the conceptual explanation of the spatial division of labor in transnational production networks in the automotive industry. It develops a methodology to empirically determine the relative position of countries in the core, semiperiphery or periphery and changes in their position over time. The methodology is based on calculating the automotive industry power of individual countries, which is the combination of trade-based positional power, ownership and control power, and innovation power in the automotive industry. On the one hand, the empirical analysis revealed a dominant position of Germany as a higher-order core, which is joined only by France and Italy in the stable core of the European automotive industry. On the other hand, the periphery is mostly located in eastern Europe despite the rapid growth of the automotive industry since the 1990s. The majority of countries kept a stable relative position in the core-semiperiphery-periphery structure of the European automotive industry transnational production system during the 2003-2017 period.

Chapter 6 examines the Probo Koala environmental catastrophe which involved the dumping of toxic oil residue by the global trader Trafigura in the port of Abidjan in 2005. The development of the scandal into transnational litigation strategies in Britain and European capitals exposes the legal lumpiness fostered by the financialisation of global value chains. The ‘Ivorian miracle’ relied on protected economic integration within the global markets of coffee and cocoa. The dismantling of the ‘post-colonial block’ fostered a displacement of the terms of Côte d’Ivoire’s relationship with global markets. This contributed to reinforcing the prominence of global traders as intermediaries between states, financial markets and corporate power. It also consolidated the symbiotic relationship between the onshoring of offshore capitalism and the offshoring of onshore justice. The case demonstrates that corporate accountability gaps along global value chains are an outcome of the bifurcation of state sovereignty enabled by financial deregulation.

The Introduction revisits the judicial saga between the vulture fund FG Hemisphere and the Democratic Republic of Congo, the world’s cobalt reserve, before Britain’s Privy Council to illustrate the blurry divisions between state/non-state entities, offshore/onshore capitalism. Tracking the patterns of symbolic valuation that justify the relationship between the African South and the global economy requires breaking away from the functionalist understanding of law and global value chains. The Introduction sets out the book’s research strategy, which is further explained in Chapter 1. Embracing the global turn in sociology, this involves tracking interconnected dynamics of legal intermediation across Britain, France and the US, in former British, French and Belgian colonies, in tax havens and secrecy jurisdictions, as well as in the institutionalisation of the international legal order. Approaching these interconnected dynamics as imperial encounters provides us with a history of the present relationship between law, politics and global finance.

The rising importance of international firms is demonstrated by two main aspects. First, firms are heterogeneous; they differ substantially in the margins of trade and in economic size. The extensive margin indicates if a firm is active in trade flows. The intensive margin indicates the intensity with which firms engage in trading activities. Trading firms tend to be bigger and more productive than non-trading firms. Second, trade flows are dominated by multinational firms operating in two or more countries, including related party trade between firm entities leading to intra-industry trade. Multinationals are concentrated in advanced countries, capital- and R&D intensive, display distance decay in their interactions, are larger and more productive than national firms and have a specific organisational structure. The rise of international firms is related to the changing structure and organisation of trade flows caused by the emergence of global value chains, under the guidance of lead firms.

The objective of this chapter is to present two approaches useful in the study of the formation and dynamics of particular systems in the bioeconomy. Innovation systems have a horizontal perspective to production processes, while value-chains analysis adopts a vertical perspective. The innovation system approach conceptualises the circulation of knowledge within systems and the way in which the institutional environment favours the development of innovation. The value chain approach is interested in the co-creation of value, its circulation in the international division of labour, and the relations between regions in the world.

Chapter 2 sets out the book’s theoretical approach. The first half argues that state-led development requires the formation of states with the capacity and autonomy required for effective intervention. However, it is only where state-led development aligns with elite threat perceptions that leaders make politically difficult choices to promote structural transformation. For many authoritarian regimes, it is when ruling elites face mass distributive pressures alongside resource constraints that they pursue development to expand the resources available to secure mass acquiescence. The second half of the chapter examines the specific challenges facing ‘late-late’ developing authoritarian regimes. First, the changing global economy, which is fragmented into global value chains with manufacturing driven by foreign investment, rather than domestic capitalists. Second, the delayed demographic transition that gives rise to large-scale population growth and urbanisation, enhancing mass distributive pressures. As such, regimes face severe distributive pressures at the same time as the state’s ability to address these is constrained by the global economy.

Chapter 5 puts the reconfiguration of Pacific Asia into global perspective in four respects. First, in contrast to the divergences that characterized the modern era, in this century there has been a multi-dimensional convergence between developed and developing countries. 2008 marked the first time since the nineteenth century that the production of the developing world was greater than that of the developed world. Second, the unipolar world order of the post-Cold War has shifted to a multinodal world order. Without a defining global power, the multinodal order has a “certainty vacuum” rather than a power vacuum, and it is best filled by partnerships rather than by alliances. Third, Pacific Asia has become a global powerhouse. In 2020 its GDP equaled that of the US and the EU combined, and it is integrated by global value chains. Fourth, China reaches beyond its region. Despite the headwinds of Covid-19, trade bottlenecks, and global tensions, China and Pacific Asia have arrived. If a bipolar configuration develops, it is likely to differ from the Cold War camps by being closer to a developed/developing country split, with less unity of leadership on either side.