Request local content

Demanding local content impacts the global economy
The term “localization barriers to trade” applies to a range of measures that benefit domestic industry and disadvantage foreign competitors. Although many housing barriers have existed for a number of years, they are being applied with increasing frequency. This includes country-specific “Make in XX” or “Buy XX” programs recently introduced by many national governments.
Of these measures, the fastest growing are local content requirements (LCRs), which are government-imposed policies that require companies to use domestically produced goods or services. services provided domestically to function in the economy. There has been a significant increase in the use of these measures in recent years as governments strive to achieve a variety of policy goals that target employment, industry and public development. turmeric. Despite the age-old and mostly negative evidence about the impact of LCRs on economic development and trade, they continue to play an important role in politics today. Since the financial crisis a decade ago, more than 340 localization measures, including more than 145 new localization requirements, have been introduced by governments, mainly with the aim of improving national employment and industrial performance. OECD analysis has shown that for some measures, 80% of trade disruption is in intermediate goods, disproportionately affecting global value chains.
While LCRs can help governments achieve some short-term goals, they undermine competitiveness in the long-term. The work carried out by the OECD provides evidence of the adverse effects that LCRs can have on the economy of the country itself. While most research has focused on the long-term inefficiencies caused by LCRs in the relevant sector, a study from the OECD also highlights the subsequent costs to the rest of the sector. economy. Inefficiencies arise in other areas as LCRs actually reduce job growth and opportunities for economies of scale, undermining the original goals of LCR adoption.
By analyzing a measurable subset of trade-related LCR measures using the OECD METRO trade model, our study shows that LCR leads to global imports and exports. lower not only among trading partners but also in the great economy. Countries imposing the requirements lose their international competitiveness, as demonstrated by a reduction in exports in sectors not covered by the direct LCR. Furthermore, as industries benefiting from LCR consume more national resources, other industries are forced to reduce production or increase imports, leading to a concentration of national economic activity. This process ultimately undermines the growth and innovation opportunities that come from a vibrant and diverse economy.
The OECD has also conducted a number of industry studies looking at the benefits and costs, as well as the effect of LCR policy design, on the renewable energy, automotive, and oil and gas sectors, for example a number of branch. These studies have generally concluded that while LCR policies may achieve some short-term goals, they will undermine industrial competitiveness and overall employment in the long run.

Đánh giá post

Trả lời

Email của bạn sẽ không được hiển thị công khai. Các trường bắt buộc được đánh dấu *