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Impact of Global Value Chains on jobs in the EU
Dilyana Slavova, REX Section President, Group III
Trade has never been more important for the EU`s economy. Trade is essential for jobs and is often
presumed to be an important factor for economic growth. This is also one of the reasons that trade is
among the elements of the sustainable development goals.
Today global value chains develop rapidly. Products are no longer made in one place. They are put
together in a long series of steps, often in different parts of the world. This new organization
transforms trade relations. The development of global value chains is believed to have increased the
number of jobs depending on trade because of the increased number of trade of intermediate goods
and services and in particular the increased proportion of services in the international trade.
Global chains are important for the EU economy and here are some facts supporting this
assumption:
•
The EU generates GDP of about 16.2 trillion euro (according to IMF). GDP per capita is
34 300 USD.
•
Share of exports in the EU economy: 1.800 trillion euro (goods) and 547 billion euro
(services).
•
Share of exports in GDP is approximately 15%.
•
Over 14% of labour force is generated through exports.
I can take some examples from my own country Bulgaria to illustrate the impact of global value
chains on jobs.
1. Approximately 24 000 jobs are generated through the establishment of Call centres which
provide services to the customers of global companies. That is important feature for Bulgaria
because it secures return flow of students who got their education abroad. Bulgaria is highly
competitive in this sector because of high level of language and computer literacy.
2. 6000 jobs have been generated through investments for production of parts for the automotive
industry. A Japanese company has tripled its production in the country in three plants. The
parts produced are cables for automotive industry which requires high level of manual labour.
3. 2000 jobs have been created by German copper manufacturer in its major production unit in
Bulgaria. This investment also supports 6000 jobs in the mining industry.
However, different countries are believed to be affected differently by trade liberalization. Increased
trade liberalization might also mean the need for adjustments. Adjustment policies should take care of
those, who lose their jobs because of trade liberalization. The impact on wages and working conditions
should also be carefully analyzed. The existence of good adjustment policies is increasing importance
to adapt to changes induced by trade liberalization. In general, job losses due to trade liberalization are
felt more immediately whereas job creation is a more progressive process. The obsolescence of some
industries and activities is felt more immediately after the trade liberalization, while job creation
associated with the new opportunities opened by trade agreement is more progressive. This is probably
why trade is perceived sometimes in public opinion as a "job killer". In the EU perspective, a
functioning and reactive European Globalisation Adjustment Fund, accompanied by adjustment
policies at Member State level is crucial to adapt to the challenges of globalization and to make future
trade liberalization more acceptable by public opinion.
Job losses are very often on the top of the news, especially in case of big companies closing down,
whereas job creations in particular by small and medium companies are often unnoticed.
The EESC, as an advisory body of the EU is in favour of an informed civil society debate on trade
policy. In several opinions, the EESC has called that trade liberalization should go together with
the creation of sustainable jobs both in the EU and in the partner countries. Therefore, we take
very seriously different mandates, through which we manage and participate in the monitoring of trade
and sustainable development chapters of the EU trade agreements. We firmly believe that the positive
impact of trade on sustainable development should be one of the aims of the future EU trade policy.